8 Challenges Restaurants Face and How to Tackle Them

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8 Challenges Restaurants Face and How to Tackle Them

A chef is presenting food and learning how to over challenges by using proper accounting practices

The restaurant industry has never been the most stable; however, it can be one of the most lucrative businesses for those truly creative and able to weather the storm. That being said, the restaurant industry is not without its trials and tribulations that make even the most adept of business owners stressed out. There are many issues to address from ongoing labor shortages to customer issues. In this post, we uncover the eight challenges restaurant owners face and how you can overcome them with optimal accounting practices just for your industry

A chef is presenting food and learning how to over challenges by using proper accounting practices

Ongoing Labor Woes

In today’s world, it’s no surprise that restaurants face labor shortages. However, it’s not only limited to labor shortages; It’s also the quality of work and employee relations that restaurant owners must address. Having a team to help you run your business can vastly increase your success. There are a few different strategies you can implement to increase work applications for your restaurant or increase the productivity of existing employees. The first topic we will address is how to attract new employees. Nowadays it is centered around the company’s benefits and what the employee can offer the company. For example, many restaurants don’t pay their servers high salaries, so they rely on tips. It has become part of the industry so much that restaurants can receive tax benefits from reporting tips correctly. These strategies not only attract better employees, but they usually include higher pay, a better work environment, and even more protections for the employee in their customer relations.

Crushing Operating and Variable Costs 

The first step you’ll want to take to lower your operating and variable costs is understanding where these costs are coming from. Most restaurant costs usually come from a few main categories, including costs for labor, food, utilities, equipment, and operating systems. When going through your financial records, you’ll want to start by separating your food and labor costs from your overhead and occupancy expenses. When it comes to eliminating operating costs, the most effective strategy is finding better avenues to even out your budget. That might mean increasing menu prices to offset supply costs. For others, it could mean issues in the restaurant, such as time spent preparing food, needs to change so there can be a bigger compensation. When it comes to variable costs, there is no true way to pay for the unexpected without preparing for it, and it’s quite as simple as that. Creating effective planning strategies for your business to weather uncertain times is extremely beneficial in customer service industries. 

Changing Consumer Behaviors

Changing customer behavior is a unique problem in the business world because there are different variables to consider depending on the nature of your business. For example, most restaurants tend to influence customer behavior with social media presence and by engaging with their local community. For example, a new family-owned restaurant may establish its presence by engaging with the community through community outreach programs. In this way, they become a destination restaurant and are favored over a chain restaurant. For some, developing marketing strategies and PR campaigns are beneficial to their business. Others find success by working with a local digital marketing agency that is well-versed in optimizing a website for Search Engine Optimization (SEO) and can help their business name display at the top of search results. When thinking about these strategies, you also want to consider the costs of these strategies. Some strategies, like engaging with the community, might be less money, but they will take more time. On the other hand, businesses that prefer to save time and invest more money upfront tend to work with a Public Relations (PR) or SEO specialist. 

Time-Consuming Restaurant Marketing Tactics

For those who opt for digital marketing to help their business succeed, we can offer a few tips.  When you are looking for Public Relations or Search Engine Optimization Specialist, we recommend working with an agency that specializes in your industry. This typically means the agency you selected to work with has accumulated hands-on experience and can meet your expectations. Companies who have more experience working with restaurants will know how to highlight the individuality of your restaurant and get your business qualified leads. However, it is best to meet monthly and update the firm on any new goals or changes so they can ensure your goals are consistently met.

Meeting Diverse Training Needs

In the restaurant business, you’re going to have various professionals working at once. From cooks and servers to hosts, managers, owners, and distributors, it’s important that all employees can work well together. When it comes to training, you’ll want to hire employees with the ability to handle the expected workload and who have experience in the industry. Expectations and training vary from restaurant to restaurant, but there are a few general rules of thumb that can be helpful to any business when training. 

For example, many businesses find it helpful to have new employees trained by another employee who will manage their work once they begin. It’s also beneficial to designate coworkers your new hire can look up to for advice or ask questions. In short, training is an essential part of your business and it conveys your restaurant’s expectations. New employees will learn the company culture and policies as they train, which often creates a pleasant work environment. 

Ineffective Management

Dealing with ineffective management can bring down a business just as quickly as a recession. When dealing with ineffective management, you can the option to replace the manager who isn’t getting the job done. Alternatively, and perhaps more effectively, you can schedule a meeting with that manager and establish areas for improvement and set new goals. You may also consider computer management software to help your restaurant stay afloat even on the busiest days. And, if you ever have an issue with the computer software, you can rely on the company you purchased it from to help you. 

Unengaged Customers

Unengaged customers can come in a few shapes. First, there are those one-time customers and tourists who, while not necessarily unengaged, are the type of customers you do not expect to return. For example, many Miami-based restaurants, serve more tourists than locals. The other type of unengaged customer will be those that live in your restaurant’s community and don’t plan to return to your restaurant, or when they do, seem not to enjoy themselves. When dealing with unengaged customers, you will want to reflect on many of the previously mentioned strategies. Still, the ultimate question you will be answering here is, how do I make this customer happy? For some customers, it’s about building personal relationships and establishing yourself as a restaurant that is engaged in the local community. For other customers, it simply comes down to marketing strategies that highlight key services your business offers that customers cannot easily find elsewhere. Thinking of ways to increase customer relations is just one of the many skills that we here at Interactive Accountants work on developing daily to help our clients in the restaurant industry. 

The Next Step

At Interactive Accountants, assisting businesses in financial growth is our number one goal. We are here to help because the better you do, the better we all do! If you are in need of financial advice or want help organizing your business’s finances and bookkeeping, please schedule a free consultation with our owner Matthew Shiebler, CPA who has been practicing accounting for over 25 years. Alternatively, call us at (305) 517-3977 or fill out the form below.