The Restaurant Expert is a coaching and teaching company for independent restaurant owners, offering several tools that will find the hidden profits in your restaurant. To teach independent restaurant owners how to operate with systems to help them make more money and live a balanced life, and to bring them together to share ideas, challenges and successes in a safe, friendly environment.
Are you looking for that recipe for success for how to run a restaurant? Here are the top 3 tips for not only how to run a restaurant, but how to run a profitable and fun restaurant.
Restaurant Management Tip - Top 3 Tips for Running a Restaurant #restaurantsystems - YouTube
No. 1 Tip for How to Run a Restaurant
You need to have a clear vision. When you opened your restaurant, you had a dream and passion. You went out and executed it. And here you are! But you wouldn’t be in the restaurant business if you didn’t occasionally let the idiots get to you. The idiots are bad customers or flaky employees or greedy food distributors. But they are part of the business, and you can tolerate them if you have your vision and can find your passion. What did you always dream of? What did you want to achieve financially? What does success look like? (Hint: this involves budgets and core values.)
No. 2 Tip for How to Run a Restaurant
You need to lead your team. Your job is to market, budget, coach your team to success. Your job as the restaurant owner is not to flip burgers and run the expo position. Your job is to work ON the business, not IN it. Don’t let your employees tell you how it’s going to go. Lead them! Here is some information on company culture to help.
No. 3 Tip for How to Run a Restaurant
You have to use systems. These allow you to impose your will without being there. You can’t be the one who does it all or you’re a prisoner to your business. Systems for cash controls, inventory, labor, etc. – everything – allow you to lead and follow your vision.
If you would like to learn more about how to run a restaurant with vision, systems and leadership, read our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here.
Have you ever wondered how to set restaurant menu prices? Have you ever heard the “three-time markup” or average recommendations? I go nuts when I hear those kinds of blanket suggestions. You’re not average! How do you know if your market can handle such a markup? Watch this video to learn how to set restaurant menu prices.
Restaurant Management Tip - How to Set Restaurant Menu Prices #restaurantsystems - YouTube
What are averages good for? NOTHING!
You have to set a budget based on your total cost of goods sold plus total labor costs (prime cost) where you’re going to fall. For a specific range of sales – at least $850,000/year – we aim for 55% prime cost.
How you get to 55% prime cost in your restaurant is based on a variety of things and your food cost doesn’t have to be the same as your neighbor’s. You might have a 30% food cost and a 25% labor cost or vice versa. Any combination is fine as long as you’re hitting 55%.
You have to set a budget to where your food cost should be based on your price point, your product quality, your type of restaurant and so on.
One of the things you have to do is get up-to-date recipe costing cards, what you sell the product for along with how many items you sell of everything (reports in your POS system). This will tell you what your food cost should be if you had no waste, no theft, no spoilage — a perfect restaurant, which does not exist. But this gives you the ideal food cost and the extra point or so for your chef. With this information you can measure success.
Now you can price your menu properly based on your mix – some items you sell the heck out of and you can charge more for a low food cost. Some items don’t sell a lot and could have a high food cost or a good cash contribution, but it doesn’t have too much of an impact.
All of these reports and data help you make the decisions. You’re not guessing – you are using data based on your restaurant to figure out how to set restaurant menu prices.
To learn more about how to set restaurant menu prices, read our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here.
Something universal about successful restaurant owners is they never say or accept someone saying to them, “I can’t!” Successful restaurant owners recognize that when someone says, “I can’t,” what they are really saying is, “I won’t.” To get an idea of how powerful this two-word phrase is, picture Superman stopping a train, using all his power, digging his heels into the ground, smoke rising up from his heels. That is what someone who says, “I can’t,” is doing to your restaurant. That person is digging in their heels and stopping your success train.
I see this happen to restaurant owners all the time. A specific example is the restaurant owner who attends one of my workshops and goes home motivated to make changes in the business. Instead of coming back to employees and managers excited for change and a chance at greater success, they are greeted by a chorus of employees and managers telling them they are too busy, their restaurant is different, it’s too much work, etc. Ultimately, I get a phone call from the owner saying, “David, I love your systems, but I CAN’T get my managers to do the work.” OMGoodness! Who signs their paychecks?
