HotOperator Wage Increases Blog

7 things you can do to offset wage increases without pissing off customers.

Recent National Restaurant Associations surveys indicate minimum wages have fallen as a chief restaurant operator concern. The National Restaurant Association’s “Trends Survey,” released early in 2019, found minimum wage increases and labor costs were number 4 on list of restaurant business concerns, behind recruiting and retaining employees, building and maintaining sales volume, and dealing with competition.

Nearly half of states slated to increase minimum wage (but it should be every state)

Hikes scheduled as $15 an hour federal proposal stalls in Congress

It’s only a matter of time before wage hikes reach more and more states and communities. With tight labor markets and more people working service jobs, the cost of labor is going to continue to go up, even if we hit a recession in the next couple of years. HotOperator has come up with 7 things you can do to offset wage increases without pissing off customers.

Keep in mind, a higher minimum wage will attract more and better employees to your business. So while higher minimum wages may seem like a bad thing for your business, it will actually help take care of the number one and number two concern for restaurant operators in today’s market: finding and keeping employees. As a side benefit, better and more satisfied employees will also attract more customers, so really, it’s all good, when you think it through.

Here, then are 7 things you can do to offset wage increases without pissing off customers.

1 – Menu Matrix Your Restaurant – this will help you better understand your customers and what keeps them coming in. It will also tell you where the ‘sweet spot’ is for pricing your menu. There is often a lot of money that can be captured that is slipping through the cracks in your business. To get a Menu Matrix done for your restaurant, contact HotOperator here.

2 – Engineer Your Menu – through product positioning, mental anchoring, strategic price points and the right copy and graphics, you can often get a significant increase in profits for your business. If you are using an online menu system, or doing the menu yourself, you will not know how to find the money you are losing. A better menu will bring more money into your restaurant. Here is a link to the proof that Menu Design Engineering Works.

3 – In-Out-Promotions – the lifeblood of any good restaurant is a steady stream of new items. Not that these items will always sell, but they will catch attention. And attention is what you need to stay top-of-mind in your restaurant.

4 – Employee Check-ins – do you pay your employees to check-in on social media when they punch in at work? Now that you have well paid and happy employees, make sure you offer them an extra buck every day when they punch in. Their friends and families will be more likely to stop in and see them, and when they do, they will eat something.

5 – Social Media Promotions – if you are not using social media well, or at all, you are missing a great way to get new business. Get help. Do not try to keep up with social media on your own. If you do, you will miss great opportunities to get people talking about your business. Social media is a communication tool. When it is used correctly, it’s a powerful tool. OrderUpSocial.com can be engaged here.

6 – Train Your Staff – consistency is key to the success of any restaurant. Now that you have better, more devoted employees because they are being paid a living wage, train them. Make sure they are asking for the appetizer order. Get them to sell desserts when your shift is slowing down. Promote more expensive drinks. It’s good for them, good for your customers and great for your bottom line. Here is a link to turning your server training into a game. It’s fun and it works!

7 – Stop Complaining – and get your head in the game. Higher wages are not the end of the world, and not the end of your business either. Instead, for every restaurant that offers a higher wage, you just got a new customers with a little discretionary money in their pockets looking to celebrate.

HotOperator works with restaurant clients all over the country, including restaurants located in communities with $15.00 minimum wages. And in each of those communities, the restaurant owners all worried what impact the higher wage would have on their business. And in every instance those business owners all Mark & Kelly Lauxsurvived and thrived. Our advice: Stop bitching and start planning.

Mark and Kelly are a design-engineer team and managing partners of HotOperator. They have been working in the restaurant business since 1989. Either can be contacted through the HotOperator website, or by calling 800-316-3198.

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