Posist Restaurant Management Software is a Best Cloud Based Point of Sales System in India Designed for Restaurant Business.
The Restaurant Times blog is a complete guide on how to run a restaurant, new technology updates, restaurant marketing and different strategies.
With the rising competition and ever growing technology, the food space has been volatile for quite some time now. Newer innovations are kicking in every day and creating for themselves an identity and a cult. Latest on the scene is cloud kitchens. There have been a number of restaurateurs raving over the concept and even more trying to figure out the intricacies of it. So much so, that cloud kitchens are actually being considered as the smarter way to run the restaurant business. To understand how a cloud kitchen works, its model, operations and other factors to take into consideration, read ahead.
What is a Cloud Kitchen Restaurant
First, we look at what is a cloud kitchen. Popular belief is that a cloud kitchen is any restaurant that operates just from its kitchen, has no dine-in or takeaway place physically and thrives on home deliveries. While this is true, this image is incomplete. The business model of a cloud kitchen is very different from what we hold in popular belief. To understand this in detail we will introduce two lesser-known terms of the restaurant industry, Delivery Kitchen and Ghost Kitchen.
A delivery kitchen is a restaurant that has no physical space and no dine-in or takeaway facility as it does not exist as a restaurant of any sort. It relies completely on third-party integrations or home delivery orders placed on call or through a website. The main difference between a cloud kitchen and a delivery kitchen is that in a Delivery Kitchen the outlet operates independently for a single brand name. The orders are received and prepared under the same brand. If the owner runs the restaurant under one single name then the format is that of a Delivery Kitchen.
A Cloud Kitchen, like a Delivery Kitchen, is a restaurant where there is no physical outlet and the food is prepared for all sorts of deliveries. What differentiates a Cloud Kitchen from a Delivery Kitchen, is the number of brands or restaurants operating in the same outlet. In a cloud kitchen, the number of restaurants operating is more than one. The owner could be the same person or different people. For example, if a restaurateur who owns a delivery kitchen and delivers South Indian food decides that he should start delivering Mexican food as well, but instead of adding Mexican to the menu of his current brand, he starts operating a different brand that sells Mexican from the same delivery kitchen, then he turns his delivery kitchen into a Cloud Kitchen.
The reason why restaurateurs are preferring to start a new brand instead of introducing new items in the same menu is that customers prefer to order from a different restaurant if they think it specialises in that particular cuisine.
For instance, customers are most likely order pasta from a restaurant named La Italiana instead of Punjabi Delight even if the same chef is preparing the pasta. But the customers don’t need to know that!
Ghost Kitchen or Dark Kitchens
Ghost kitchens are delivery/cloud kitchens which are virtually located in different destinations but operate on a hub and spokes model. This means that there is one central kitchen where the food is prepared and delivered to the subsidiary kitchen. These subsidiary kitchens are located in different areas. When a customer orders, he is rerouted to the nearest virtual kitchen from where the food prepared in the central kitchen is delivered.
Now that you understand the difference between a delivery, cloud, and ghost kitchen, it is simple enough to understand the business model of a cloud kitchen. In the simple structure of the model, a cloud kitchen is a delivery kitchen with two or more brands belonging to different people or the same person operating from the same kitchen. ZIS, Katappi and Asian house are some of the popular examples of Cloud Kitchens.
How To Run A Cloud Kitchen Restaurant
Let us take a look into what it actually takes to run a cloud kitchen restaurant.
1. Order Taking in a Cloud Kitchen
Since the primary source of order-taking is online, a cloud POS is a must for Cloud Kitchens and Delivery Kitchens. This is so because there are multiple restaurants and multiple channels being dealt with when it comes to collecting orders in a cloud kitchen and it is virtually impossible to keep up with different orders pouring in from different sites without a POS that will not only handle this task but also give you an analytic report regarding it.
Another means of taking orders is the through telephonic calls. For this, you need a Call-Center Panel that will route the orders to the right brand and outlet. When you have multiple brands operating at the same outlet, you need a robust POS system that can give you detailed insights about the number of orders received for each brand.
Since all of the brands are integrated with online ordering platforms such as Zomato and Swiggy and have their own websites and calling numbers, it can get borderline possible to keep up with the number of orders. Not only do you need to the billing ensure proper delivery, you need to keep them separate. Having an end to end POS is virtually the only way to keep up.
Orders collected in a cloud kitchen are processed like normal orders. The only difference lies in the fact that each order can belong to a different brand and so the unique taste of each one needs to be maintained. In order to solve this, you can have different chefs catering to different brands or different kitchen areas designated to the team of different brands under the same chef. Investing in a POS with a Kitchen Display System will be helpful as it will display orders directly in the kitchen on a screen and enable your staff to keep track of all the orders that have been prepared and need to be prepared.
3. Staffing a Cloud Kitchen
A cloud kitchen because of the lack of a dine-in or take away facility does not require any wait but it does require a highly skilled kitchen staff. Your food is the only thing that the customer is in contact with so it has to be flawless. In a cloud kitchen, the same chef may prepare the food of different brands or there may be different chefs designated for each brand. Either way, a full kitchen staff is the apex staff requirement in a Cloud Kitchen. Apart from that, you will only need delivery boys, if you plan on having an in-house delivery system and kitchen helpers.
4. Managing Suppliers
Suppliers in a cloud kitchen can vary from a single establishment supplying for all the brands in the cloud kitchen to different suppliers for each brand. In some cases, you can even have a combination of both. While finalising suppliers for a cloud kitchen is not too different from a regular commercial restaurant kitchen, you must still look for a combination that is the best for you. If your brands have the same base ingredient but some varying ingredients, you can order the base ingredient from the same supplier and the varying ingredients from different suppliers. If your supplier has a different variety of ingredients, you can order for all your brands from the same supplier. Just like in the case of a restaurant supplier, you need to ensure that the supplier for your cloud kitchen is just as punctual and particular with the orders.
While finalizing the supplier, also ensure that you can dictate your terms well. As a cloud kitchen you might be tempted to order from different suppliers even when it is not needed to keep accounting simple, but remember that if you end up ordering small units from different brands, it will cost you more. Not just that, but you will end up being a very small customer for the supplier which means that you will never be able to leverage your own terms.
We would say that before finalizing your supplier, you should make a list of all the ingredients you would need across brands and try to order as many as possible from the same supplier. It will make it easier to keep track of inventory, you will be able to hold a single person accountable, in case of changes it would be far easier to coordinate and you will definitely save money.
5. Managing Inventory
Managing the inventory in a Cloud Kitchen is thought to be the most complicated task of running a cloud kitchen. Actually, that is not entirely true. Yes, having multiple brands under the same roof can make managing inventory a little tedious but by developing a system of checks and numbers you can handle it without much problem. Your POS can handle ordering and computing inventory once a minimum is fed to it.
6. How to Market a Cloud Kitchen Restaurant
Since Cloud Kitchens have no such physical outlet, the marketing needs of a cloud kitchen are very different from those of a normal restaurant. Because there is no outlet where the customers can just walk-in, a cloud kitchen essentially lose out on visibility. To compensate for this a very strong marketing and branding strategy are required. Here are some things that you can do in order to market your cloud kitchen.
(i) Have an Online Presence
Given that the Cloud Kitchen model negates any physical presence, you must build an online presence for yourself. This will give your restaurants a virtual address and enable customers to find you with ease. Having a website and different social media pages will not be enough. You will have to update them regularly and make them as interactive as possible as that is the only medium through which your customers can reach out to you. Listen to them there, talk, participate in comments and address any negative feedback there and then. Your followers are your most loyal customers, remember that.
