Why Is Cost Control Important in a Restaurant?

Controlling costs means optimizing profit. In the restaurant industry, finding the balance between providing superior quality food and keeping costs in line can be challenging. The price of food can fluctuate significantly from month to month. Customer demand, changes in economic pressures, and seasonal factors all can make it difficult to control costs. But why is cost control necessary in a restaurant beyond profitability?

Cost control impacts profits, but it can also play a role in enhancing efficiency, stability, and adaptability. When you work with a restaurant management consulting team, you’ll learn the specific strategies available to help you optimize costs clearly. Here is why cost control matters.

Cost Control Directly Impacts Profits

Higher costs impact your business’s bottom line. The more you can control and maintain your expenses, the higher your profit margins increase. Your business cannot survive long-term without a healthy profit margin.

Cost Control Supports Long-Term Financial Stability

Meeting monthly financial obligations is always important. However, cost control also impacts your restaurant’s ability to:

• Make payments to vendors on time

• Keep employees paid 

• Meet supplier requirements

• Pay the rent on the building (and pay yourself!)

• Maintain positive cash flow to support emergency needs or unexpected costs

Each of these relationships and areas of need is critical to build over time. Without positive cash flow, you may end up borrowing. That means expensive interest rates could further impact profitability.

Effective Cost Control Ensures Efficiency

Sometimes, the best reason to invest time in cost control is to ensure you’re not wasting money. Even if cash flow is fantastic and profit margins are in line, operational efficiency remains a critical factor in building your business. Why spend more than needed? Consider:

• Improved product management reduces waste, which in turn protects the environment and results in fewer calls to pick up trash. 

• Ensuring proper cost control keeps inventory optimized. That streamlines operations, making sure you don’t run out of what you need or spend money to throw product out that spoils.

• Portion control keeps costs in line, but also keeps customers happy. If a customer comes in one day and receives twice the portion they expect, they should expect that every time. That can impact customer satisfaction even if the expected portion size is ample. 

Operational efficiency is also a factor in your restaurant’s reputation. Consumers increasingly want to work with companies that are cognizant of their role in minimizing waste and being effective in managing energy costs.

Cost Control Helps You Make Better Decisions

Information is one of the most powerful factors in building your business. Cost control insight enables you to make informed decisions about some of the most critical aspects of your business. 

With cost control data, you know how well your business is performing each month and year-over-year. This allows you to make decisions such as:

• Should you hire? Is your business actually growing faster than you realize? It could be if you optimize profits. 

• Which menu items are profit makers and which are costing you too much?

• How well do your prices represent the actual income and profit margin you need to make? If your costs creep up and you raise prices, the direct outcome is driving customers away. 

• Are you working with the most cost-effective suppliers and vendors? 

• Should you make decisions about upgrading equipment to reduce costs or provide a better level of service for the customer?

Throughout each day, you will make big and small decisions that impact profitability. That could be on what dishes you plan for next season or whether you hire another cook.

Cost Control Helps You Adapt

Think long-term. Market conditions change. Your customer base is also likely to change over the years. You may have seen new trends pop up that you want to take advantage of to bring customers in. If you have a good level of cost control in place, you can make those decisions with confidence.

Being able to adapt to changing conditions in the restaurant industry is a part of doing business. Consumer behaviors, demands, and preferences will change, even slightly. You need to know how those changes are impacting your bottom line before they hurt it.

How Restaurant Consulting Makes a Difference

Prix Fixe Accounting provides you with the tools to manage your costs efficiently. With our services, we ensure you can consistently grow your business. Contact us to learn how you can enhance cost control.

How Can a Competitor Analysis Help Me Improve My Restaurant Business?

Gathering information about your competitor is one of the best ways to gauge your company's performance. The two may not seem to relate, but with the information you gather through a comprehensive analysis, you can make better, more insightful decisions for your restaurant. The better you understand your competitors, the more powerful your marketing and outreach efforts can be.

What Is a Competitor Analysis?