Listen to that statement when I change just two words, “David, I love your systems, but I WON’T make my managers do the work.” Isn’t that what the owner is really saying to me? Do those sound like the words of a successful restaurant owner?
I have also been on site in a restaurant and had many teams, managers and chefs look me dead in the eye and say, “It can’t be done that way.” All they really did was look me in the eye and say “No, I am not going to do it, nor am I going to try.”
So, what do you do when you hear that phrase coming out of your mouth, your manager’s mouth or an employee’s mouth?
You ask the person to rephrase their statement and say it back to you using the words “I won’t” instead of “I can’t.” Try it – it’s powerful!
Then you need to explain to that person (or yourself) that you don’t want to hear the words I can’t. In fact, tell them you don’t want to hear why something can’t be done, but how it can be done.
I understand that sometimes the solution the manager comes up with might be too expensive, might take too much time, might change the way things are done, but it’s better to experiment with these options than just digging in your heels and saying, “NO, I won’t do the work!”
Successful restaurant owners are where they are today, no matter how quickly or slowly they got there, because they all decided not to accept the words “I can’t” from themselves or anyone that works for them. They lead the changes in their restaurant and are willing to change an employee into a customer if that employee wants to stop progress, stop change and simply doesn’t want to do the work. While an employee may have done a great job in the past, for the company to move forward, restaurant owners must have people on the team who buy into and embrace the changes being made, even if it is a challenge.
Don’t let the phrase “I can’t” become a success train stopper in your restaurant. Teach everyone to tell you how it can be done, hold people accountable and lead your team. This is how results are achieved.
To learn more about the importance of holding your managers and employees accountable, like successful restaurant owners do it, read our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here.
Let’s start with a basic assumption: consumers read Google reviews when choosing a new restaurant making online review management crucial for your restaurant’s success.
Let’s say a consumer is looking for a restaurant to go to on a Saturday night for a date. He types in “best restaurants for dates.” He sees the reviews that say “dates” and he then decides to pick the one with the highest star rating – in this case, it’s Bavette’s Bar & Boeuf in Chicago.
As a restaurant owner, you should make online review management a priority. You have to monitor your online reviews. It’s important to pay close attention to reviews to build and manage a positive online brand reputation to get customers to your stores. Online reviews are only growing as a key resource for consumers when finding a new business.
5 percent of consumers say reviews are influential when choosing a new restaurant, which means more than half of consumers are looking at reviews when searching for a new place to dine.
6 percent of consumers say they are likely to check online reviews on Google before visiting a business, which makes Google the most popular review site.
14 is the average star rating for a restaurant.
43 percent of restaurant guests say they are likely to write a positive review after a positive experience with a restaurant. This means if you provide a great guest experience, your guests will respond on social media and review sites.
So, you have reviews and a decent star rating. Is that enough? Probably not. Restaurant owners need to make sure they have a steady, consistent flow of new reviews – and make sure mostly positive reviews are coming in.
How do you get more reviews?
To get more reviews, ask happy customers to write reviews.
For Google reviews, for example, send customers an email after their experience with a link that directs them to the right page where they can leave a Google review, so it’s as easy as possible for customers to write a review. Asking customers for reviews via email can be done for any site where you want customers to write reviews.
How do you get better reviews? Listen to your customers.
Online review management provides insight into the customer experience.
When Andy Moore, director of communications at 1950s-style diner Hwy 55 Burgers, Shakes, and Fries, analyzed reviews of the fast-casual franchise locations, he found an issue that he didn’t know about: waitresses were not getting to the tables in a reasonable amount of time after guests first sat down.
“That enabled us to make that a priority in our training and onboarding process,” he said. “We also used the opportunity to remind everyone in a companywide email on the steps to greeting a customer and serving him or her as quickly as we can.”
If you read one section from this article…
Because more than of half of consumers report they use reviews when finding a restaurant, review management should be a priority in your marketing strategy. Review management takes dedication to listening to the customer: ask for reviews and use that insight to improve the customer experience. Show the customer you care. Success will follow.
