The autonomous mobile robot Tally 3.0 scans the stock in a supermarket.

Simbe Robotics

Automation and robotics are typically associated with multi-million dollar budgets at multi-billion dollar companies. But as the cost of technology has come down, it has become more affordable for smaller businesses — even small businesses.

Outside of Atlanta in Jonesboro, Georgia, THAT Burger Spot!, a four-location burger and wings joint, was getting tired of being delayed by phone orders.

There are burgers from beef, turkey, impossible, black bean, fish, chicken and more. Then there’s the matter of how many patties, sauces, and other customizations. Given all the choices, a single telephone order took an average of seven to eight minutes. And that’s only if there are staff on hand to take those orders.

“Our menu is a bit complicated, there are a lot of options,” said Cedric Pool, president of THAT Burger Spot Franchising, Inc.

“Staff… it was a problem and will continue to be a problem,” said Pool. “We thought we could automate the order taking process, we wouldn’t have to pay anyone to do it.”

After a search, they found a solution in Grubbrr, which sells freestanding kiosks that can take in-store orders and integrate them with online orders and a POS system. Pool started out with two kiosks in just one location, costing $14,400, which is roughly how much the company would pay someone over the course of a year to take orders over the phone.

After customers made the kiosk and online ordering easier, the restaurant’s average ticket order rose from about $19 to more than $21. Average revenue per hour worked rose from the high range of $50 to $85, Pool said.

“Restaurants are notorious laggards when it comes to technology. And they’ve done this mainly because they had access to extremely low labor costs,” said Sam Ziez, CEO of Grubbrr.

According to a recent report from the National Restaurant Association, seven in 10 restaurant operators said they don’t currently have enough employees to meet customer demand. The restaurant industry added 1.7 million jobs in 2021, but many restaurants are still severely understaffed and expect labor shortages to continue to hamper growth.

In the most recent CNBC|SurveyMonkey Small Business survey for the first quarter, 17% of respondents in the lodging and food sectors identified a workforce shortage as the biggest risk to their business.

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Dirk Izzo, senior vice president and general manager of NCR Hospitality, a technology provider to restaurants, said customers in cities like Denver and Jacksonville, Florida, cite kitchen and front desk staff costs as 20%-40% higher than a year. past.

“When you take on those costs, anything you can do to automate things is a big savings,” Izzo said.

An example of technology that has become commonplace and affordable for restaurants is contactless ordering and payment. More and more restaurants are using QR codes at the table that encourage customers to order and pay from their phone. This saves time for staff, who would otherwise have to take the order and then manually enter it into the POS system.

Technology is getting cheaper

The cost of robotics is being driven down by wider investments from the global smartphone industry and the self-driving car industry.

“The cost of this technology has come down quite drastically,” said Brad Bogolea, co-founder and chief executive of Simbe, which provides an autonomous robot that uses computer vision to track inventory in a supermarket, drugstore or hypermarket.

For now, Simbe mainly works with large retailers, but Bogolea said the company also works with smaller retailers with 50 to 100 stores. Simbe’s robotic inventory worker can check an entire store’s inventory three to four times a day and place orders instantly when items are running low. “It’s not humanly possible to scan with that frequency or fidelity with human labor in these environments,” Bogolea said. Retailers traditionally spend between 30 and 100 hours per store per week on inventory.

In many cases, technology providers offer automation as a service. Instead of being saddled with high initial equipment costs, companies pay a monthly fee. Located outside of Chicago, GreenSeed Contract Packaging implemented robotics to automate some particularly repetitive packaging functions, such as packing baby snacks into a box or moving packed boxes off the line onto a pallet. The company is billed monthly based on the number of hours the robot works.

“Instead of using a temp agency to get a temp, you can bring in a robot,” said David Gray, chief executive of GreenSeed. Depending on the structure of the contract, the cost of the robotics is 40% to 50% of what it would pay to hire a person, costing at least $17 or $18 per hour, excluding benefits or the cost of an employment agency. “So you can really cut your costs and get better consistency,” Gray said.

Although the cost of technology has fallen, smaller companies – without economies of scale – still have to spend more as a percentage of their revenue than their larger counterparts. Outside the food sector, a striking example comes from the accounting world. According to a recent Ernst & Young survey, 70% of large companies with revenues of $30 billion or more plan to spend between $2 and $6 million on tax automation technology. By comparison, 81% of smaller companies with revenues under $1 billion plan to spend between $1 million and $3.99 million — less, but not that much less.

“That’s a pressure on the smaller companies where they spend almost as much,” said David Helmer, Global Tax and Finance Operations Leader at Ernst & Young.

Inflation and small business economy

Inflation affects how small businesses view the cost of automation compared to rising costs in other core areas of their business.

San Francisco-based Nana Joes Granola has faced increased costs of raw materials and labor and is trying to figure out how to lower the cost of its premium granola as consumers look more closely at decisions about their wallets. Michelle Pusateri, owner of Nana Joes Granola, said options include reducing bagged volume by a few ounces, reformulating the recipe to lower ingredient costs, or figuring out how to use automation for the manufacturing process and equipment used. it can make. easier to pump out more volume.

The company, which has Whole Foods among its retail partners, faces a highly competitive market and while it was able to pass some costs on to customers in 2021 as sales boomed, it is more challenging to maintain a ​granola to be more expensive during inflation, Pusateri said. †

The company received a Covid EIDL loan, mainly to stock up on ingredients that have risen in price, an inflationary factor that forced it to buy larger volumes to close better deals. But Nana Joes Granola has also set aside a small portion of that loan for automation on the packaging side of production, and she may also need to take out business loans for equipment.

“I don’t think inflation will go away anytime soon. We’re going to be stuck in this and have more volume to pump out with the same staff and overhead is what we’re looking at right now,” Pusateri said.

Pusateri, who said she supports the higher wages workers receive across the economy, adds that investing in automation doesn’t mean cutting the workforce. “The women who have been working for us since 2016 are doing the same things over and over and there is fatigue in that,” she said.

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