Utilization of a competitor analysis opens the door for you to see:

• Who your competition really is (meaning, who your customers would go to if they did not go to you) 

• What your competition offers that you do not

• How well does your pricing stack up with their costs

• Key differentiators that make consumers seek out you (or them) more frequently 

To complete a comprehensive competitor analysis, you will need to examine a great deal of information and carefully consider it objectively. This may include menu items, marketing methods, customer base, and target customers, as well as pricing and branding. 

Because of its importance, working with restaurant consulting services that will handle a competitor analysis for you could be critical. That expertise ensures you are always able to gather accurate, actionable information.

How a Competitor Analysis Improves Your Business

Perhaps you know you are not going to change your business based on what is happening with your competitors. You may list numerous reasons why you are different. However, for the customer who is searching for a place to get a meal, none of those factors matter. If you cannot compete, then they will choose someone else.

Consider some of the direct results that a restaurant competitive analysis can offer to your business.

• Better tailor your marketing to key differentiators. When you complete a competitor analysis, you gain insight into what the competition does well and what you do better than them. This can help you enhance your messaging and branding.

• Stop wasting money on factors that are less beneficial. In some situations, you may learn that the competition is beating you in some areas. This allows you to make adjustments that could be more effective at boosting revenue. That could be, for example, changing up your marketing reach. 

• Find gaps in your competitor’s strategies that could benefit you. You may know that once their customers start coming to you, you can win them over. Look for areas of opportunity, whether that’s in your marketing messages or in offering a specific service that beats out the competition.

If your business is doing well, a competitor analysis keeps you on top by demonstrating where the competition sits in terms of providing a better product or service. If your business is struggling, a competitor analysis enables you to gain insight into areas of opportunity that may be beyond what you can see right now.

Conducting a Competitor Analysis: Best Practices to Put in Place Now

Utilizing a professional service to handle restaurant consulting services, such as competitor analysis, is often beneficial. It ensures that an objective party always handles the necessary steps while not involving emotions or personal experience. To be beneficial to you, a competitor analysis must be accurate. 

Consider these steps to help you ensure that it happens:

• Look at everything, not just the menu. You can start with the menu and pricing, but there is much more to consider. Look at how their customers interact, feel, and present themselves. Consider the atmosphere within the space. Look at how the employees behave. 

• Consider the differences carefully. Notice what your competitors are doing well. Make it a point to focus on these areas during your analysis. Then, look at what is different. Is their technology more advanced? Are they using different styles of dishes or engaging customers in a different way?

• Take a look at their online presence. Often, consumers today turn to social media to find the best place to eat near them. Consider how well your competitors are followed online, whether they have an updated website, and what services they offer. Catering, party rooms, special discounts listed online, and other services are all differentiating factors you need to think about for your own company.

Let Our Professionals Get to Work for You

Utilizing a competitor analysis, you gain valuable insight that can drive business decisions. Keep control over your business’s bottom line and drive success by working with the team at Prix Fixe Accounting. Let our consulting services answer your questions. Contact us now.

How Do You Plan a Restaurant Menu?

Designing your restaurant menu is more than providing customers with a list of food options. A carefully designed menu acts as a marketing tool: a way that you can increase sales and convey the right message about your brand. 

If you are launching a new restaurant or investing in upgrades for your existing restaurant, then it’s time to consider the design and layout of your menu. These tips will help to boost profitability and improve customer experience, helping to optimize the results that you can achieve with your restaurant. 

Follow these best practices when you are planning and designing a restaurant menu:

Know Your Target Audience and Restaurant Concept

You need to have a clear profile of your target demographic. Create a persona of the ideal customer that you want to see walking through the door. Are you serving casual diners, health-conscious customers, or fine-dining guests? How do your restaurant’s theme and offerings align with the customer’s needs and preferences?

When you are clear about the customers that you are serving, it becomes easier to dial in your restaurant theme, menu, and overall brand identity. Even the smallest details, such as dish offerings and menu designs, contribute to the experience your customers will have in your restaurant. These customer preferences, as well as local food trends, can help as you are shaping your menu options.

Offer Variety, But Keep It Simple

One of the most important principles of User Experience is that simplicity is always best. While it might seem fun and exciting to offer a lot of options for your customers, it can be overwhelming when a person is looking at a huge menu. Too many offerings on the menu not only make it hard for your customers to choose their meals, but it also complicates your kitchen operations. 