This article was written by Megan Wenzl, the associate editor at ReviewTrackers, an award-wining customer feedback software that helps businesses transform the customer experience. Megan is a writer who enjoys sharing useful information to help businesses succeed.
Do you have restaurant manager meetings? I’m not talking about the passing-in-the-hall quick conversations, but actual sit-down meetings where you focus on moving the business forward? If you are having sit-down meetings, are they effective?
Let me define what I mean by restaurant manager meetings. It’s a weekly, scheduled time, set aside to review goals, expectations and challenges and then brainstorm solutions. It’s not a five-minute tirade over what didn’t get done at closing the night before.
It is also mandatory.
To begin having effective restaurant manager meetings, follow these seven steps:
Step 1 – Plan
Look at last week’s priorities and goals and audit where they are. Did they get accomplished, did you hit your goals or were there things that happened that delayed results? Take the time to really look at things with a detailed eye.
Meet with your general manager and communicate the goals for the next week. Gather your general manager’s priorities that need to be addressed and added to the list. This is your opportunity to make sure your general manager is on the same page as you. You are also setting the general manager up for success to conduct an effective and efficient managers’ meeting.
Next, create your list of goals for you and your team for the upcoming week. Be specific and clear in the list of what you want done, how you want it done, how well you want it done and more importantly by when. Without deadlines nothing would get done.
SIDE NOTE: Step one applies to every restaurant owner whether you have a partner or not. The only difference is when you have a partner, this step becomes even more important. Too often in independent restaurants, partners don’t communicate. As a result, they send mixed signals to their employees and managers because they ask them to do two completely opposite things or get the same thing done two completely different ways. Or worse, they do this directly in front the employee resulting in an argument/fight between the partners.
Step 2 – Make it mandatory
If you want to ensure attendance, make sure everyone understands the restaurant manager meeting is mandatory. Do your managers a favor and make sure to switch up the days of the mandatory meeting so that the same employee isn’t coming in on his or her day off. Every. Single. Time.
You can still set this up on a regular schedule so everyone can plan to attend the meeting, but rotate the day of the week when you have the meeting.
Step 3 – Create agenda and collect data
Whether it’s you or your general manager who will create the agenda, use your list of goals for the week to create the agenda for the meeting. The agenda should include such things as a start and finish time, and topics to be addressed as well as who is responsible for addressing each topic.
Make sure you have your numbers and appropriate reports, such as your prime cost targets, key item report, waste sheets, marketing materials, etc. Have everything ready so when you hand out the agenda, everyone has everything they need to be successful.
Step 4 – Stay on track
Stick to the agenda. If and when a NEW topic comes up, make sure you determine if it should be tabled until the next meeting or if you need to set up a sidebar meeting after the restaurant manager meeting. Do not add it on the fly. When you don’t control the topics, start and stop time, managers meetings go forever. Your manager meetings should run 60-90 minutes. Anything longer than 90 minutes makes your managers feel like their time isn’t valued and lack of focus creeps in.
Step 5 – Facilitate and communicate
One of the biggest questions I get all the time is, “I’m the owner, shouldn’t I conduct the meeting?” The short answer is NO, unless you fulfill the general manager role as well. Your general manager is supposed to execute the plan. He or she is going to be held accountable for these goals, so you need to put them in a leadership role and demonstrate that the general manager is the other managers’ direct supervisor.
When conducting the restaurant manager meeting, the general manager should only be talking about 20 percent of the time and clear expectations must be laid out. This is because your managers have come to the meetings knowing what they are responsible for because you have assigned them their duties in step three. They will have brought the correct information from cost of goods sold, labor costs, employee issues, project updates, etc. They should present to the group on their areas of responsibility. You want every manager engaged and participating in the meeting.
Step 6 – Assign specific actions
During the restaurant manager meeting, break down the steps for what needs to be done and who is going to be responsible for each step. Assign deadlines and benchmarks because you want to delegate effectively, helping everyone on the team to be successful. This is part of communicating your expectations clearly, helping everyone on the team understand what needs to get done, how you want it done and by when.