(ii) Third Party Integrations
Most people today order using online apps like Zomato, Swiggy and Foodpanda. Your integration with them is a must. Being on these platforms will get you more orders for home delivery, and because they have their own delivery mechanism, the cost of delivery will not be out of your pocket. Apart from that, being on these platforms will also make you discoverable to your potential customers. Most people who order through these apps do not know whether they are ordering food from a restaurant, a delivery kitchen, a ghost kitchen or a cloud kitchen. What they do know is that if the food looks good, they can try a new place, so get yourself integrated with all the delivery platforms out there to enjoy large-scale discoverability.
In order to build your brand presence and to make people try your food, you could get into tie-ups with other restaurants who are not your direct competitors. For example, if you run a Cloud Kitchen with a dessert brand, you could tie up with restaurants not having their own dessert menu with schemes like, buy a meal for two and get a choco-lava cake free. When someone does so in the restaurant, the cake will come in your brand’s packing with a pamphlet of your restaurant. This can be extended to online orders as well. Not just other restaurants, you can run such promotions within the brands in your own cloud kitchen. If you run a Mexican restaurant in a Cloud Kitchen format and are introducing a dessert bar under a different brand name, you could have the same scheme tied up to your own Mexican brand.
(iv) SMS and Email Marketing
SMS and Email Marketing though not that new are still as effective when it comes to marketing a Cloud Kitchen. In fact, sending your regular customers messages with exclusive offers and emails with your new menu items or contests that you are planning to run will keep you fresh in their minds. As a Cloud Kitchen, your newer menu innovations may just get missed because people order from cloud kitchens with a specific dish in mind. SMS updates regarding new dishes that you have added to the menu, schemes that you are running for these dishes or codes to get complimentary dishes with the next order will keep your customers updated and orders will keep pouring in. To get more out of SMS marketing use these Restaurant SMS Marketing tips to double your business.
(v) Distributing Flyers and Pamphlets
Just because Cloud Kitchens are online, it does not mean that offline marketing is not an option for Cloud Kitchens. Remember a huge amount of orders come to a cloud kitchen through regular calls. In order to promote this channel of ordering and creating an identity among people who do not belong to the internet generation, flyer and pamphlet marketing is the way to go. You can distribute flyers which double up as your menu and leave your website link and phone number on it. Families mostly preserve these flyers and use them when they are ordering next. To know how you can use flyer and pamphlet marketing to your advantage, read how flyers and pamphlets marketing can boost your restaurant’s sales.
With the pace at which restaurant industry is growing, cloud kitchens are the next new thing. Not only do they bring the dream of serving good food close but also make it accessible by eliminating the challenges of high rentals and investments. We hope this comprehensive guide to cloud kitchen operations has been useful and will help you open your own cloud or delivery kitchen restaurant.
More than half the restaurants that open fail in their first two years of service. This is a known fact in the restaurant industry and one of the main reasons the industry is so feared by new entrepreneurs. While it is true that the restaurant space is ruthless, there are still those who open up and not just survive the business but also lead the industry. What enables them to do it? While there are multiple factors that contribute to the success of a restaurant, managing the restaurant finances the right way is a major reason behind it.
Most restaurants lack a good financial management system. Usually, first-time restaurateurs are so focused on arranging the capital for opening a restaurant, that they forget about the working capital, that is, the money that would sustain the business, until the restaurant reaches its breakeven and starts generating profit.
Breakeven Point of Different Restaurant Formats
To understand and manage your restaurant finances, first, you need to understand the timing for it. The point where your expenses match your sales is called the restaurant breakeven point. At this point, your profit in a monetary sense will be zero but reaching this point would mean that your business is running successfully enough to cover all your costs. To reach this point you need to project enough costs in your business proposal before you start a restaurant. By computing your expected footfall with your average costs, you need to set aside a working capital in the planning stage itself before you open your restaurant. As for the duration for which long this amount should last, different restaurant formats reach their breakevens at different points.
Quick Service Restaurant: The average time taken for a Quick Service Restaurant to reach the breakeven point at a single store level is usually around 3-6 months. At a company level, where there are multiple outlets it is at least 2 years.
Casual Dining Restaurant: The average time taken to reach the breakeven point for a Casual Dining Restaurant is around is 18 months.
Fine Dining Restaurant: A lot of investment is required to set up a Fine Dine Restaurant, even more so if you are serving alcohol. The average time taken for a Fine Dine Restaurant to reach the breakeven and start bringing in profit is at least two years.
Now that you know the average breakeven points of the restaurant industry and that you need to prepare a reserve for that, next comes actually managing and tracking the reserve and other finances so that you can smoothly reach a break even and compute profits as soon as they begin.
How To Manage Restaurant Finances
There are certain things you will have to do from the start in order to be able to track your finances. These include things like budgeting your expenses, preparing a cash flow statement, forecasting and more. Here is a what you must do to manage your restaurant finances.
1. Budget Your Expenses
The first and foremost step to managing finances is to budget them. You know your total fixed costs, your total working costs and you know how much money you have and have accounted for how much you can make. Budget it all to avoid confusion and keep a track of expenses. Budgeting will not just tell you what your assets and liabilities are, but will show you what your priorities are supposed to be when it comes to income generation and cash repayment.
2. Maintain A Cash Flow Statement
A cash flow statement will tell you how your daily activities are impacting the amount of cash and cash equivalents you have in your business. A cash flow statement will tell you precisely how much amount you have in hand and in kind, how much is coming and how much is going. This statement is the mirror of how your restaurant looks financially and maintaining it is the only way you can plan for future and compute where you are standing at present. When a budget will tell you how much to spend and not to spend and not what to spend, a cash flow statement will tell you how much you are spending, where you are spending and how much that is affecting your restaurant budget.
One of the biggest mistakes most restaurateurs make is to track expenses from different sources. Never do so! While both the sources may be accurate and true, this will only lead to confusion. Never try to track your expenses from both the cash flow statement and the passbook simultaneously. That is not how expenses are accounted for. A cash flow statement and a passbook are matched to reach the final amount but never can they be used in place of each other or simultaneously together.
4. Check Your Reports Daily
Get into a habit of managing your accounts daily. Doing so will give you a clear idea of what your daily sales and expenses look like. That way you can track if your restaurant is performing well enough or not. If there is a pattern that sales follow, look at what is it, what can you do to improve it and how can you better your sales- all these answers come from drawing a daily account. This will not simply help you plan and project your sales but also cut down on unnecessary expenses. A quick look at the reports after the entire day is like looking at the report card and seeing how you can improve. This is the method to reach your break-even and beyond.
Tips To Keep Your Restaurant Expenses Under Control
Now that you know how to account for your earnings, next is understanding ways in which you can and must cut down on your expenses. Remember your break-even will come as soon as your expenses match your earnings. At the same time, profits will be made when your revenue is greater than your expenses. To reach breakeven and make profits, increasing your revenue is one way, the other is decreasing your expenses. Here is what you can do to keep your expenses in check that will help you manage your restaurant finances.
1. Keep the Labour Costs Under Control
While the staff is important and so is fair wages, keeping the labour cost in check is just as important. By this, we do not mean that you must not pay your staff enough, but that you must not overstaff your restaurant. When you overstaff your restaurant not only are there more wages going from your pocket, the productivity is less and you are also depriving your service staff of tips. The correct way is to employ only as many people as you need to reach the highest level of productivity and pay them a fair price for that.
Also, you must make sure that there is a proper system of shift management in check. Even if you are not overstaffed, because of poor shift management you may end up having to pay overtime to some employees even when it is not required. This will be an extra expense that could easily be avoided with a little management.
