Choosing the Co-Op Model for Your Restaurant Business

Restaurant co-ops are fast becoming the model of choice for businesses as they struggle to cope with budget restrictions and unpredictable economies. In an economic scenario where keeping a restaurant business afloat is challenging, the option of co-operatives can prove to be useful.

Restaurant co-operatives are very helpful at a time when industries are dealing with financial crunches that may come upon unexpectedly, maybe even leading to shutting down of operations. A co-operative model for restaurants works well towards ensuring productivity and profitability as the business moves ahead.

A restaurant co-op could also have the best answer to ensure the business stays up and running. Traditionally, restaurant duties lead to overworked kitchen and wait staff. Long working hours coupled with lack of adequate time off results in loss of motivation as well. Add to this, discrepancies in workers’ salaries and confusion regarding tipping, and you have a recipe that can get the restaurant to shut down.

Why co-operatives?

A co-operative helps bring several resources together so that each of the components aids, complements and enhances the other. This is a very effective model for businesses that need to work with budget restrictions. For a restaurant, the co-operative model makes great sense because most of the work needs dedicated teamwork. The kitchen needs to be in perfect coordination with the wait staff and those taking orders and delivering them. This is one of the most important ways in which to ensure patrons keep coming back. However, this coordination ties in with the business budget and salaries paid to the staff at all levels within the restaurant. However, in a co-operative model, existing resources can be shared and optimized so that everyone is benefited. If managed efficiently, this model can increase the scope for profitability as well.

There are other ways in which a restaurant co-operative may work. A food joint can also partner with, say, a car repair service where people can get something to eat while they wait for their car to be serviced. This theory is already seen in malls, airports and shopping areas as well as along highways where people stop to get gasoline for their vehicles and also make brief halts for refreshment.

A restaurant co-op may not resolve all problems of a restaurant business, but it can apply the benefits of a co-op model to help the business stay afloat, provided other variables are in place.

There are several other benefits of a restaurant co-operative:

> Reduced taxes: A co-operative may not need to pay taxes on their surplus earning; these may be refunded. If you form a restaurant co-operative, you may be taxed only on earnings from the restaurant, and not on individual income.

> Reduced expenses: Forming a co-operative helps a business to run on shared resources. By itself, this helps optimize existing cash reserves better. Benefits are also extended by suppliers and vendors who also stand to gain from serving a larger entity that forms as a result of the coming-together of two businesses.

> Improved services: Because restaurant co-operatives harnesses shared resources, there is reduced chance of overwork and grudges regarding payment and salaries. This leads to higher employee morale and better services. Eventually, this means better services and improved productivity.

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