The 80/20 Rule is simple – it says that a relatively small number of causes (about 20%) is responsible for a great number of effects (roughly 80%).
This is good news – if you find out what the 20% are and work on them, you can have a significant impact on sales improvement, cost reduction and improved restaurant management.
This often means 80% of your sales come from 20% of your customers (particular individuals, or a type of customer), so looking after them should be a priority. It’s not always exactly 80% or 20%, it could be 90/10, but the proportions are what is important.
Good news for training: staff really ‘get this’ and like finding ways to apply it. Explain it to them with your examples, and ask them to find more. This is also 80/20 at work – in this case a small idea can have a much bigger impact!
Using 80-20 to Improve the Menu
- 20% of your menu items will give you 80% of your sales, and about 80% of the items will give you 20% of your sales. Time to look closely at the best and worst sellers on your list, and adjust accordingly. In this time of high food costs and labour shortages, every menu should be shorter!
- At the same time, 20% of your menu items will give you about 80% of your profits – what are they? Can you give them more promotion on the menu or through signage and social media?
- What are some of those low-profit items that should be removed?
- 80% of party menu sales are from 20% of what’s available – can these prices be increased?
- Both dessert sales and wine lists are areas ripe for improvement using 80-20 principles.
Using 80-20 to Reduce Food & Beverage Costs
- List the weekly cost of your food items purchased on a spreadsheet. Now use the ‘sort’ function to list them from highest to lowest value. Chances are you’ve got expensive seafood, beef and chicken up the top – are these items being stored and counted as carefully as they should be?
- 80% of kitchen prep time is for 20% of the menu, and vice versa – what’s your example?
- If 20% of your wine and beverage list gives you 80% of your sales, check the need to keep so many different labels, especially as it usually involves carrying expensive stock.
- 80% of the value of what you buy comes from 20% of your suppliers – are you giving them extra time to get the very best deals, or do all vendors get equal time?
- Find more ways to apply this with other Cost Control articles on this site.
Using 80-20 with Restaurant Staff and Managers
- 20% of your wait staff are probably, with their skills and enthusiasm, making about 80% of the sales – are you looking after them and helping them get good tips?
- 20% of your employees will cause 80% of your staff problems – who needs to move on?
- A small number of your management team may receive a large proportion of the wages – are they producing corresponding value?
- Some managers spend 80% of their time on ‘busy work’ and fussing, while others can get the same work done in much less time. Do you have the calm, productive and efficient managers you need? And how does this apply to your use of time?
- Effective managers spend a lot more time working out ‘why’ and ‘how’ and ‘what’s next’ instead of constantly reacting to daily turmoil. The 20% of their time they put aside for this has a big, big payoff!
Using 80-20 for Restaurant Operations
- 20% of POS keys are used for 80% of sales – are they in the most accessible place?
- 20% of the agenda items in a meeting can take up 80% of the time – how can you improve on this? It’s no wonder people can get frustrated!
- 20% of tables are where 80% of customers want to sit – can you improve the less popular ones?
- 20% of your opening hours generates 80% of your sales – how is that reflected in the rostered hours?
- Ask your team to find out some 80/20 examples in their own work – they will have many ideas. From that you can work out how more could be done with less.
Applying 80-20 to daily life…
- 20% of your clothes will be worn 80% of the time.
- 20% of your friends or family take up 80% of your time.
- 80% of what you need to know in a book or website can be found in 20% of the pages.
🤚 Check the weekly discoveries on Hospo Reset – information & inspiration for restaurant, cafe & foodservice operators.