So, the goal is to provide a variety of options while also keeping the menu as simple as possible.

Profitability and Menu Categorizations

Additionally, there are ways to place the menu items strategically so that you can optimize revenue. Know which menu items are the most profitable and highly popular, then look for ways to highlight these items on the menu. 

Consider this menu engineering and design method to help with profitability:

• Stars: These are the menu items that you want to feature most prominently. They are the most popular dishes that have the highest profit margins.

• Plow Horses: You’ll have other offerings that are very popular but have lower profit margins. In this category, it might make sense to adjust the costs and price points if needed.

• Puzzles: Next, identify any menu items with high profit margins and low popularity. These items can be highlighted on the menu, and you might consider rebranding them to make the dishes more appealing.

• Dogs: The last category includes any dishes that have low profit margins and are low in popularity. These items are wasting space on your menu. You need to remove the dogs, or reinvent them so they are more effective with both profitability and popularity.

Pricing Strategies to Boost Your Profit Margins

You are in the restaurant industry to make a profit, but it can be challenging to ensure that the numbers are lining up to result in a positive ROI at the end of each month. Follow these tips to help with pricing and menu design so that you can optimize your profits as much as possible:

• Food Cost: When you are choosing the price point for each menu item, you need to account for more than just the ingredient costs. Also, think about labor requirements and overhead. In most situations, food costs should be around 28 – 35% of the menu price.

• Portion Control: Next, make sure that you are standardizing portion sizes. Not only does this help to maintain consistency in the dishes that your customers are receiving, but it’s also easier to manage your profit margins this way.

• Pricing Psychology: Small nuances in the way the prices are set can impact a person’s decision to purchase. For example, customer perception is often influenced by prices that end in .95 or .99. “Charm pricing” is a method of dropping the price just below a rounded number to make it seem more affordable. For example, pricing a dish at $19 instead of $20.

Other Details for a Successful Menu

There are a variety of other strategies that can improve the effectiveness of your restaurant menu. Not only do you need written descriptions that sell, but you also need to add appealing photos and make sure there is a logical menu flow. Your menu should highlight certain dishes and limit visual distractions as much as possible. 

For more information about menu planning and full-service restaurant consulting services, our team at Prix Fixe Accounting is here to help. Contact us to learn more about available services.

Restaurant Positioning: How to Stand Out in a Crowded Market

What makes one restaurant stand out from another? For many, it is that one unique characteristic or incredible experience that brings them back to the same location time and time again. Restaurant positioning is the process of creating that memorable feeling. Specifically, it's a strategy that can help your restaurant better compete by standing out.

What Is a Positioning Statement for a Restaurant?

How you position your restaurant leads your marketing efforts, builds your reputation, and solidifies your customers' experiences. A positioning statement can help clarify this for your location. With the help of restaurant consulting services, you can create an authentic, on-target positioning statement that clearly defines your business objectives.

A positioning statement is a short and to-the-point declaration that outlines how the business wants to be perceived. It applies specific target market aspects to it, allowing your business to position itself as the ideal choice for those within that target market. All industries benefit from having a well-defined positioning statement, but for restaurants and a smaller marketing budget, it's a core component of your strategy. 

How to Create Restaurant Positioning Statements

You may know what you want people to think about your restaurant, but how can you communicate that message? There are four key components to focus on to build your own positioning statement:

• Clarify and detail your story. Focus on the why and how. 

• Communicate your philosophy. What makes you different could be your beliefs in the work you do or how you work.

• Consider your target customer. What do they desire and even expect from the locations they visit?

• Consider your competitors and how to stand out from them

Restaurant positioning enables you to make a statement, but you'll need to create something that's authentic. Consumers know what marketing is, and they want to patronize organizations they can get behind and feel good about visiting on a regular basis.

• Does your company want to be known for providing community-supported initiatives? 

• Do you source all of your food locally? 

• Do you want your customers to see you as a high-end, sophisticated location?

• Are you showcasing the unique skills of a chef?

• Are you focused on supporting the LGBTQ community in your area?