One of the worst restaurant finances mistakes most restaurateurs make is to run a high credit bill. When you buy ingredients on credit, yes you can actually get a cheaper deal, but at the same time you can over-stock and lock your money. The worst part, when something like this happens most ingredients are perishable and if you have overstocked it means that sales will not be matched, so your credit bill just ended up costing you more. For the initial years, it is better to not run too high a credit bill and keep most your payments cash.
3. Enforce Payment Deadlines
In the initial years, you must make sure that your credit bill is not too high. That being said, we know it is impossible to operate without some credit payments. To tackle this we suggest that you put payment deadlines on yourself before the creditor puts it on you. This way you will be taking care of immediate liabilities first, making sure that they do not turn into bigger issues later. Being quick with your payments will also establish your goodwill among your creditors and when you really need it, they will not mind bending the deadlines and other rules for you.
4. Prepare For Known Expenses
When you are running a restaurant business, there are some expenses which are recurring and known to you. These include rent, labour, electricity, raw ingredients etc. Always keep cash aside for meeting these running expenses first and preferably in the beginning itself. This way you will know how much cash you have to last the month without any of these fixed and working costs. Keeping resources aside for your working costs will also ensure that you always maintain a minimum balance to keep yourself afloat.
5. Control Your Food Costs
Food costs account for a major part of your overall restaurant expenses. While these are fixed, and you cannot really reduce them by much, you can very much keep them in control. Wastage is the biggest reason for high food costs, thus making proper stock and inventory management a crucial aspect of cost control. You should also consider optimising your menu to ensure that you do not have any items that are not selling as much and only leading to escalated food costs.
Learning how to manage restaurant finances is not something that can be learned in a day but something that you will yourself shape up and evolve into. Nonetheless, the above said ways of managing restaurant finances are the most basic techniques that you must practice and develop a habit of so that your restaurant can reach breakeven as soon as possible.
Running a restaurant brand that had its inception right back at the pre-partition times, isn’t an easy task. Notwithstanding the predicament of the situation, Monish Gujral took on the challenge rather well and strived hard to pave the path of the Moti Mahal brand to new heights. In a candid conversation with The Restaurant Times, Gujral reveals the journey of Moti Mahal, how they ventured into this volatile domain of the F&B space and managed to maintain their iconic status all these years. Currently, there are 10 different chains under the parent brand name and is a global chain of restaurants with over 120 franchises in India and around the world.
In Conversation with Monish Gujral of Moti Mahal, One of the Oldest Restaurateurs of the Country
The first Moti Mahal was established in Peshawar and the restaurant soon became popular amongst both the Indian and the Britishers.
After the partition, the Indian journey started, the first outlet came in Daryaganj in 1947. This outlet too became a success, precisely because the Delhiites had not tasted the North-West frontier food with the Punjabi essence.
Indian leaders like Jawaharlal Nehru, Indira Gandhi, Zakir Hussain, and among various foreign dignitaries like Richard Nixon, John F. Kennedy, and Mohammad Reza Pahlavi visited Moti Mahal to sample the food innovations – its tandoori delicacies. Slowly it became an iconic and a legendary place for people to visit.
And thereafter the success continued. The expansion of Moti Mahal in South Delhi began in the 1970s. Monish started getting attached to the brand in 1983, right after school as an intern and the journey that began as an internship became his lifelong partner. He continued to work even when he was in college. On his first day at work as an intern he was not allowed to sit at the front office, on the contrary, he was asked to work in the kitchen. So, in his three years of college life, he learned how to cook, and worked on gathering comprehensive knowledge about the backend management of a restaurant. For six years, he kept on dwelling on the backend operations. Only after he received his post-graduate degree was he shifted to the front office.
While this period might have drained Monish, he did not know that mastering the backend operations was one of the basic prerequisites of being a successful restaurateur until he started managing a new outlet that opened in Model Town completely on his own.
“I set the standards of the dishes that are served at my restaurant. I cook myself. I am a chef and an author of four award-winning books. Hence, I do not serve anything unless I am myself happy with its standard.”
How Moti Mahal Brought in Innovation to Keep Up with the Competiton
In the last decade of the last century, it became apparent that the brand was losing its hold in the market. With so many restaurants cropping up, providing the same authentic cuisine, somehow Moti Manhal as a brand started to get lost in the concrete jungle of the restaurants. This was when Monish realized about the human nature, “when you do an innovation in a particular area, people accept it, people relate to it, but after a few days people tend to forget it”, he said.
Monish realized that unless a drastic step was taken, keeping Moti Mahal stay afloat in the ocean of new restaurants can be rather difficult. Considering the predicament of the situation, when India was experiencing the retail boom back in 2003-2004, he started a restaurant chain under the parent brand, Moti Mahal Tandoori Trails.
To scale the business at a speed, Monish decided to go ahead with Franchising and also started experimenting with the menu items. The brand started to give the authentic items an international touch. For instance, broccoli, baby corn, sprouts, lobsters which were not used earlier were included in the menu. They even changed the look of the restaurant by bringing in the concept of open seatings and started experimenting with the presentation and brought in a contemporary touch to their dishes and the outlets.
How the Brand Ventured into Franchising
The brand’s franchising journey began in Faridabad, back in 2003. And thereafter immediately, in DLF in 2004. As these outlets became a success, a number of people started approaching for franchising. And since franchising seemed the only way to grow Monish readily gave in.
However, Monish knew about the problems that tagged along with franchising. One of the major problems of franchising is maintaining consistency across all the outlets. “Franchising is a very dangerous domain. There was also the issue of granting the brand to someone who might not do justice to the brand name that has been established for so long.”
As a solution to the problem, Monish created a very comprehensive and a well-designed system. “Although we were franchising, we had our own share, our own account manager, and our own people involved in the running of the franchise restaurants. We even had our own quality and audit checker, and at times, the staff as well,” Monish said. This ensured that all the franchisee outlets abided by the set standards of the brand and did justice to the historic brand name.
The Expansion of Moti Mahal
Slowly and steadily the brand started expanding beyond Delhi, to Mumbai, Nariman Point, Punjab, and Ludhiana. When Monish started looking at the two or three-tier cities, he did a little bit of an experiment. They focused not only on the north-west frontier cuisine or the Indian Mughlai cuisine but introduced multicuisine restaurants offering continental, Chinese and the like. The brand radically adapted to the changes that were happening in the F&B space and was flexible enough to suit to the preferences of the customers.
The expansion started at a massive scale and soon 10 franchisee models were brought into force: Tandoori Trail, Kebab Trail, Dosa Trail, Golden Oven, Food Truck Trail, Freshly’s, Express, China Trail, DNY Bread Bar, and Chat Trail.
Reality Check From the Oldest Restaurateurs of the Country
According to Monish, when you are catering to a wide domain of customers, both in India and foreign, simply replicating the business models will not help the business to grow further. You need to re-establish your brand as per the customer preference which keeps changing. And if you are unable to maintain the pace you will without a doubt be left behind.
“When I ventured into the business, the knowledge I extracted from my past experience, especially during the internship that I did under my grandfather and my parents came handy. And I realized that there is no shortcut to success. You’ve got to strive hard and strive longer if you want to make that mark in the F&B space.”
Monish also emphasized the use of a comprehensive restaurant management system, which according to him is one of the basic prerequisites if a brand wants to expand. While expanding and managing a restaurant chain, it becomes impossible to manually track the entire operations of all the outlets across all the geographies, and hence it becomes imperative to leverage a restaurant management software.
“Presently we are using POSist. And the journey has been great so far. I get detailed reports of all the operations, which helps me to have a complete control over all the outlets.”
