In a flat market, people can lose focus on profit erosion.
We have all been taught that volume covers a multitude of sins. Today people learn that flat revenue can also disguise a multitude of sins. It becomes the excuse for everything.
Can you honestly say your business runs better today than it ever has?
Most of my clients can.
While the current market may not stimulate you or inspire you to be at your best, still the only way to carve out more than your fair share of revenue and profit from this flat market means taking no time to slack.
Lately I’ve Let Things Slide
Still, I sometimes get the distress call from a client who’s observing that things could be better.
This year a long-time client contacted me after we hadn’t worked together for a while. They had the queasy feeling that, even though the business was still very successful, something seemed off on guest experience – and therefore profit.
So I dug into the numbers – slicing and dicing them in every way possible – to show them what action to take.
The Steps We Took
- Re-emphasize true hospitality and unique steps of service that set the brand apart.
- Go back to basics on all the systems that controlled and calculated food cost – all the way to the point of reteaching people how to take inventory.
- Take an overdue modest price increase.
- Create fantastic new menu items that attract the attention of current and lapsed guests and non-users (and their social media accounts).
- Focus like a laser on purchasing to make sure they buy at the absolute best price available for the quality they cook with.
- Utilize the financial literacy of managers by providing them with all the information they need to make smart decisions about their restaurants.
I thought we would lose a lot of managers who could not keep up; instead, we raised them up.
The results? Impressive everywhere. Food cost? Down 3 points. Guest counts modestly higher, with profit increasing. We forecast that profit in 2026 will have more than doubled (yes, you read that right) compared to 2024!
The profit increase number? In the seven figures!
After years of holding steady on unit count, I have even heard people there cautiously whispering it may be time to expand again soon.
No Excuses
When I re-engaged with this company, the first thing I asked the multi-unit people was what they had done in the past that had made them successful – whether in their current job or previous jobs. Their lists looked comprehensive, full of things that were not happening here. Which puzzled me.
Some people need a push. Consider yourself pushed.
How will you use a flat market to be at your best to grow profit and sales, as opposed to it just making you cautious or bringing you down?
