Strategies to increase sales and generate profits – manpower: Chapter 4

Chapter 3: Continuation of the very best measures for recruiting good people.

Now we are approaching the second half of the article.

The fundamental need for recruiting good people is to create a shop that is profitable and has a queue. We briefly touched on this in the previous chapter, but it is important, so here are four key points about strategies to increase sales and generate profits.

1. strategy to provide high value (high product quality)

There is a Ramen Jiro near our Tokyo branch, and there is always a long queue.
Why do so many customers queue for over an hour to get to this popular restaurant?

The answer is simple.
It’s because you can taste something that you can’t find anywhere else.
Or it’s not just the taste, but also the value, including the volume.

Ore no Italia” and “Ore no French” have taken the world by storm, and “Ikinari Steak” is doing well, but the ingredient cost ratio at these restaurants is said to be 60%.
Sushiro, the leader in the conveyor-belt sushi industry, has an ingredient cost ratio of 50%, while the average ingredient cost ratio for the entire food service industry is 40%.

However, most udon noodle and ramen shops, which are struggling, operate with a raw material cost ratio in the region of 30%.
This is because of past habits, and because 30-40 years ago, the udon noodle and ramen restaurant business was able to attract enough customers to thrive even with that level of cost.

Therefore, the easiest way to increase customer satisfaction is to increase the raw material cost ratio.
However, most shopkeepers mistakenly believe that if they increase the raw material cost ratio, they will not make a profit.

In fact, however, profits are determined by the number of customers.
Increasing the raw material cost ratio also means increasing the product power, and any shop or business only starts to make a profit when it crosses the profitability break-even point.
And the bigger the break-even point is exceeded, the bigger the profits will be.

Therefore, in order to make a large profit, it is essential to acquire a large number of customers.
If you don’t have enough customers, you can’t bring in enough profit.
This can easily be seen in the simulation of our business model.

2. the next strategy is good taste and good appearance

As long as you are in the business of providing food, it is only natural that it should be good, and with the recent advent of gourmet websites, you can easily be compared with rival restaurants across the country.

In my experience, if your restaurant scores 3.5 or above on a gourmet website, it is unlikely to fail.
If graduates of our noodle school follow the proper procedure after graduation and open a restaurant, it is not difficult to get a score of 3.5 or higher on the gourmet websites.
In recent years, with the development of social networking services, Insta-Eye has become popular, and beautifully presented dishes are spread by customers on the internet.
Therefore, in this day and age, it is no longer necessary to advertise yourself at all.

However, if you make a mistake at the opening of your restaurant and serve low-quality food and get an initial score of around 3.0, it is very difficult to recover afterwards.
For this reason, you should never advertise with flyers or other advertising at the time of opening, and you should never make any effort to attract a large number of customers, as you are not used to doing so at the time of opening.
This part is taught in detail in our noodle schools.

3. the number of seats has a significant impact on sales and profits

Recently, most of the students who come to our noodle school want to build small shops with 10 to 20 seats.
Considering the severe shortage of labour in the coming years, it is extremely difficult to make enough profit and secure excellent staff in such a small shop…
Because the more talented people you have, the more you will think about your future.
The possibility of being here five or ten years from now and being happy is a very serious issue for people who join the company.

If they are paid the same salary, they will want to work in a place with a good future potential.
Therefore, in order to be the shop of choice for good people, the shop needs to be of a certain size.

No good person would want to work in a small shop with just the owner and two or even two or three people, who are always rubbing noses with the owner.
You can see this very clearly in the ramen industry when you look at a shop like Ippudo, which has succeeded in globalising its business.

After analysing the business models of shops that have succeeded in securing manpower and developing a chain, I realised that it is difficult to develop a chain unless one shop has monthly sales of around 10 million yen. But to sell 10 million yen a month, you need a shop with at least 40 seats.

4. the number of parking spaces is also an important factor

When opening a restaurant in Japan, most locations are automobile locations that require parking.
Nevertheless, there is no shortage of people who are forced to open a restaurant with little or no parking.

The only condition that can never go wrong in such a bad location is a score of 4.0 or higher on a gourmet website.
If the score is above 4.0, the restaurant is always thriving, no matter what location it opens in.
However, a score of 4.0 or above is very narrow, within the top 0.1% of the udon noodle and ramen restaurant market, and is very difficult to achieve in reality.
In addition, in suburban shops, no matter how many seats are available, if there is insufficient parking space, customers will not be able to enter the shop.
3.Therefore, the number of parking spaces is a very important factor for suburban shops, even more so than the number of seats.

4.For the convenience of our customers, we constantly analyse the trade area and determine the number of parking spaces required. (Yamato’s analysis of shop openings)

5. measures to compensate for manpower shortages in the meantime

Now, we have discussed the severe manpower shortage measures.
Fundamentally, the royal road to countering labour shortages is to create ‘profitable shops’ and ‘shops with queues’, in other words, ‘good shops’.

In this context, the Yamato Group (Yamato Seisakusho and San Takumi) would like to propose the following four measures to counter manpower shortages that we can immediately help with.

1.Use of manpower-saving noodle-making machines
2.Purchase high-quality commercial noodles from a homemade noodle-making agency
3.Purchase of high-quality soup
4.Use of high quality original sauce, flavoured oil, kaeshi, etc.

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