The third generation restaurateur signed off by stating that unless a restaurateur is an all-rounder and has a detailed understanding of the entire restaurant operations, one can hardly hope to have a successful restaurant business. Hence, if you want to make that footprint in this volatile domain of the restaurant industry, you’ve got to strive hard and strive longer!
With the augment of this new age of technology where everything is getting digitized, why will the restaurant menus be left behind? Replacing the hard copies of restaurant menus with the digital restaurant menu will help you in ways more than one. Not only is it cost effective since you will not have to print menus every time you bring in the slightest change, it is very appealing to the eyes since your customers can see the entire menu on one sight, which in turn will help you in upselling.
How a Transition to Digital Restaurant Menu Can Boost Your Restaurant Business
Digital restaurant menu has an upper hand over the traditional restaurant menu for various reasons. Since most of the restaurants are automating their restaurant operations through a robust restaurant management software, it is easy to make the transition as well. The main reasons why the shift to the digital restaurant menu is a must are:
1. Reduced Dependency on Manpower
Automation always frees up the reliance on staff and reduces dependence on the external forces like the manpower. If you have an e-menu on every table, then orders need not be taken down by your servers, which will in turn help in freeing them and reducing the need to schedule servers during peak hours. Not only will this reduce your need to tap the right restaurant staff, and then train and retain them, it will also reduce the scope of mistakes while order taking and the instances of misplacing orders. Since it is your customers who are placing the order the possibility of sending the customers a wrong order would be nearly negligible. The digital restaurant menu is a highly accurate system and leaves little room for mistakes.
2. Easy Menu Updation
When digital restaurant menu when integrated with your robust POS systems, all changes on the menu relating to the menu items and the pricing can be managed remotely so that either all or only the selected few restaurants (if it is a chain) gets it updated on the e-menu.
3. Enhances Customer Experience
The digital restaurant menu is highly beneficial for your restaurant since it will enhance your entire guest experience. With a stellar HD photo displayed on the tablets, it would allow your food items to appear more attractive. Your digital restaurant menu will also be equipped to suggest food items to customers according to what they have been browsing or point them to the more popular dishes for that week. This implies that your digital restaurant menu will be able to provide a personalized experience to your customers.
It will even help to lower customer’s estimated wait time. Hence, it gives customers a reason to look at the screen for more than the expected time, and correspondingly this provides the restaurant with another chance to slip in promotional or other branded content. Overall, it ensures that you maintain a healthy conversation with your customers throughout their stay at the restaurant, while they eat or wait for the food to be served.
4. Cost Effective
Unlike a traditional static menu board, costs can be reduced by diminishing the need to design, print, ship and reprint menus whenever promotional items are added to the menus. Once you have your digital restaurant menu designed, installed and integrated with your POS maintaining it as simple as uploading pictures and posting on any of the social media platforms.
Since a digital restaurant menu can be easily edited it allows your café or restaurant to be dynamic in your offerings – for example, tweaking your food to adapt any latest trends or any seasonal festivities.
5. Real-time Data Analytics for your Business
Tracking data is extremely essential for all business and hence restaurant business is not an exception. Having a digital restaurant menu will help you to automatically track which dishes were popular for the week, and even help you track the exact time when the said dishes were sold the most.
Having such data in hand, you can easily forecast for such future demands, to ensure that your kitchen never runs of stock during the estimated time period and hence preventing your restaurant from losing valuable business. This will not only help you to order just what is needed, that too in the correct amount and correspondingly reducing the kitchen waste generation and the input cost involved in purchasing the raw materials.
6. Remote Control
If you have a chain restaurant or having several franchisee outlets, and if you are unable to physically be present at your restaurant it is highly recommended that you have a digital restaurant menu which is integrated with your restaurant POS. Maintaining consistency is highly important whenever you are running a chain restaurant or a franchise. And many of the time it is seen that a franchise might just start selling items other than the prescribes items since the owner is not physically present in the outlet. In order to protect yourself from any such situations, you must have a digital restaurant menu since you can remotely check on the items sold. Moreso, since it is integrated with your restaurant POS, none of your restaurant chain outlets can sell items behind your back other than the ones which are priorly fixed.
Upselling is an art that not everyone is able to master. While upselling is a very integral part that helps your restaurant to garner that extra bucks, training your staff in effective ways can be tiresome. Don’t worry! Digital restaurant menu can come to your rescue very effectively. These digital screens display complimentary items, once you have these restaurant digital menu integrated with your POS. Compared to the static images in your traditional menu, the HD screens gives your viewers a much better and cleaner look. Burger King, in 2010 deployed digital menu boards across London and Birmingham locations, resulting in a 64% rise in sales in just 12 months.
With the massive technological development and its sprawling impact on the restaurant industry, if you stick to the traditional static menu boards, you will be losing out on a lot of potential customers to your competitors. In order to streamline your entire operations, it is highly recommended for you to make that quick shift to the digital menu boards.
Running a restaurant is no cake walk. It is a hectic task requiring full day’s attention and even after a restaurant shuts down, the restaurateur’s work is never done. They must compile data, look at sales, count profits and what not. While efficient managers and employees help ease the workload even they cannot be relied upon completely. In such a scenario where managing one single restaurant is such a huge task, running multiple outlets seems like a distant dream. That is where the need of a smart restaurant management system comes into the picture.
The Need for a Restaurant Management System in Running a Restaurant Chain
The biggest problem that restaurateurs face while running multiple outlets and restaurant franchises, is having no control over the operations. One has to rely on the reports sent by the restaurant manager of each outlet about the business. This is a manual process that is time-consuming and also has the scope for errors and misappropriations. A cloud-based restaurant management system provides the real-time data and reports of all the outlets that you can view any time, right from your mobile.
Restaurant Management System Features that Help You Run Multiple Outlets
A cloud-based restaurant management system gives the owner complete control over the operations of the restaurant. You can control everything starting from inventory to customer satisfaction from anywhere and from any device, even his mobile. Below are a few ways in which a restaurant management system or a comprehensive restaurant POS helps in managing multiple outlets of a restaurant seamlessly.
1. Real-time Reporting & Analytics
While managing different outlets it is not possible for the owner to be physically present at each one of them all the time. This leaves a lot of room for a lot of scope for misappropriations and internal theft. Features in the restaurant management systems solve this problem by giving the owner real-time updates of what is happening in his multiple branches. This way it is very easy for him to keep track of all that is being done.
Restaurant management apps give you remote agency over each outlet so that as the owner you can manage any outlet from anywhere in the world.
(i) Live Outlet Count
Restaurant management systems allow you to keep track of all functions and operations happening at all your outlets. Since multiple outlets mean that owner cannot physically be present at all of them live outlet count enables him to digitally know which of his outlets are open and currently serving customers.
(ii) Total Bill Count
An intelligent restaurant management system such as POSist has the total bill count feature which enables you to keep track of the total number of bills generated. Besides showing total billing details it even gives itemised individual billing details of each outlet.
(iii) Items Sold Count
The system also lets you see the count of the number of items sold across all outlets as well as items sold in each outlet every day. This not only helps reduce counter thefts but also allows you to understand which dishes are being ordered more frequently and which dishes are not performing well enough so you can change inventory or menu.
(iv) Track Discounts
Different discounts may be offered on different food items at different days and different times of a day at different outlets. This makes it hard to keep track of discounts that have been offered and can thus lead to an opportunity of internal theft by the restaurant staff who can pocket the money by saying that it was a discount that was offered. Restaurant Management systems help you by keeping track of discounts that have been offered and even telling the amount worth of total discounts.
