The SBA is Distributing Another $83 Million
In Restaurant Revitalization Fund money. Just before the Thanksgiving holiday, the U.S. Small Business Administration announced that the government agency would be distributing $83 million in unobligated Restaurant Revitalization Fund money to 169 restaurant operators with pending RRF applications. “The SBA’s action represents the final chapter of our nearly three-year effort to secure dedicated federal pandemic relief dollars for local restaurants,” National Restaurant Association executive vice president of public affairs, Sean Kennedy, said in a statement. “Today’s announcement is great news for those 169 operators fortunate enough to receive an RRF grant, but hundreds of thousands more are struggling with uncertainty.” Over the summer, NRN reported on an independent audit by the U.S. Government Accountability Office that found the SBA was sitting on $180 million of unobligated Restaurant Revitalization Fund money. At the time, the SBA said that they planned to distribute the funds with help from the Justice Department, though no further details were available. Earlier this month, the SBA provided an update that no further applications were needed, and funding would be distributed soon on a “first-applied, first-serve basis.” According to the National Restaurant Association, the previous estimate of $180 million in leftover funding was inaccurate, and the $83 million represents the last of the RRF funding that any restaurant will ever see.
Preparing for the Potential Increase in Restaurant Turnover
It might be time to create a structured resale plan. There’s been a noticeable uptick in restaurants going on the resale market. For those who either own a quick-service restaurant or who are thinking of getting into the industry, it may seem concerning. The increase in restaurant turnover isn’t a reason to worry, but it is worth taking notice and knowing how to respond to it. One of the biggest reasons for the increase in restaurants going on the market is the current period of inflation we and in along with the anticipated recession. While economic experts say we are not in a recession by its official definition, a recession is likely in the near future. Recent reports show the prices of goods have inflated 8.2 percent as of September 2022. When expenses go up, it affects customers’ buying habits and organizations’ budgets, including those of restaurants. Quick-serves have proven that they’re strong business concepts able to withstand difficult circumstances, as we’ve seen during the COVID-19 pandemic. But not even they are immune to increased expenses or people cutting back on their discretionary spending. The restaurants most susceptible to these difficulties are low-volume restaurants or restaurants with high fixed costs such as those with expensive leases.
Boost Efficiency and Employee Satisfaction
For great customer service. Restaurants have long depended on operational processes running like a well-oiled machine to keep service seamless for customers. The pressures have reached an apex as current labor challenges leave many restaurants with skeleton staffs. On a national scale, eating and drinking businesses remain about 750,000 jobs—or 6.1%—below their February 2020 pre-pandemic employment peak, and the quitting rate continues to outpace the hiring rate for restaurant employees, according to the U.S. Bureau of Labor Statistics. Especially as restaurant staffs are spread thin managing additional responsibilities and tending to multiple service channels (including on- and off-premise sales), it’s important that operators empower their employees to focus on the human element of customer service—which means to automating other tasks where possible. Operational delays can undercut customer satisfaction on multiple levels. Not only can diners be frustrated by slower service, but the stress of facing obstacles behind the scenes can impede employees’ ability to provide the most personable service possible. Inversely, improving efficiency not only helps restaurant workers provide faster service, but also focus more on customer-facing duties and create a great dining experience overall.
Improving Worker Performance At Your Restaurant
An efficient restaurant is a successful restaurant. And a restaurant cannot run efficiently if employees are not doing their jobs correctly. It is important for restaurant owners and managers to identify who is effectively doing their job and who is not. The best way to figure this out is to utilize techniques that evaluate performance and help you identify what your team is doing right and what they are doing wrong. Using performance management techniques will help you figure out which workers need to be put in leadership positions at your restaurant and which ones need to be retrained or let go. As a business consultant with over 30 years of experience I have worked with many restauranteurs to help them run a successful business. Here are a few techniques to help you manage performance at your restaurant. Strong performance by your staff will help your restaurant succeed. A team that performs will creates happy customers, which creates more money. Using these performance management techniques will keep your team performing at a high level provide you with a better understanding of what drives success at your restaurant.
