Product Mix Maximization

There are many forces that when working together create successful enterprises. The key ones for us are a streamlined concept, a great operator, a long-term vision, a unique selling proposition and ultimately a product mix that resonates with your guests.

For the first half of this year many enterprises have engaged our firm to advise them on store flow and product mix. The question arises often, what makes a great product mix? First and foremost, a great product mix is one where when the guest walks into your enterprise, and without thinking knows what to order. Your role as an enterprise is to guide the guest through the experience, while the guest feels as though there are many choices to make; the actual decision process is easy.

When thinking about product mix, we highlight a few quick tips to maximize the guest experience and financial success.

  • Day parts. Which ones will you be offering; breakfast, lunch, midday, dinner, late night?
  • Core products. Establish the core products that the enterprise will produce.
  • Maximize kitchen production. Are the core products you are producing actually the ones that are anticipated to be the top sellers? If not, think how to best maximize kitchen production for the top sellers.
  • Complimentary products. Once you have established the core products, think about what additional product groups compliment your menu.
  • Streamlined Concept. With all of the above, does your product mix speak to your vision of the concept.

Try not to steer far from your concept. We have worked with many enterprises that want to be everything to everyone and this formula is a recipe for disaster. No one enterprise can be everything but one enterprise can be something great with a clear message.

Happy product mix…TaraPaige Group.

NYC Hospitality Alliance Seminar: Protect Credit Card Information

NYC Hospitality Alliance is hosting a seminar on protecting payment and credit card information against data thieves and responding to suspected data compromise incidents.

Topics include:

  • What every hospitality merchant must do to minimize the risk of a data breach and to comply with payment card industry security standards;
  • Actions merchants must take if a compromise is suspected, both to protect customers’ information and minimize the merchant’s financial and reputational risk;
  • Coming changes in payment card acceptance practices and technology about which hospitality industry members need to be aware.

When: Monday, May 19th, 2014 | 10-11:30am

Where: NYIT | 16 West 61st Street | 11th Floor

Cost: $20 Member | $40 Non-member

Find more information and register here.

9th Annual Fast Casual Executive Summit in Denver

The 9th Annual Fast Casual Executive Summit will be held in Denver, Co from October 12-15 at the Four Seasons Hotel. Lon Southerland, senior director, global food and beverage for Marriott International, will be the keynote speakers. The event is designed to bring together the movers and shakers of the of the fast casual industry.

See the agenda and more information here.

Expert Hospitality Advice Sponsored by the New York City Hospitality Group

Join the NYCHG on May 19th 6pm – 8pm at STK Meatpacking for a special evening of expert hospitality advice. A Q&A WITH SAM GOLDFINGER, CFO OF THE ONE GROUP; ANDREW PESKOE- PARTNER, GOLENBOCK, EISEMAN, ASSOR BELL & PESKOE LLP; LUKE HOLDEN- OWNER, LUKE’S LOBSTERS; AND ANDY PFORZHEIMER- OWNER, BARCELONA WINE BAR & RESTAURANTS NYCHG EVENT

5 Steps for Calculating Sales of a Food Enterprise Operational Budget

Starting an early stage food enterprise and growing to a multiunit operation involves a lot of moving parts to line up successfully. One that is paramount is to implement an operational budget in setting your business up for financial success. Budgeting is the most basic and effective tool for managing your business finances yet, many operators forego this crucial step because of the additional time and work involved. For all food businesses, the budgeting process can help identify the realistic profitability and financial metrics of the enterprise. In short, it can save you the grief of overspending and help you better manage different aspects of your operations.

We often get asked the question, “How do I go about preparing for an operational budget?”  A good budget stems from a well-understood concept with a streamlined product menu and we start with building the sales formula.  Our sales formula in preparing for an operational budget is highlighted below, we will use an early stage bakery as a sample.

1)     Identify your product groups.
The product groups are your different revenue streams that you will be offering.  Ex: Baked goods, savory product, home made beverages, coffee, tea, packaged product.

2)     Clarify your hours of operation taking into mind the seasonality of the business.
This will enable you to identify the day parts you are open, the hours per day and whether or not you are open for weekend and weekday business.

3)     Price the product groups per day part for an average check.
For example, the savory group may have a smaller check average at breakfast than at lunch.

4)     Identify a targeted location.
This is one of the most important things you can do for your enterprise. Finding a location that works for your business. Remember, rent in NYC is typically around 10% of sales. So if you are looking for a 1,000 sq foot space in NYC and the broker quotes you $200 / sq foot, your rent per year will be $200,000. This means that in order to make your rent worthwhile, your business needs to generate $2,000,000 in sales per year.