(v) Sales Details
It is important to review the daily and monthly sales happening at each of your outlets. Use the restaurant management system’s live sales details of each outlet in your mobile. This will give you not only net sales and gross sales of each outlet and total but also the amount spent by each customer in individual outlets.
2. Stock & Inventory Management
When you are running multiple outlets, keeping a track of the stock consumed at each outlet can become tedious. An integrated restaurant management system gives you detailed reports of the daily stock consumption of each outlet. If you have a Central Kitchen, you can manage the circulation of stock with ease based on the stock requirement of each outlet.
It also allows you to set re-order levels for raw materials so that you can order for the particular item before it goes out of stock. You can create Purchase Orders right in the restaurant management system. An automatic email is sent to the vendors as soon as the Purchase Order is raised and remains open until all the items are received at the outlet. This way, you can monitor the status of the stock items purchased and received without having to even visit each outlet.
3. Recipe Management
The biggest issue with multiple chain restaurants is maintaining consistency in taste, quality, and quantity. This can be easily achieved through the Recipe Management feature in the restaurant management system. It allows you to set a standard recipe for each item which is followed at all the outlets that ensures that the prepared dish turns out the same each time, even when different chefs are making it. In case you need to make some changes in the item, the recipe can be updated centrally across all the outlets.
4. Vendor Management
A restaurant has varied stock requirements which means that you have to deal with multiple vendors and suppliers. As the number of outlets increase, managing a large number of vendors becomes a humungous task. Vendor Management is an essential feature of the restaurant management system that allows you to create and manage vendor profiles of different outlets at a central level. You can add the contract details of various vendors and even these vendors can log in, read, edit and add comments to the purchase order.
5. Central Menu Management
When you are running multiple outlets of the same brand, introducing a change in the menu becomes a harrowing task since your IT guy has to manually update the menu in the POS at each outlet. It is still achievable if you are running 4-5 outlets. But imagine the time and effort required in updating the menu across all the outlets if you are running a chain of 50 restaurants spread across the country. A cloud-based restaurant management system solves this problem easily. All the changes made in the central POS Menu is reflected instantly across all, or whichever outlet you want to them be updated to.
This saves time and eliminates the scope of any errors!
6. Central CRM
A cloud restaurant management system comes equipped with a central CRM and has now become the need of the hour. For one, it allows you to have one central customer database. This means, that once a customer’s details are stored in the CRM, their contact details and ordering history is automatically visible to the other outlets as well. Based on this information, your staff can upsell items even if the customer has visited that particular outlet for the first time. Secondly, it works very well in running Loyalty Programs and Reward Points that can be utilised by the customer if they are visiting a different branch location.
7. Outlet Specific Discounts & Offers
Most large chain restaurateurs struggle when it comes to marketing in different geographies. A marketing campaign that works in one city may not work in another. Running outlet level offers and discounts also become a tedious task and these campaigns should be specifically designed to target the audience of the particular region. A restaurant management system allows you to create custom campaigns for different outlets. If you see the sales declining of a particular outlet, you can run specific offers and discounts or invest more in marketing for that restaurant.
In the new era of technological developments embrace restaurant management systems and run that dream chain of restaurants easily and successfully!
As a restaurateur you must have asked yourself more than once, what am I doing wrong? What needs to be updated in the restaurant to make sure the sales keep getting higher? While a number of answers may come to your mind ranging from seating, interiors, food and service, one of the most important elements of a restaurant is often ignored- the Restaurant Menu. Here are some of the most common mistakes that restaurateurs make while designing the menu. Read them to ensure that you don’t commit any of those blunders!
A restaurant menu has a huge impact on the customer psychology and can single-handedly improve your restaurant’s overall performance.
When Should You Change Your Restaurant Menu Design
Your restaurant reports even if not just focused on your menu design can disclose a lot regarding it. If people are ordering the most basic dishes in every section, it means that they are defaulting to these dishes which is only possible if menu design is not properly planned. If one specific item works well but others are not doing well even after being tasty it is probably because customers cannot locate it on the menu or is being shadowed by some other item.
The most effective way to phish out the problem area is analysing your POS Reports, giving reason to every abnormality and if something comes back to your menu design too often then finding the problem area and fixing specifically that.
Here are 7 signs according to which you need to redesign your restaurant menu.
1. Gradual Dip in Sales
You may have been a hit when you started but if your sales have seen a decline beyond your computed value for no explainable physical reason, it may be because of your menu design. If your restaurant menu does not guide people to the correct items that they must order, their experience will be compromised and by and by your customer base would either fade away or default to the most basic items that do not lead to enough sales.
2. Low Profits
Even if the sales are pretty high at your restaurant, and you are still not making a decent profit, it is time to review your reports. This time, however, look at the sales reports of the high-profit items. Chances are, the menu items that have a high-profit margin are not being sold enough. It means that the menu design has not been well thought of in terms of placing the items. Neither the soft-spots in your menu nor your decoys or highlights have been effectively used. All this makes visual aid through pictures or graphics (if present in a menu) redundant.
This is a tell-tale sign that you should repurpose your restaurant menu design. It is especially true when your restaurant is always full but still fails to generate enough revenue.
3. Unpopularity of Some Items
Contrary to the point mentioned above a sign that you need to change your menu design is also linked to the popularity of some specific items. While you may think there is no harm in having certain items in the menu that are not sold enough, over time it can potentially damage the business. For one, if certain menu items are not ordered, their ingredients may expire and you’d have to re-stock the ingredients only to have them wasted again. Also, you’d be losing out on the sale that a different menu item could be bringing in. You should always be on the lookout for new food trends and introduce innovations in your menu to attract customers.
If some items of your menu are unpopular to the limit that they are not ordered at all, you need to do some serious thinking about the way you have engineered your menu.
4. Poor Customer Feedback
Even if you have scrutinised your reports carefully, you still may not reach the conclusion why certain menu items are not selling enough. To gain this understanding, you should take your customers’ feedback. The best way to do this is through a digital feedback form that asks specific questions about the dishes that have been ordered by the customer. For instance, someone who ordered a pizza is prompted to review the pizza. The digitised feedback form documents the response, and over a period of time, if you get consistent poor ratings of the particular item, you can either look into the preparation method or consider taking it off the menu completely.
If you are confident regarding your dish placing on the menu and even regarding the price, the indicator you can look for is customer initiative. A lack of customer initiative in ordering or trying new dishes off your menu means that the menu design is not sparking the correct emotions, the colours are off, or the menu design is not matching the motif of the restaurant. Imagine a fine dining scenario where restaurant majorly earns through lingering customers. Now, what would happen if that restaurant designed its menu like McDonald’s? The emotion instigated by the menu would not match the theme and vibe of the restaurant and the customers would not order accordingly. If the colours on our menu are too straining for the eyes, the customers will not break out of their comfort zone. Ultimately customer initiative is the key to a successful restaurant and if your customers lack initiative you need to re-do your menu.
6. Wait-Staff Having to Play Interpreter
Your wait staff is what holds your restaurant’s performance together. If they are not as efficient because they have been spending more time at customer tables solving their orders, they are basically doing the menu’s job and this situation is nothing less than a time bomb waiting to explode. If your customers cannot decide what to order from the menu itself it means that the menu is not explanatory enough. It could be due to the fact that your menu lacks basic food descriptions, it is carelessly set and is chaotic and crumpled in the very least. A vast and complicated menu can also be a turnoff for customers making them choose the least priced items, or constantly asking the wait staff for recommendations.
7. High Food Costs
If your food costs are alarmingly high then it is time that you consider changing your restaurant menu. It is not just the high input cost that leads to escalating food costs. If a lot of food wastage is happening at your restaurant then you should cut down or replace certain items in your menu. It is always better to have menu items that have common ingredients that can be sourced locally and easily. Also, if the food cost is still high and the item is not selling that much, it is better to either change the placement of the item in the menu or remove it completely.
