From Alaska to New York minimum wages are going up. In Seattle and San Francisco, the increase will incrementally rise to $15 an hour by 2018. By the start of summer Oakland's and San Francisco's will be up to $12.25. Many businesses, including restaurants, are struggling to find ways to manage the increase.
Of course, it's not just wages that are going up. With California producing a majority of the fruits and vegetables consumed throughout the United States, the ongoing drought will certainly see an increase in food costs.
This raises the question — where do you find the funds? Do you increase menu prices or trim elsewhere? Most restaurants will refrain from raising prices as much as possible. One place to look is via your technology costs.
You may first think that technology will cost you more, but, in fact, it will often save you money in the long run. Being able to embrace technology can often speed up tasks, attract business, increase sales, and even drive down labor costs.
Imagine saving $30,000 a year
Restaurants will go comparison shopping when it comes to ingredients and goods. Which place has the cheaper price on bar stools or the type of wine glasses you want? The same practice should be done for your technology solutions, keeping in mind quality of the product for the price. It never hurts to reevaluate your technology solutions.
A great place to start is with your reservation/FOH management system. Some restaurants are paying hundreds or even thousands of dollars. Many restaurants are constantly full regardless of whether they have a reservation system or not. Perhaps they have a famous chef or owner. Or it could be the restaurant has received an award such as a Michelin Star or James Beard Award or been named in a major publication such as Travel & Leisure or Saveur. These restaurants have plenty of traffic and are thus racking up high cover fees.
Another consideration is how much is each guest costing you. Why pay for a regular over and over again when they would come to your restaurant regardless of whether you had a reservation system or not? There's also the cost associated with one-time guests. Is it worth the $2-$5 for a tourist who may never return again versus your repeat guests and regulars?
A restaurant can easily save from 50 to 90 percent by simply changing reservation systems. Some major restaurants can go from $3,000 per month down to a manageable $325 per month. Imagine saving $30,000 a year just from removing cover fees.
Efficiency can reduce labor costs while increasing service
Picture going from a pen and paper waitlist system to a state-of-the-art reservation system and then seeing your sales dramatically increase in just one week. As an added bonus, being able to trim labor costs at the same time. This happened when the Sacramento Farrell's Ice Cream Parlour switched to the Rezku system and let the system handle the table assignments.
Farrell's was able to trust the system to calculate turn times, customer seatings, and table sizes to more efficiently seat their guests. Efficient seating equals more sales.
At the same time, Farrell's went from phone-in reservations to online reservations and saw a dramatic decrease in phone volume, thus freeing up staff to handle more important tasks.
The ability to take reservations can be helpful to even the smallest restaurants who might not have been able to afford a system before. Many guests like having the ability to reserve tables and by doing so via a webpage or Facebook page, the restaurants are then able to capture guest information for future promotions.
The Rezku system offers a state-of-the-art reservation and front of house management system at a 4-tier pricing structure — from FREE to only $325 for the top level. The simple ability to be able to automate reservations for free can help increase traffic. The first three tiers of Rezku are currently available on the iTunes store.
For more information on Rezku Prime, call us at 844-697-3958 and request a demo.
Presented by Guest Innovations. Be sure to check out our affordable hospitality products Rezku, Waitku, Sendku, and Dinnerwire.