It’s a new year. A fresh set of calendar days for your bar, restaurant or retail business. A clean slate to reflect and strategize business operations and opportunities. The start of a new year is typically slow for many hospitality businesses. The post-holiday season is a great time to organize your desk, implement new technologies into your operations, plan new marketing strategies and initiatives and look for growth opportunities. We put together a few areas of focus for bar and retail business owners to set their businesses up for success in 2024.
Reflecting on the Past Year
Before leaping into planning action, it’s important to take stock of the previous year.
- What were the wins and challenges?
- What goals did you have? Did you achieve them or did you fall flat?
- What areas need improvement in the new year?
- What areas did you excel in?
These are all vital questions to ask and reflect on before any action can be taken. This reflection time helps organize focus areas so that you can successfully manage annual planning and direct resources toward the appropriate places.
Setting Clear Goals and Objectives
Once you’ve had time to reflect on the past year with your team, it’s time to get together and set clear goals and objectives for the new one.
This is where setting specific, measurable, achievable, relevant and time-bound (SMART) goals comes into play. Starting and setting relevant goals for your restaurant can be challenging. Here are some examples to inspire you:
- Cut business costs by 5 percent by X date.
- Reduce waste by 10 percent next quarter.
- Boost review ratings across all channels by 1 star by mid-year.
- Slash turnover rate by 25 percent by year-end.
- Hire or promote 2-3 experienced top-level employees by mid-year.
- Increase monthly net restaurant sales.
- Enhance daily net restaurant sales analysis.
- Explore new revenue streams, like loyalty programs and gift cards.
- Optimize top-selling menu items.
- Experiment with new menu items for improved sales.
- Consider service charges as an alternative to traditional tipping.
Remember, short-term goals can have long-term effects, so it's essential to set both types of goals for your business's success.
Achieving Your SMART Goals
Share your goals openly: Communicating your goals with your team fosters accountability and encourages their involvement, allowing team members to provide valuable feedback.
Create an actionable plan: Develop a step-by-step strategy to make your goals more attainable. Break down the necessary actions and set deadlines for each to keep you on course.
Schedule regular progress check-ins: Consistent progress reviews are essential to keep you accountable and ensure you're on the right path toward your SMART goals. These check-ins also help you gain a holistic perspective and identify any adjustments needed to reach your objectives effectively.
Financial planning is a cornerstone of success for bars and retail businesses as they gear up for the new year in 2024. Effective financial planning involves meticulously budgeting for expenses, analyzing past financial performance and setting clear revenue targets. It's crucial to allocate resources wisely, whether it's for marketing initiatives, inventory management or staff training, to maximize profitability. Moreover, businesses should also consider the potential impact of economic factors, industry trends and any unforeseen challenges. By proactively addressing financial matters and developing a robust financial strategy, bars and retail businesses can position themselves for a prosperous and stable year ahead, ensuring that they can weather any financial storms that may arise.
Financial planning and management is a crucial aspect of any business, and it requires a comprehensive strategy that addresses multiple areas. Here are some key areas to focus on:
- Budgeting and Expense Control: Develop a comprehensive budget for all operational expenses, including rent, utilities and supplies. Implement cost-saving measures to reduce overhead without compromising quality.
- Inventory Management: Optimize inventory levels to minimize carrying costs and reduce the risk of overstocking or stockouts. Implement a reliable inventory tracking system to monitor product turnover and reduce waste.
- Pricing Strategies: Evaluate and adjust pricing strategies to remain competitive while maintaining profitability. Consider dynamic pricing models or promotions to drive sales during peak times.
- Marketing and Promotion: Allocate a budget for marketing efforts, including online advertising, social media campaigns and promotional events. Analyze the ROI of marketing initiatives to ensure they align with revenue goals.
- Staffing and Labor Costs: Evaluate labor costs and staffing levels, adjusting as needed to optimize productivity and control expenses. Consider cross-training employees to enhance flexibility and reduce labor turnover.
- Financial Forecasting: Develop financial forecasts that project revenue and expenses throughout the year. Use forecasting to identify potential cash flow gaps and plan for adequate working capital.
- Tax Planning: Consult with tax professionals to explore tax-saving opportunities and ensure compliance with city, state and federal tax laws. Set aside funds for tax payments to avoid financial surprises.
- Debt Management: Review existing loans and debts, exploring opportunities for refinancing or consolidation. Establish a plan to reduce outstanding debts and interest payments.