Components of Successful Restaurant Positioning

Once you have a positioning statement, consider what you can do to communicate that with others. With the brand positioning in mind, focus on how it impacts these key areas:

• Brand identity: A consulting service can help you build your brand, which is a core component of your restaurant positioning. A brand is more than a logo. It is a feeling, experience, and statement.

• Customer service: Modify your customer service programs and solutions to ensure you are delivering on that promise and statement.

• Menu design: Even your menus should communicate your messaging and exclude the positioning you want your company to have

• Staff: There is no more outward component to your brand positioning than your staff, who are the face of your company

• Your concept: Choose a concept that builds out your positioning but also one that defines your piece from others

As you consider all of these areas, bring them all together with one single cohesive statement. Through market research and careful consideration of what you value most in this business, it's possible to create an authentic and robust restaurant position that enables others to clearly recognize your business and build a relationship with your service.

Let Our Team Help You

At Prix Fixe Accounting, our business consulting services are a core component in your restaurant positioning. Let us help you become a proven, modern organization that fills your role in the community. 

Navigating Non-Traditional Hires in Firms

There’s no doubt that the makeup of CPA and accounting firms is changing. Just as technology continuously changes to affect the speed and scope of our service delivery, the “people” component also is in flux and a major factor in the way firms work with their clients, especially for firms that understand client advisory services.

But there’s an elephant in the room. Should firms hire “non-traditional” or non-accounting people in their firms?

The AICPA’s 2021 Trends report states that “Accounting graduates trended downward in the 2019–2020 academic year, with decreases of 2.8% and 8.4% at the bachelor’s and master’s levels, respectively.” Coupled with a steady decrease in new students majoring in accounting—and that 75% of CPAs will have reached retirement eligibility by 2020—firms are facing a significant talent shortage.

Many suggest that the path forward is to try to make the profession “sexy” for Gen Z (born between 1997-2012). However, one of Gen Z’s primary interests in the workplace is having a positive impact on the world. Accounting also suffers from a PR issue, with the most common descriptions being “dull,” “boring,” “unexciting,” and virtually every other synonym for uninteresting. While we can argue that accounting isn't quite as boring as it's often portrayed, the profession is hardly going to save the world. This sort of image issue will likely take decades to change. 

Other alternatives are to make the CPA exam easier, remove the 150-hour rule, or partition the certification into specializations. Commentary from the AICPA and its membership seems to disagree with this path forward because it dilutes the brand, so that outcome is equally unlikely.

So what is the solution? 

At Prix Fixe, because we specialize in the restaurant space,one of the requirements to work for our firm is experience in the hospitality industry. We fundamentally believe that it gives our team the understanding and empathy required to work with some of the most overworked and underpaid entrepreneurs in our economy. However, we quickly discovered that our requirement also attracted a lot of non-accountants seeking a career shift out of the restaurant industry, leading us to ask: How much should firms hire “non-traditional” or non-accounting candidates in their firms?

Yes of course, you should, especially if you niche like we do. Here are some tips and guidance on how to handle the hires and navigate the process.

What to look for In a potential employee?

When looking at a resume, the strengths aren’t going to be as clear as they would be if you were looking at an accountant’s resume. For example, instead of looking for skills and experience, what you’re primarily looking for is experience that lends well to the tasks an accountant will perform.

Accountants are heavily process-driven, but also need to understand how to perform a wide range of tasks with precision and accuracy. In our hospitality world, we see a number of positions that excel at these skills, especially in higher end restaurants. These include bartenders, sommeliers,  and chefs. All of these positions require an encyclopedic memory, and are continually improving and iterating on their repeated processes. 

Looking at your own business, if you are focusing on specific industries, what positions within these industries share these skill sets? Engineers? Nurses? Paralegals?

Onboarding your new employee

It's worth noting that before making the hiring decision, a clear conversation needs to be had with the candidate about your expectations. A substantial portion of the conversation should be around training. For Prix Fixe, we require non-accountants to take financial and managerial accounting courses from accredited institutions. If a candidate is looking to make a career change, this will be a huge benefit to both of you.