The purpose of a menu is to make sure that your customers can decide what they want and guiding them to the best dishes that you have got. If your menu is failing at this, these are the sure signs that you will most likely see. Our suggestion is, if 5 out of these 7 signs are a regular feature in your restaurant, it is time that you up your menu game!
The Food & Beverage Industry is growing by the day and new restaurants are cropping up daily. In this haphazard scenario, every new restaurant owner needs restaurant advertising ideas especially suitable for a new venture. Sadly most of the time, internet betrays us here and the result is you having to sift through multiple sources in order to pick ideas that suit your restaurant. Now omit that struggle because we have compiled for you a list of restaurant advertising ideas handpicked and straight-jacketed for a new restaurant.
Creative Restaurant Advertising Ideas for a New Outlet
Before you venture into the marketing of your restaurant, you must consider that a new restaurant requires different market strategies than an already established business. A new restaurant has to put more efforts to reach out to the customers and create a brand image in the market. You also need to devise a marketing plan that would give your restaurant a leverage over the
Here are 15 restaurant advertising ideas that you as the owner of a brand new restaurant can do to advertise your restaurant and create a brand identity out of it.
1. Facebook Marketing- Campaigns, Events and Geo-Targeted Ads
Facebook is a great platform for running advertisements, creating events and starting campaigns that can help you engage with a number of audiences. Use this for announcements of events, new recipes and even for pictures and videos off your restaurant. Facebook also allows you to Geo-Target your ads which means that only people who would look at your restaurant ad would be the locals of your city so you would not have any useless clicks which would save you a lot of cash.
Snapchat marketing is a relatively new trend but that is no reason why it is not a good advertising tool. There are numerous things you can do to advertise your restaurant on Snapchat. You could create a geofilter i.e a Snapchat lens that shows up only when people are near a given distance of your restaurant. This lens could have your restaurant logo and it can be made for as cheaply as 20 dollars.
Apart from this, you could send coupons through disappearing messages that people can screenshot and use if they like or simply let be if they do not. You can even advertise your restaurant and create a buzz by uploading sneak-peeks or behind the scenes as your story. All this will get your customers interested in your restaurant by making them feel closer to it.
If you are hosting an event in your restaurant, you can advertise both the restaurant and event by ‘Our Story’ feature. The Our Story by Snapchat basically shows different sides of the same event through different people’s story which is called our story. It is visible on snap maps so your restaurant and event will be discoverable and if enough people upload your story, you can make it to the discover section of Snapchat. All these methods apart from the geofilter are totally free!
3. Instagram Marketing- Photos and Videos
Instagram is another platform where a new restaurant can market itself well. Put up mouth-watering photos and videos of the food you prepare, make videos with your staff, capture behind the scenes moments and put it all up. With the story feature, Instagram is no longer a formal app and has itself a raw angle much like Snapchat. Use that to advertise not just your food but your restaurant, it’s vibe and environment in general. Ensure that you use the right hashtags to reach out to a wider audience.
Having an online presence is not just restricted to social media. Having a website is a great way to promote your new restaurant online. Ensure that you take care of the SEO part so that your website ranks on the first page of Google or similar search engines for queries related to your restaurant. Also, ensure that you target the area specific keywords. For instance, if you serve Italian food, your restaurant should rank on Google when someone searches for white sauce pasta in your area.
5. Start a Blog
It may seem odd to you to start a blog for restaurant advertising but trust us when we say this, it works! Advertising is nothing more than creating familiarity with your target audience and there is no better way to do that than a blog. You could put up different events, your experiences, some recipe you have been trying and what not. The blog can be a personal or professional as you wish it to be. If people like it they are sure to remember your brand and eat at your restaurant as much as possible!
6. Email and SMS Marketing
As old school as it sounds but email and SMS marketing still work as long as you are not sending out spams. A couple of messages per month announcing new deals or giving discounts is never minded by anyone and what is more, it gives people an incentive to check you out!
Also, emails do not only have to be restricted to just sending out promotions. It is a great idea to have a weekly or monthly newsletter that talks about your culture, showcases your staff and the events happening at your restaurant.
7. Leverage Online Food Aggregators
Even if you do sign up on online ordering platforms such as Swiggy, Zomato etc, chances are your restaurant would end up getting lost in the sea of other restaurants listed there. Use the special promotions that these online food aggregators have to give better visibility to your restaurant.
8. Engage with Food Bloggers and Host Tasting Events
Engaging with micro-influencers is a great restaurant advertising strategy, especially for new restaurants. It not only in a sense announces your arrival on the block but also gives you a good amount of potential customers thanks to the reach of the blogger. Because the word of the blogger is also taken as a guarantee it will in a sense validate your food for a huge audience and make them want to try it. Bloggers in a sense give your restaurant a personality and an identity both of which is crucial for a new restaurant.
Before going for an all-out hard launch, do a soft launch of your restaurant to create some buzz. A soft launch will not only enable you to test your food and prepare for the proper launch party, it will also create the initial buzz needed. By only keeping your restaurant open for a select few or invited guests only you will in a sense not only announce your arrival but also create a talk regarding your restaurant. The people would what to know what it is like and so you can expect a good rush once you finally open.
Offline promotion of your new restaurant will include distributing posters and flyers, designing pamphlets. Distribute your flyers and pamphlets in places where your target audience usually frequents and is considerably close to your restaurant. You could just employ a couple of boys to distribute these flyers and pay them accordingly.
Participating in food festivals and events such as the Grub Fest is a great way to reach out to a new audience. You can also partner with the local college festivals if college kids are a part of your target audience. This will help you reach out to your potential customers while establishing a brand identity for you simultaneously.
For a restaurant, nothing works as magically as local advertisements. There is no use for people from different states to know about your restaurant through anything apart from word of mouth, so all your ads must be targeted to your city. Advertising your new restaurant through a radio-mention or an add in a local newspaper will get you a lot more audience than advertising in a national newspaper or TV and be much less expensive.
13. Release and Distribute Tasters or Merchandise
As a new restaurant, you can also advertise yourself by giving out free tasters of your food at various events with footfall matching your target audience. If people like your food they would definitely come to visit the restaurant. A new restaurant can also advertise itself by creating its own line of merchandise. You can have cups, trays or coffee jars with your logo or your brand identifier. You can shake the merchandise up depending on what you sell. A great merchandise id a phone cover with a platter of your signature dish and a humorous quote on it along with your logo. That is sure to catch eyeballs.
14. Introduce Happy Hours or Fish Bowl Discounts
You could also advertise your restaurant in a slightly quirky way by introducing happy hours or once a month fish ball draws. Happy hours will not just attract customers, they will fill up your empty tables during slow hours. As for fishbowl discounts you can ask your customers after a certain number of visits or on ordering food above a bare minimum to drop a visiting card in a fishbowl. Once the bowl is full you can create a lucky draw event out and offer a grand prize to the winner. This is more of a PR strategy but works well as one of the most effective restaurant advertising ideas.
15. Introduce Referral Programs
The biggest challenge for a new restaurant is attracting new customers. For this, you can start a referral program for customers. Have a specific coupon code so that when a customer introduces a friend to your restaurant, they can show the coupon code and get a discount. You can offer a discount to the customer referring their friend so that they also have an incentive to introduce new people to your restaurant.
For a new restaurant, advertising is one of the trickiest skills to master but trust us when we say that it is just as fun. Go on and try this list of restaurant advertising ideas we have compiled for you to reap the most benefit.