- Supplier Relationships: Negotiate favorable terms with alcohol suppliers to secure competitive pricing and discounts. Explore vendor loyalty programs or bulk purchasing agreements to lower procurement costs.
- Technology Investments: Consider investments in technology solutions, such as point-of-sale (POS) systems and inventory management software, to improve efficiency and data-analysis capabilities. Evaluate the cost-effectiveness of technology upgrades and their potential to enhance both customer experiences and sales.
Effective inventory management is a crucial factor in the success of retail businesses. It involves balancing the availability of products to meet customer demand while minimizing costs and waste. This balance can be achieved through meticulous planning, restocking, and clearance strategies that involve forecasting demand, setting reorder points and optimizing order quantities.
In addition, keeping a close eye on product trends is paramount. Monitoring consumer preferences enables retailers to adjust their inventory to reflect changing tastes and market dynamics. To do this, businesses must use advanced inventory management tools that provide real-time tracking of sales, inventory levels and product performance — not to mention staying up to date on trade sources such as industry news, social media, magazines and blogs.
In today's highly competitive retail landscape, mastering the art of inventory management is not just about cost savings; it represents a strategic move that can have a significant impact on the bottom line and customer satisfaction. By leveraging data-driven insights, retailers can optimize their inventory, reduce waste and improve sales, ultimately leading to increased profitability.
Staffing, Education and Training
A bar’s greatest asset is the dedicated staff that runs it. So it makes sense that investing in proper training and skill development is essential to its success. That starts with having the right team in place.
Hiring right is the key to achieving greater customer service and customer experience in the new year, ultimately leading to greater sales and profitability. A major area of focus and investment is in hiring new staff where needed, especially during peak seasons as well as promoting existing staff where appropriate.
Promotions are great ways to reduce turnover, a rampant problem in the industry. Keeping talented staff is also more cost-efficient. According to a recent study by the Center for Hospitality Research and Cornell University, replacing a single hospitality employee can incur an average cost of $5,864. For the typical full-service restaurant, this can translate to an annual expense of approximately $146,000, a financial burden that can significantly impact the viability of your business.
Another way to plan for greater success and reduce turnover in the new year is to invest in further skills and developmental training. Here are a few ways owners and operators can provide further education and training:
- Employee Training Programs: Develop a comprehensive employee training program to enhance staff knowledge about wines, spirits, cocktails and food pairing.
- Certification Support: Encourage employees to pursue industry certifications like sommelier or mixology courses by offering financial support or study materials.
- Regular Tastings and Workshops: Host regular tastings, workshops and seminars led by industry experts to expand employees' palate and product knowledge.
- Cross-Training: Cross-train staff across different roles within the establishment to improve versatility and promote teamwork.
- Online Courses and Webinars: Provide access to online courses and webinars on relevant topics, making it easier for employees to learn at their own pace.
- Library of Resources: Build a library of industry-related books, articles and resources that employees can access for self-study.
- Mentorship Programs: Establish mentorship programs where experienced staff members can mentor newer employees, fostering a culture of continuous learning.
- Guest Speakers: Invite guest speakers, such as winemakers or mixologists, to share their expertise and insights with your team.
- Supplier Partnerships: Collaborate with alcohol suppliers to organize product-specific training sessions, educating staff about the unique features and stories behind various brands.
- Feedback and Evaluation: Regularly assess employee performance and knowledge, providing constructive feedback and opportunities for improvement.
Technology has become increasingly important in the day-to-day operations of bars, restaurants and retail businesses. Over the past decade, the industry has been moving towards a tech-centric future, but the COVID-19 pandemic has accelerated the adoption of bar and restaurant technologies. As a result, these technologies have become incredibly popular in today’s landscape.
Technology has become an indispensable tool for hospitality businesses, providing them with agility, cost-efficiency, and a way to automate menial tasks. With a range of new tools such as point-of-sale (POS) systems, digital marketing tools, inventory management systems, and payroll software, restaurants can improve their operations and save both time and money. As a result, it's essential to assess the technology in use and adopt new solutions that can further streamline operations in the new year.
The beginning of a new year offers bars and retail businesses a valuable opportunity to take stock, strategize and prepare for success. By reflecting on the previous year's experiences, setting well-defined goals and crafting a robust financial strategy, businesses can position themselves for growth, increased profitability and resilience in the face of unexpected hurdles.
It's important to remember that success doesn't happen overnight but results from a blend of diligent effort, careful planning and regular progress assessments. By following these tips, businesses can pave the way for a prosperous and stable 2024.