Once you have made the hire, the monumental task of onboarding begins. Someone with no accounting background will need substantial training commitments. Planning your training around any paid training such as college courses or online courses should coincide with the tasks you are training your new employee on. It's important to also note that you should be very thorough in your review of their work, providing  continuous feedback with a theoretical explanation of why something needs to be done a certain way.

What’s the timeline and investment?

The investment of hiring and training a non-accountant is daunting; it’s the single largest drawback to this hiring practice and certainly shouldn't be a first hire. You should also be prepared to shell out a considerable amount of professional training. It's just unreasonable to assume you'll have the capacity to be a professor of accounting while trying to run a business. You can set up an education reimbursement policy, laying out the requirements for success so that any employee who falls short will need to pay for a larger portion of the educational cost.

The timeline is also considerable. Many firm owners suggest that it takes up to six months to truly get an accountant up to speed. For a non-accountant, that number is closer to 18 months in our experience.

Are non-traditional hires worth the effort?

There is something to be said about investing in someone’s future. Telling a hire that you are willing to make a significant investment of your time and money in them is an incredibly empowering statement. It buys loyalty and compassion and actualizes an employee right from the start. In the end, some of our best hires have been non-accountants, and while the risk, investment, and time commitment is high, we wouldn't trade those hires for the world.

Disclosure: This is a paid partnership with Intuit

Prix Fixe Accounting's Shopping Guide for your favorite cook.

Every year, you sit there wondering what to get that ever so special someone for the holidays. Fear not, your accountant’s are here to save the day. This ever so carefully curated list tries to stay local, but mostly can ship anywhere. Happy Holiday, y’all!

Who needs a fanny pack when you have a pickle pouch?

Frankly, we're obsessed with this hot dog/pickle pouch! Use it as a clutch or as a pencil pouch. This cute bag is the perfect everyday accessory!

• This zipper pouch measures 9.5" x 4.5" x .75"

• Hand-beaded with premium glass beads.

• Color variation may occur. That's what makes it unique!

• Designed in San Francisco, California. Ethically made in India. 

• Original Jenny Lemons design. 

---

The illustrious, infamous, swag from lil deb’s oasis.

For your hot friend/neighbor/crush/grandma - designed in collaboration with Ryan ♡ @ry-pm ♡ spread the heat. .69 cents of every purchase goes to a charity of their choosing.

---

Dont have time to make green curry? Little truc’s got you.

Two varieties of fresh green chilies, makrut lime leaf, white pepper & coriander make green curry paste spicy, bright, & floral. Check out their website or look at the back of the pouch for a recipe for green curry! Little Truc also has a variety of other pastes, and Chili Oil’s (which will put that OTHER company to shame) as well as a gift box if you’re not sure what to get… or want it all.

(5 oz. pouch) ​Vegan & GF

ingredients: shallots, lemongrass, green chilies, galangal, garlic, cilantro, makrut lime leaf, organic lime juice, spices, salt

---

Local Buy: Dare Bottleshop, Lenox MA

If you’re near us, then you have the opportunity to drop by one of our favorites, Dare Bottleshop in Lenox, MA. This cute little shop is a great option for picking up your holiday wine supply, or gifts in general. Ben & Mary are always happy to make a recommendation, but here are a few of our favorites.

Osmote Cayuga White Pet Nat: “This is Pet Nat! Vintage number 4 of our Cayuga White Petillant Naturel. A naturally sparkling wine made from an heirloom NY wine grape.

Pale yellow color with a light mousse and fine bubbles. Orchard fruits and citrus in the aroma. The palate has true verve with striking acidity and flavors of lightly salted and grilled yellow plums. Perfectly refreshing and an expression of sparkling that could only come from the Finger Lakes.

Sugarmaker's Cut Traditional Maple Syrup: For maple purists out there- this is it. Runamok's best organic maple syrup of each season is set aside for our Sugarmaker’s Cut. Grade A: Amber Color – Rich Taste.

---

The Socks & Kitchen Apparel for those that really want to say what’s on their mind

BlueQ is a Berkshire company with all the swag for those that really have something to say. Catering to every type of nerd, they have a lovely assortment of socks, bags and other fun stuff that bae will love.