Managing your restaurant finances is one of the basic and an extremely important prerequisite that will keep your restaurant off the bay from any financial mishappenings. Keeping a count of your restaurant cash flow at each accounting period is crucial for letting the business stay afloat and running it seamlessly. Standing capital is essential for any restaurant especially to; pay bills, buy equipment, pay the staff, buy the raw materials and handle all the other costs necessary to keep the tables filled with customers.
In this article, we will talk about how to calculate your restaurant cash flow and manage it the right way.
How to Calculate Your Restaurant Cash Flow
Calculating your restaurant cash flow is rather simple. Generally, your total cash flow for a period equals your cash inflows minus your cash outflows, in simple words total cash proceeds minus total cash payments.
1. Cash Inflows
Cash inflows in a restaurant essentially mean the money obtained from selling assets and amount received from financing sources. For example, the cash received from food, beverage and merchandise sales, from catering a party, from disposing of a refrigerator and from a small-business loan. You can easily calculate your total cash inflows by adding each of these items.
2. Cash Outflows
The cash outflows consist of the cash spent on the restaurant operations. This includes money used to buy assets and the amount paid to finance sources, such as dividends distributed to investors. Expenses necessary to keep your lights on and doors open can be termed to be the operating costs. Hence, operating cost includes the cost of food and beverage ingredients, wages, rent, utilities, and insurance. Add these cash disbursements together to figure your total cash outflows.
How To Deal with Restaurant Cash Flow Problems
There are definitely certain ways by which you can maintain a healthy balance between the cash inflow and cash outflow, that will help you to have a fixed standing capital that you can use in times of crisis. Some of the smart ways by which you can manage your cash flow are:
1. Decrease Your Operational Expense
Your operational cost is essentially the input cost that helps you to run your restaurant seamlessly. The top ways by which you can try and decrease your operational expenses are-
(i) Review Your Menu Items
Once you have decided on your preferred mix of dishes hit on a strong mix of dishes, one generally finds it easier to serve the same dishes. Try collecting data on your sales for the past several months or, over the past year and compare the sales for each dish. There are high chances, you will find at least one underperforming dish that can be easily scrapped.
Since the dishes are underselling, chances are your customers probably will not even notice the dish has been removed. Such an action will help you to free up some cash by removing unnecessary inventory items and replace them with something new that you want your customers to relish.
(ii) Have a Recipe Management System
Most of the restaurants incur a lot of expenses due to the generation of kitchen waste. Low knowledge of the potion control techniques, and overuse of certain ingredients not only has the potential of creating a dish that does not attract the customers but also the possibility of generating unwanted kitchen waste. This makes it imperative that you have a proper recipe management system in your restaurant. Here, the detailed recipe of each item on the menu must be mentioned, along with the ingredients and its amounts that must be used, the cooking process and the time of the dishes. This will be like a guide that your kitchen staff must diligently follow. This will both help you in maintaining consistency in your dishes and will ensure that you don’t waste the majority of your inventory items in the generation of kitchen waste.
(iii) Replace the Least Used Ingredients
While evaluating your menu, carefully review the ingredients in each dish. Are there any that are used only once or twice? If you do come across similar instances, consider replacing them with more frequently used ingredients. The underused ingredients could also be replaced with more expensive ones that are used in other dishes. This will not only cut down your operational costs but also make ordering inventory simpler and reduce the generation of kitchen waste.
With the ultimate intention of cutting down your restaurant cost, you must never opt for low-quality ingredients. While your customers might not notice you scrapping an underperforming dish, they will definitely notice the change in the quality of your dishes.
As the food prices fluctuate your profit margins could narrow, potentially in amounts so small you may not even notice. However, with the passage of time, one can notice, that the profit margin might get so marginal that it may make it difficult for you to have a proper standing capital.
Calculate the Cost you Incur Behind Each Dish
Knowing how much you invest in preparing a dish is essentially important since you must price your menu items higher than your input cost. This will help you to garner a marginal profit and not run into a loss. You just need to follow 5 simple steps to calculate your food cost, and they are:
Make a list of all ingredients used in the recipe and state what the weight and measurement of each ingredient used.
You need to look for the total price of each item, not taking into consideration about the prices of the exact amount of the ingredients that goes into the dish.
Divide the weight/ measurement of each ingredient used in the recipe by the weight of the unit it is sold in and multiply it by the price of the unit as a whole. This will determine the cost of each ingredient used in a particular dish.
Once you have the individual amount of each ingredient that goes into making a dish, you can easily add all these amounts. This step will help you determine the cost of the entire recipe.
Divide the cost of the entire recipe by the number of portions that it serves. This will determine the cost of each serving.
Moderation is the trick to evaluating and adjusting your menu. Instead of going about and changing your entire menu, choose one or two items to change every quarter.
Adjust the prices for your most popular items first. Because these dishes are so frequently ordered, even the small profits garnered from these dishes will pile up and will help you to make a substantial amount of profit and maintain your restaurant cash flow.
3. Have a Cash Flow Forecast Sheet
Planning in advance and forecasting your restaurant cash flow is extremely necessary in the volatile domain of restaurant industry. A comprehensive planning will help you to prioritize your goals, accordingly weigh and evaluate your needs, and fix a budget for the same well in advance. Maintain your weekly and monthly cash flows, both in and out and based on this report you can forecast the cash inflow for the future.
Once you have set your targets on what you want to achieve, you need to find the most suitable time to go ahead with your actions. One of the easiest ways to find the most appropriate time is by evaluating the average sales season to season, in order to identify the ideal times to pay for starting the projects. One thing you must always keep in mind is to make large-scale changes before your busiest months, for example, if you are bringing in some changes in the menu, make sure you do that before your busiest months begin, to ensure that you have a trial period to keep a check if that changes you brought forth are performing as expected.
Planning in advance will help you to keep that end goal in mind when considering other purchases, managing your budget, and making pricing decisions. Once you have your budget in hand, you can plan on your other purchases accordingly. This way, you’ll be able to make adjustments to your restaurant cash flow as needed throughout the year.
Regardless of what purchases you’ll be making and when, be sure to always keep a cushion of money ready in case of emergencies. After all, in this business, you never know what fires you’ll have to put out next!
Mumbai State Government put a ban on production and use of all single-use disposable plastics on June 23rd, 2018. In another blow to the restaurant industry, restaurants in Mumbai are facing huge losses as the ban extends this time not simply to polythene packets but even disposables, cutlery, gloves and packaging material. All this has made takeaways and home deliveries an impossibility while also hindering kitchen operations for most restaurants. To know the detailed impact of the plastic ban in Mumbai on the restaurant space, read on.
How the Plastic Ban in Mumbai Has Affected Restaurants
As the plastic ban in Mumbai on single-use disposables plastic reaches its crescendo, restaurateurs make for the worst hit businessmen after meat and vegetable sellers. Mumbai high Court banned all single-use plastic in the state in the past week but in absence of any government-approved alternatives, business in the restaurant space continues to suffer.
More than half of a number of restaurants’ earnings are from takeaways and home deliveries but in the absence of plastic containers or even plastic packets, making food deliveries has become extremely difficult.
Some restaurants in this turn of events are asking the customers to come with their own containers for gravy items and liquids.
Dev Kamadh of Madras Cafe told Times of India that in the absence of delivery options, they are asking customers to come with their own containers to carry sambhar.
Food integrators like Zomato and Swiggy have asked various outlets to mark gravy items as ‘Out of Stock’ or ‘Outlet Shut’ in order to avoid sour customer experience. According to Ahar, restaurateurs have lost 20% of their business on an average because of non-delivery of liquids.
