Have you ever wondered what truly drives restaurant profitability and success? Many assume it’s a straightforward process of serving great food and providing excellent service. However, the reality is far more complex. Today, we delve into this intricate world with insights from Chip Klose, a seasoned restaurant professional and host of the Restaurant Strategy Podcast.
Introduction
Join Jeremy Julian, the Chief Revenue Officer for CBS North Star and host of the Restaurant Technology Guys podcast, as he introduces us to Chip Klose, a renowned industry expert with over 25 years of experience. The conversation revolves around understanding and mastering restaurant profitability and growth.
The P3 Mastermind Program
Chip Klose brings unique insights into restaurant profitability through his P3 Mastermind Program. Chip has developed a refined focus on helping independent restaurant owners and operators not just survive but thrive. With a clear emphasis on profitability, Chip and his team assist restaurants in building systems that ensure sustainable growth.
Identifying the Ideal Audience
Chip’s program is specifically tailored for restaurant owners who have been in operation for at least a year, with revenue of at least a million dollars. He caters primarily to multi-unit owners with up to six locations, aiming to implement systems that could help them scale effectively.
Challenges in Restaurant Profitability
In his exploration of why restaurants may fail to turn a profit despite seemingly high revenue, Chip identifies three “moving targets”: revenue, cost of goods sold (COGS), and labor. Unlike large brands, individual restaurants encounter volatile variables affecting these targets, making profitability more challenging to achieve.
Understanding Revenue Growth
Chip offers insightful strategies for driving revenue growth, emphasizing a holistic approach. He proposes three ways to increase revenue: selling more of the product, raising prices, and introducing a variety of products. For instance, Chip reflects on how a Michelin-rated restaurant managed to grow revenue by diversifying product offerings like private dining and merchandising.
Marketing Strategies for Restaurants
Effective marketing is pivotal for restaurants, and Chip promotes a simplified yet impactful approach with his “Three Pillars” strategy: Attraction, Retention, and Evangelism. By focusing on acquiring new customers, encouraging repeat visits, and generating positive word-of-mouth, Chip helps restaurant owners build a robust marketing framework.
Engaging Customers from the Start
Critical to restaurant success is creating memorable customer experiences. Chip emphasizes the importance of personal touches, like welcoming guests and asking if it’s their first time visiting. Furthermore, data acquisition is key—gathering email addresses and phone numbers can transform customer interactions and help establish long-term relationships.
Managing Prime Costs
Restaurant profitability hinges on managing key costs effectively. Chip introduces the 30, 30, 20 rule—a guideline for allocating maximum percentages of revenue toward cost of goods, labor, and other expenses. Understanding these parameters helps restaurants maintain healthy profit margins while simultaneously enhancing their operations.
Optimizing Menu and Labor
Flexibility is essential in optimizing menu offerings and labor utilization. Restaurateurs must be willing to refine or remove underperforming menu items, ensuring all offerings contribute to the bottom line. Moreover, leveraging efficient labor strategies similar to what Chip experienced in Michelin-starred environments could lead to significant savings without compromising quality.
Final Thoughts
For those hesitant about diving into profitability analytics, Chip assures that with proper systems in place, forecasting and budgeting can be efficiently handled in as little as 30-60 minutes monthly. By adopting streamlined processes, restaurant owners can delegate tasks effectively, freeing them to focus more on food and service excellence.
Chip Klose and the Restaurant Strategy Podcast are invaluable resources for restaurateurs striving for sustainable success. Whether it’s through gaining operational insights, executing strategic marketing, or managing prime costs, Chip offers tools and frameworks that are both practical and transformative.
For those interested in delving deeper, Chip is offering a free and no-strings-attached P&L review, a perfect first step towards mastering restaurant profitability. Don’t miss out on this opportunity to gain clarity and propel your business forward. Make sure to check out the link provided for more details.
In an industry known for its challenges, Chip’s guidance brings hope and actionable strategies, making him an essential ally in the quest for restaurant success.
