That’s a harsh title to read, but we want to make sure you’re asking yourself the tough but necessary questions.
Although the past few years have proven chaotic in the restaurant industry (and we’re still not in the clear) – it’s encouraging to hear that many franchise owners are making it a priority to allot both time and resources toward 2023 strategic planning. This is necessary when it comes to ensuring you are better prepared in the face of uncertain conditions.
Expending precious resources when the day-to-day is so volatile can seem futile; however, strategic planning may be even more important when we are faced with wide-scale complexity and uncertainty.
There are 3 key areas impacting the restaurant industry:
- Inflation
- Rising Labor Costs
- Debt Costs
And, as such, there are two key questions to consider with your strategic plans in 2023 that can help address those areas.
- What is your baseline budget for 2023?
- Do you have the right systems in place to manage your data and run budget scenarios?
In 2008-2009 the restaurant business was hit hard but was able to navigate the downturn. We just weathered the COVID storm. What can you do to make sure you’re prepped this time around?
“Do you know your upside and/or downside for your budget for 2023?”
Inflation continues to impact spending, and recent surveys indicate that consumers have a strong belief that prices will continue to rise. Supermarkets are bearing the brunt of rising costs, and the hit to consumer wallets may be driving consumers to prioritize eating out rather than at home. Media outlets, from industry trades to the Wall Street Journal, report that when compared to soaring grocery prices, many consumers consider restaurants a “bargain.”
As a result, most restaurants are currently experiencing stable and increasing traffic and sales. In addition, the gap between restaurants and supermarket pricing is allowing restaurants the opportunity to take price at a level “not seen in years.”The ability to take price is welcome news for the industry as a whole; but is this welcome news for you? The ability to take price is welcome news for the industry as a whole; but is this welcome news for you?
Does your budget allow you the room to make decisions related to price and labor in 2023?
Data drives these decisions so we must acknowledge the ongoing challenges and discuss the impact strong systems and processes have on the ability to maximize budgets for profitability.
“Do you have the right systems in place to manage data?”
To develop effective data-driven strategies, it is essential that organizations have strong systems in place. For instance, when it comes to predicting profitable food cost percentages, there are industry standards, but those will vary based on the type of restaurant you are operating. To implement a successful strategic plan that not only accounts for challenges and opportunities, but accurately forecasts, restaurants must be able to bridge the gap between accounting and operations with the right system.
[STOP] Not sure who you can trust your franchise accounting and finances to? See why you should choose GSS
GSS uses world class systems built for restaurants that can benchmark food, labor, and other costs based on industry norms, but also recognize specific variables to create baselines for customized reporting and up-to-date analyses. Having these systems and processes in place can lead to improvements in budgeting, efficiencies, and even the ability to quickly scale when it comes to growth.
Final Thoughts
When a company has quality systems and processes in place, leadership can more easily rely on accurate data to drive key decisions in the business.
Thinking strategically about how to solve problems is the core mission of GSS, and we can help streamline processes while offering up tools that help manage the day-to-day and contribute to informed long-term, strategic planning and goal setting.
If you aren’t clear on baselines or need assistance or guidance on budgets or strategic planning, please do not hesitate to reach out.