10 Common Tech Mistakes for Restaurants
And how to avoid them. Restaurant technology has morphed from being “nice to have” to an absolute necessity. Tech solutions are essential to elevate restaurant operations, increase efficiency, reduce costs, improve scheduling, boost safety, and streamline daily tasks. As restaurant tech has become more affordable, accessible, and user-friendly, more restaurants are investing in digital solutions. As your restaurant implements (or upgrades) technology, be sure to avoid these common mistakes. You didn’t research your options. There are many amazing restaurant tech options available that can elevate all aspects of your business, so do your homework. Determine which features and functions are most important to you, then find a solution that meets these needs. Your business may be at a point where you only need certain functions, or you may need something more holistic if you want to grow and scale. In that case, the best option could be a comprehensive, integrated solution that can do it all—inventory, purchasing, reporting and analytics, scheduling, HR, and more. You didn’t plan ahead. Restaurant operators can be so eager to start a new initiative that they jump into new tech options without a plan, which can create numerous problems down the road. While it’s impossible to predict every possible scenario, it’s smart to develop plans to mitigate potential problems during rollout. Work collaboratively with your vendor to create a roadmap for the rollout and implementation to make the tech transition seamless.
Why Barbell Pricing is the Strategy Du Jour
On restaurant menus. As inflation continues to cast a shadow over the economy, restaurants are turning to an age-old marketing tactic to keep customers coming in the door. Barbell pricing—the practice of simultaneously promoting both high- and low-priced menu items—has made a comeback this year as operators look to appeal to two sets of customers: those who are hurting from inflation and those who aren’t. “It’s a way of being able to talk out of both sides of one’s mouth,” said John Gordon, restaurant analyst with Pacific Management Consulting Group. Mentions of “barbell” have spiked on earnings calls this year. Executives of at least eight publicly traded chains uttered the term during the most recent round of quarterly updates, according to data from financial services site Sentio. Between 2018 and the start of this year, “barbell” had surfaced just a handful of times, a sign that the strategy is gaining steam. It comes as restaurants try to strike a difficult balance between generating traffic and protecting margins. By offering traffic-driving deals alongside pricier items, restaurants hope to capture customers on both ends of the spending spectrum while also encouraging trade-up.
Rent Delinquency Rates for Small Restaurants Improve in November
A 7-point improvement over October. New data from Alignable shows that 42% of independent restaurant owners could not afford to pay the rent in November. While this number is high, it marks an improvement over the 49% delinquency rate in October. In September, 36% of restaurants couldn’t pay their rent, while in August and July, the number was 46% and 45%, respectively. Across sectors, 41% of U.S. small business owners reported that they could not pay their rent in full and on time in November, which is a new record for 2022. Typically, the fourth quarter yields the opposite trend for such businesses, but factors such as higher rents and declining monthly revenues continue to take a toll. Alignable reports that rent is up 1% in November, for instance, and Moody’s Analytics predicts rent prices to continue at a growth rate of 5% to 7% through Q2 2023. Further, 73% of small business owners said consumers spent less in November versus October as inflationary pressures linger.
Did You Know?
Why your restaurant should prioritize order accuracy. Here’s an important – but often overlooked – truth for the restaurant industry: To make your customers to feel valued and appreciated, you must get their orders right! All too often, restaurants are fumbling on that basic principle. Perhaps they’re understaffed and struggling to keep up with incoming orders. Or employees haven’t been properly (and regularly) trained. It might be a simple miscommunication, where the person taking the order misheard the customer’s special request. Maybe there was a breakdown in communication somewhere along the internal meal preparation process. Regardless of how it happened, your vegetarian customer got a regular hamburger instead of a veggie burger, and now they’re furious. Why is order accuracy so important for a restaurant? Incorrect orders can lead to:
Seven Tips for hiring ”Rock Star” seasonal staff. The holiday shopping season is right around the corner, and consumers will soon be heading out in droves to snatch up great bargains on must-have gifts. With the strong economy and unemployment at an eight-year low, forecasters are expecting a busy and lucrative holiday season. For restaurants, it’s a perfect opportunity to cash in on the crowds. With shoppers out and about, plus family and friends getting together to celebrate, the holiday season can mean a big boost to your bottom line.
Bielat Santore & Company – Restaurant Industry Alert
If you are looking to buy or sell a restaurant or other hospitality-type property, not any New Jersey Commercial Real Estate broker will do. Confidentiality is a precondition when considering such a sale. Therefore, the sale of a restaurant demands the engagement of professionals who are vastly experienced in the hospitality business and real estate marketplace. Such professionals can be found within the commercial real estate firm of Bielat Santore & Company, Allenhurst, New Jersey, serving the business and real estate interests of restauranteurs since 1978.
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