But it is not just takeaways and deliveries that are suffering; most kitchen employees wear plastic gloves while preparing food. Plastic gloves in restaurants dealing with fast food is a mandatory hygiene requirement. With the ban on plastic, a ban is extended to all these necessary plastic products which have put restaurateurs in a fix. There seems to be no way out as only dry food goes out for deliveries if it can be prepared that is.
Even within the restaurant space, the worst hit are smaller chains, dhabas and QSRs. Neither small chains nor dhabas can readily accommodate the cost of newer alternatives which are projected to be higher than plastics and will ultimately decrease profit margins. QSR’s, on the other hand, strive on takeaways and with that medium shut, are in for bigger losses in terms of opportunity cost.
Fine Imposed for Violating the Plastic Ban in Mumbai
The fine structure for the ban does not allow for any scope of negotiation. A first-time offender must pay a fine of Rs 5000, a second-time offender will be charged with a fine of Rs 10,000 and a third-time offender can face a fine of Rs 25,000 and up to three months in prison. Caught in a fix of law and order, restaurants in Mumbai have no choice but to stay shut or lose business till alternatives better than foil and cardboard can be procured. Some restaurants have even given their delivery boys steel containers for deliveries but all these steps can only go so far. Restaurateurs are expecting a new stock of Green Bags to hit the market but these containers will increase the price per delivery by at least Rs 20. While Green Bags are expected to cost approximately Rs 10, the paper containers would be for Rs 4 to Rs 7
As solutions are being looked into, restaurateurs have no choice but to wait. One thing is certain, the business lost coupled with an expected increase in delivery costs of the restaurants is another bad news for the industry that is already grappling with the existing government regulations and safety concerns.
With a happy and a well-motivated restaurant staff, you can take your restaurant business to the peak of its success. A contented restaurant staff will deliver stellar restaurant customer service which will help you in retaining customers to a great extent. However, you must realize that you simply cannot foster loyalty in your team, unless you make them feel valued. Giving a restaurant staff incentive is thus a great way to make your employees feel appreciated.
How to Provide Restaurant Staff Incentives
Incentives will help you to build a band of loyal restaurant staff. It will make them feel needed and important and in turn, they will deliver optimum service that will help your restaurant blossom. It will definitely be a motivating factor for which they will work. They themselves will have a target to achieve, and this will help them to work as a team with greater vigour. In addition to this, incentive programs will help in increasing loyalty of the employees towards your restaurant, coupled with this, it will help in reducing employee turnover and absent rates. Reduced turnover rates will automatically help restaurants to save up a lot of money which they would have otherwise incurred from the repeated recruitment process.
Just like there are multiple ways through which you can evaluate your staff performance, there are several ways by which you can provide lucrative incentives to your restaurant staff. Some of the criterion on the basis of which the restaurant staff incentive can be provided are-
It is not unlikely that you will come across some restaurant employees who are of the habit of taking day offs, rather more frequently than usual. Knowing that when a restaurant is short on staff there are high chances that the service provided will not be at an optimum level. Since, afterscheduling the employees, if a staff doesn’t appear or comes in late, it might put greater pressure on your other staff and this will affect their service. To deter any such circumstances it is highly recommended that restaurant owners introduce the concept of incentives based on attendance. Calculate your staff performance in every quarter, and offer a cash reward for the employees who have one or no call-ins or absences. When your staff knows that failing to show up will result in a loss of their bonus, it will help motivate them to come in and be regular.
2. Based on Performance
Monitor your staff performance quite keenly and offer them bonuses and hikes based on their performance. With the help of a robust restaurant management software, you will be able to gauge the performance of each and every staff of yours. It will help you to receive the detailed report of the number of tables covered, the total worth of the items sold, and the amount of discount conferred. This has two-fold advantages, if you find that one employee is performing exceptionally well you can boost them further with incentives, on the other hand, you can arrange training sessions for the ones who aren’t performing that well.
Restaurant Staff Incentive Ideas
Once you have made up your mind on the ways to monitor your staff performance, you need to find effective ways of providing your employees with incentives. Here are 5 restaurant staff incentive ideas that are certainly going to prove effective in keeping your employees happy and also reduce the employee turnover.
1. Award Individual Bonuses
It is needless to mention that a bonus can be a motivating factor for all, be it a chef or a server. Monitor their performance and check who is putting in that extra effort to deliver a splendid customer experience, and offer bonus or rewards when you deem fit. The surprise rewards tend to inspire the staff and motivate them to maintain the high standard of their performance.
Choose an employee who performed exceptionally for a month and honor him with an employee of the month award. Highlighting the employee of the month you can also make a great social media post! Such actions will boost your other employees to give their best as well, and in turn, will help you to run your restaurant better with the services provided by them.
Every time a server is able to sell an item of high-profit-margin or an item which is overstocked in the inventory you can acknowledge their efforts with a gift coupon and vouchers. Surprising your staff with lucrative and interesting gift certificates and vouchers like a free hotel stay, a day at the spa, ticket vouchers of the movie theater will always make your servers happy.
You can use the concept of online reviews to further encourage your employees to work better and reduce the employee turnover rate of your restaurant. Provide each of your restaurant servers with a business card. The card should say something like “My name is ______ I hope you enjoyed your experience today. Give us a review on _________(website details) and mention my name.” At the end of a month or at the end of a quarter the employee with the most positive reviews wins the reward. You can rather easily turn the online review challenge into an enticing opportunity for your team members to shine.
2. Introduce Team Bonuses
As a restaurant owner, you can pair a member of the back of the house with a member of the front of the house. Whichever pair performs incredibly gets the award. For example, being on time 3 days in a row= + 5 points, perfect side work for one week= +10 points, forgetting to clock out = -3 points. And the pair that has the highest number of points at the end of the estimated time period is provided with a bonus or a gift card. Such a group effort will ensure that even if an employee is lousy, he will have to put in that extra effort for his team member.
3. Offer ESOPS
It is human nature that one feels more committed to the work they are doing if they have a sense of belonging as well as ownership of that job. Offering ESOPS is thus becoming a popular restaurant staff incentive method of rewarding employees as well making them more committed to the organisation. ESOP or Employee Stock Ownership Plan is an employee benefit that gives employees an ownership or stakes in the company.
When an employee holds a share in a company they are no longer just employees; they are your partners. So they happen to stay longer. -Rahul Singh, Founder of The Beer Cafe
As per the Indian law of ESOP (which is a defined law), you can’t equate the shares within a year. They are locked built in; the Locking Period is three years. This results in employees saying they have a great salary, they love their job and would stick to the company. Later, when the company gets listed, their shares go up (sic).
4. Give a Longevity Bonus
It is always good to reward the employees who have stayed loyal to your restaurant through the thick and think. For this, you can provide your staff with a longevity bonus once they complete a particular duration at your restaurant. The longevity bonus can be awarded semi-annually or annually. This will help you reduce the staff attrition at your restaurant significantly.
5. Reward Your Staff with their Preferred Section or Shift
The restaurant staff incentive doesn’t always have to be monetary. It can be very well providing them with something that is coveted by them. For instance, mostly all restaurants have certain sections, tables, events or a busy shift for which the staff competes. If you happen to see some of your staff is performing exceptionally well you can offer them their desired section or assign them to big parties who are likely to tip well. Since having a preferred location would help a server deliver his work better, similarly giving the occasional shift choice, as long as it makes sense for your business, will be a coveted prize that your employees will strive for.
Having a happy, well performing, the multi-faceted workforce can only happen if you as a restaurant owner treat them well and appreciate their performance at every level. Rewarding them with a periodical restaurant staff incentive is a very effective way to keep your employees always on the mark since they will have something to look forward to.