5)     Once the targeted location is set, engage in traffic counts.
We follow traffic counts for nearby food businesses of the target location you are looking to open as well as similar concepts in other locations.  You want to cover all day parts and this is the part of your research that may take a few days to cover all bases.

Once your research is complete, you are now ready to build your sales with the above inputs.  The key to building and best leveraging an operating budget is to make sure that your concept can support the expenses required to keep it running. It is nothing short of a balancing act.

We have a financial pie chart, which aids in this balancing act. The costs may vary for your operation, but the pie must always be equal to 100%. The level of investment made into the business goes beyond the numbers, it lies in good people, quality of food, training and standard operating procedures to keep the enterprise humming along with strong profits.

restaurant pie chart

Domino’s Launches New Application

Domino’s, pizza chain, is launching a brand new iPad application that features a 3D “realistic pizza builder.”

The application gives  customers an opportunity to see a “more realistic view” of their end product as the customize with various sauces and toppings. In addition, the iPad app will also feature a tracker that monitors the progress of your order in real time. Similar to other Domino apps, users will have access to Domino’s national menu, coupons, and a store locator.

The new app is way of supporting and growing Domino’s strong percentage of digital orders. According to Tech Crunch, digital orders account for about 40 percent of all the company’s sales in the U.S.

New Air Quality Rules Target Restaurants and Food Trucks

Mayor Bill de Blasio has backed a set of antipollution laws that would have a significant impact on a number of New York City’s restaurants, commercial kitchens and food trucks. The stated goal of the laws is to target “pollution sources that currently have little or no emission control requirements.” The regulations would require businesses to install emission filters on ovens and char-broilers, ban new wood-burning fireplaces and encourage refrigerated trucks to switch to battery power from diesel fuel. The proposals would food businesses of all kinds including but not limited to mom-and-pop pizzerias, food vendor trucks, high-volume char-broilers and vehicles that deliver or serve refrigerated food or beverages.

The New York City Hospitality Alliance and the New York State Restaurant Association have yet to make a public comment.

Video Q&A With Cover, The Mobile Payment Application

Watch a video Q&A session with with Cover, the mobile payment application that is taking NYC by storm. The payment processing start-up offers a free app that stores diners’ credit card information and tip preference which are automatically charged at the end of the meal. Restaurant operators use its back of house app (also free) in addition to their POS system to process Cover user payments. Best part – processing fees are  a lower than what typical credit card companies charge. Watch the 10 minute video here.

 

Panera 2.0: A Digital Ordering Platform

At Panera’s Investor Day, Chairman and CEO Ron Shaich unveiled Panera 2.0 – a digital ordering platform that the Company plans to deploy at all of its locations by 2016. Panera 2.0 has two components:

1)  “Rapid Pick-Up,” which allows guests to order from the Panera website or the new Panera mobile app and then pick-up in-store

2) “Enhanced To-Go and Eat-In” kiosks (enclosed and mounted iPads), that enable the customer to order in-store

The idea is to better serve both take-out and and dine-in customers by making the experience more seamless and efficient. Shaich stated that this is not simply a need for new technology but “an evolution of Panera’s guest experience.” The Company’s vision was digital ordering program that utilizes technology to offer customers an experience that is faster, more accurate, and more personal.

You can read more on Panera 2.0 here at Fastcasual.com

 

 

Live Webinar: Branded Restaurant Apps – Integrating Mobile with Traditional Marketing

Branded mobile apps are fairly new to restaurants and are often an underutilized component of their marketing campaigns. Customers today are growing accustomed to mobile and online ordering, payment, loyalty programs and promotions as a part of a single brand experience. Splick.it, an enterprise level SaaS platform, is hosting a live webinar geared towards restaurant operators and marketing teams. Register here.

Live Webinar: Branded Restaurant Apps – Integrating Mobile with Traditional Marketing

Date: Thu, May 1, 2014

Time: 02:00 PM EDT

Duration: 1 hour

 What you’ll learn:

  • How to introduce your app and drive adoption
  • How to engage your customers via your mobile app and impact their behaviors
  • How to promote effectively via your mobile app
  • When to use traditional marketing tactics and when to use mobile promotions
  • How to integrate messages and offers so customers have a consistent experience across all brand channels
  • How to optimize mobile promotions by segmenting users (new, lapsed, best customers)
  • How to transfer contact information and behavioral data between your traditional marketing systems and your mobile/online platforms
  • How much control should your franchisees have for setting up mobile marketing?

 

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