Let's start with the ideal scenario in mind, then reverse engineer the steps to get there. What does a successful Big Slice look like, 6-8 months from now at our new location? Q1 of 2021:
Big slice has survived the post-virus societal paradigm shift, and is now a delivery/take-out operation where we work less and spend less, while making more money. This involves 2 parts:
1. Increasing profitability (and efficiency)
2. Increasing revenue (and volume)
IMPORTANT: Increasing profitability & efficiency must come BEFORE increasing volume & revenue.
Otherwise, if we increase volume & revenue before improving profitability & efficiency, then we:
1. Are increasing sales of a less profitable nature.
2. Will find it hard to find the time & resources to improve profitability and efficiency because we'll be stuck in a chaotic environment of dealing with a high volume of orders in an inefficient environment. (We're already experiencing this now to some degree.)
Now we look at each of these two factors in order. First, increasing profitability, then, increasing revenue:
A) increase amount of meals & revenue each cook generates daily
1. Reduce the menu - By reducing the amount of different menu items a cook can make, we streamline their work flow. Because they are making more of the same meals over and over again, they become better and faster at making them. This increases employee productivity AND customer service and quality of meals. (It also means less mess in the kitchen.)
2. Reduce payroll - By increasing the efficiency and production of each employee, we are reducing our payroll costs.
3. Default boost in profit - Also, if each of our menu items is more profitable (see below), then by default, each employee is not only more productive, but also more profitable for us because not only is he making more meals, but each meal is bringing more profit.
B) Increase profitability of our menu
1. Master List of Ingredients- First we need to know which menu items are least and most profitable. How to do this? Calculate raw ingredient costs and create a master list.
2. Determine Raw Cost of Menu Items - Next, we quantify how much each menu item costs us to make. This is simple: you look at the ingredients of each menu item (ex pizza), then reference the master ingredient list we made earlier, and add up the raw cost of each ingredient to find the raw cost of the entire pizza.
3. Determine profitability - now that we know our raw cost of each menu item, we find it's profitability by subtracting it from the price that we charge for that item. Once we've done this for all items, we can arrange them from least to most profitable with the click of a mouse.
4. Remove least profitable items- Now that all our menu items are organized from most to least profitable, we remove the least profitable menu items (or adjust their pricing if possible given market value and popularity). It's important to remember that removing less profitable items not only increases profitability, but efficiency too.
5. Promote most profitable items - Next, we increase the visibility and popularity of our most profitable items by including highlighted pictures, making their position in the online menu more visible, and maybe even spicing up their names (relating them to the tafuri fictional story/brand?)
6. Scale - Now that we already have a master list of all ingredient costs, we can use it to create new menu items for new virtual brands, and make profitable menu items right off the bat, without going through all of this again. Essentially we can now re-use that one-time effort to keep making new profit streams. This is key to growing a profitable business.
C) Reduce raw food costs
1. Maintain or reduce raw food costs - Once we have successfully eliminated less profitable menu items and increased production of our more profitable items, this means we will shift our ingredient consumption: We will need more of the ingredients that make up our more profitable menu items. This creates an opportunity for paying less for those ingredients because when you order more volume, you generally pay less. This will improve our weekly cash flow.
C) Reduce rent
1. Smaller Space - Once we move to the delivery/pickup model, we have no need for a dine-in area, so we can lease a space with less square footage.
2. Cheaper Location - expensive main-street real estate is no longer needed, because the revenue from main-street exposure is replaced by revenue from 1) delivery apps’ marketing of our restaurant and 2) having multiple virtual brands.
3. Find Ideal Location - How do we find a good location? We can use the BYOD feature on UberEats (bring your own delivery drivers) to expand our delivery radius periodically and measure where we are getting the most orders from. This not only helps with finding the location with the greatest demand for our food, but we are also increasing our brand awareness in the process, before moving into that new location.
C) Manage Utilities
1. Smaller real estate MAY reduce utilities, but, increased kitchen use due to newly added virtual brands will increase utilities as volume of orders increases. Nevertheless, this is still very profitable as delivery revenue/profit far outweighs increased cost of utilities.
Now that we have increased the profitability of each menu item, AND we have improved the efficiency of each employee producing these more profitable menu items, we can start increasing the amount of menu items we are producing.
A) Increase the amount (volume) of orders
1. New Virtual Brands - We can increase volume of orders by creating new virtual brands in the same single location. As we create each new brand's menu, we add on to the master list of raw ingredient costs when needed, and create only profitable menu items.
2. Add delivery apps - We can do this by increasing the number of delivery apps we use. Adding RITUAL to our already existing brand is the first step. Then upon creating a new brand/menu, we launch it on all 4 apps (Uber, Doordash, Skip, Ritual)
3. Add Catering - Catering is our most profitable venture. If the world returns to normal, we can leverage the PLATTERZ platform for each one of our brands, with a compact, profitable menu for each.
4. Delivery App Promotions - We can leverage the various marketing promotions that Uber Eats and other apps offer.
B) Increase the average dollar amount of each order
1. Bundles - We can do this by creating bundles, deals, and increasing prices incrementally as our brand grows stronger
2. Premium Brands - Having different virtual brands means we can create more “premium” brands/menus that can bring up the average menu item price of our overall restaurant operation. Remember: people won’t know that our different virtual brands are related to each other - it’s like having 3 or 4 different restaurants in one place.