- 13 October 2020
- Restaurant Insurance
The restaurant industry has traditionally been prone to upheavals. Shifting market trends and changing customer tastes could all ruin the best-laid plans. Running a restaurant is a notoriously challenging and fickle business and isn’t for the faint of heart. You need a strong will and an iron-clad temperament to weather the storms that routinely rock the industry, and CO restaurant insurance is a necessity to protect your hard-earned business.
Today’s restaurateurs have to deal with an endless array of operational hurdles. Whether it involves managing two restaurants or 2,000 outlets, navigating the restaurant industry is as risky as it has ever been.
Challenges faced by today’s restaurants
What are some of the most significant challenges faced by restaurant owners today? The circumstances vary depending on the location and the specifics of the business. But most restaurant owners could expect to deal with one or more of the following:
- Increasing labor costs
- High turnover rates
- Quality control challenges
- Fierce competition
- Lackluster economy
- Negative publicity
These are only some of the more serious obstacles that restaurant owners today have to face. Any one of these could make it more challenging to run the business and even put the establishment’s future in jeopardy.
What restaurant owners are doing to cope
Interestingly enough, many enterprising restaurant owners see these challenges as an opportunity to flourish in an increasingly saturated market. As the competition across different arenas grows fiercer, determined restaurateurs eagerly take advantage of the opportunity to set themselves apart from the crowd.
One such restaurant chain is Olive Garden, which is owned by parent company, Darden. According to CEO Gene Lee, the hugely popular chain has been gearing up for a recession for some time. Even so, Lee feels that there are still opportunities for well-positioned brands to achieve their business objectives.
Darden itself isn’t taking things sitting down. Management has seen fit to adopt a two-pronged approach to dealing with the most challenging issue that the company faces: labor.
On the one hand, the company has embarked on a series of measures to streamline operations and reduce costs. On the other, efforts are underway to recruit and retain a more effective workforce while encouraging higher-paid workers to help the company achieve its objectives.
Of course, the approach to dealing with these operational obstacles varies from restaurant to restaurant. But many establishments adopt a similar strategy, which often involves reinvesting resources into infrastructure and operations.
This approach could focus on bolstering technology or improving staffing procedures. Regardless of what form it takes, the result is that the company can withstand the worst of the challenges that most restaurants face.
Darden believes that restaurants that take these measures will always have an advantage over competitors. By adopting a proactive approach, more forward-looking businesses will be better able to deal with the shifts in consumer dynamics and dwindling confidence brought about by the recession. For Darden, and other restaurants that follow this approach, focusing on quality will help them sustain themselves through any downtrend and market fluctuation.
Technology to the rescue
One other common factor in dealing with the operational challenges in the restaurant industry is technology. Established multinational corporations such as KFC, Domino’s, Chipotle, and Jersey Mike’s utilize the mobile platform Zenput to track operations from mobile phones or tablets.
With this tool, companies are better able to identify factors that hinder operations and customer experiences. Among the most significant factors identified are:
- Increasing labor costs
- Higher turnover rates
- Inadequate or insufficient training
The high rate of turnover among employees is a particularly serious obstacle, especially among quick-service establishments. With full-service counterparts, insufficient training and the failure to follow operating procedures are the most pressing issues.
What this means for restaurant owners
Ultimately, restaurant owners will have to ask more and more from their workers in the coming months. As salaries increase and recruitment numbers plunge, current staff will have to assume more responsibilities. Restaurant owners will expect increased performance from every department and every employee.
Even with the threat of recession looming, restaurants will continue to do business. Even so, the more discerning market will necessitate a strategic approach that involves more efficient operations bolstered by technology and innovation. By embracing these changes and adopting a suitable strategy, tenacious restaurant owners should be able to withstand the operational risks inherent in the business.
About Mountainside Insurance Management
Mountainside Insurance Management, LLC is a multi-state insurance brokerage and management specialist. We are an independent brokerage and work with over 150 A+ carriers to secure comprehensive coverage for our clients. Our brokerage is committed to providing the highest quality insurance and risk management services at the most competitive premiums with hands-on services tailored to our customers’ needs. For more information about reducing your risk, contact us today at (720) 800-9495.