Step 7 – Take notes
Assign someone to take notes and then distribute the notes to everyone. This keeps everyone focused on moving forward. No one has an excuse as to why they didn’t get their part done because it was recorded and circulated.
If you’re tired of things not getting done, tired of not making the money your restaurant should be making and/or tired of being frustrated daily with everyone’s performance — owner or manager — then you’ll want to follow these seven simple steps. Just remember it’s not only about being organized, it’s also about being consistent. This comes from conducting the managers meeting weekly.
This way, next week you can measure your results. That which we measure improves!
To learn more about restaurant manager meetings and ways to instill good communication and leadership, read our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here.
If you’re looking for ways to cut labor cost, you’re not alone. Labor is a major area where restaurants can bleed profitability. Why? When the clock goes tick, you owe! For your food costs, if you buy too much food, if it’s not wasted, spoiled or stolen, you can use that food tomorrow. But if you bring in too many people, too early and you’re slow, you can’t tell those employees that the hours they just worked don’t count. This makes it vital to have controls in place to control your labor costs.
Here are the top ways to cut labor cost now to control your labor cost and maximize your profitability:
Schedule less – There’s a myth in the restaurant/hospitality industry that by bringing in more staff, you will give your guests better service. The challenge with this is it’s the complete opposite. You want to give your guests a great dining experience, so you bring more servers in to be the most attentive and offer “WOW” customer service. Or you bring in an additional cook for faster ticket times. But when you have too many people working and not enough work, they tend to talk with each other and end up giving less than great customer service. I suggest when you are staffed to a level where you think you could use one more person on the floor, your guests get the best experience you can deliver because your team doesn’t have extra time to play “grab-ass” and get distracted with each other. They only have time to stay focused on the guest. The result is happy customers, higher sales and lower labor costs.
Schedule based on a sales forecast – There is a way to know what the right number is without relying on your gut feeling. It’s extremely common for restaurants to schedule like they always do even when their sales are lower than expected, or when they are coming out of a “high season.” The challenge is this practice can literally rob you of your profits faster than anything else in your business (well, maybe not as fast as running a Groupon). Changing this practice starts with making your best guess of what you think your Monday–Sunday gross sales are going to be for the whole restaurant by the 20th of the current month for the next month. This enables you to adjust your schedules to take care of the needs of your guests and your business without losing money. Add to this having a labor cost percentage target to shoot for (a labor budget), and you can simply multiply your forecasted sales times your labor cost percentage target to know how much money you can spend on labor next week. Subtract salaried management, and like magic, you know what you can spend on hourly employees to stay on budget and can adjust your schedule to match. This allows you to go into the week on budget vs bringing people in and praying you’re busy enough to pay for them.
Track labor on a daily basis – Yes, I want you to track your labor cost every day. This sounds easier than it really is, but you have the tools you need as long as you have a point-of-sale (POS) system. All you need to do is run a daily report in your POS system each day to see how much you’re paying your employees who worked that day and divide that by your gross sales for that day to know what your labor cost is. Then as each day goes by, just add the labor costs together and the sales together and divide them, continuing to total and divide to get your running labor cost. The hard part about this process is understanding that once you write a schedule on budget, that labor target is different each day. For example, let’s say you are shooting for a total 30 percent labor cost for all hourly employees, before taxes, benefits, insurance, and not including salaried management. Next, you adjust your schedule to be on budget. What you will see after you make the adjustments to your schedule is that your labor cost, based on how you scheduled, may be at 33 percent on Monday, because you had your butt handed to you over the weekend, and now you have a ton of prep to do to be able to handle the next few days of business. And since Monday is your slowest day of the week, the labor budget takes a hit. But you also know that on Friday, your customers are managing your efficiencies, that you’re so busy you couldn’t add another server or cook and that your labor cost will be about 27 percent. Ultimately, if you use the hours and dollars budgeted for that week, you will be on budget after averaging it all out. It ultimately means management will have a different labor target to shoot for every day of the week to stay on budget and hit the labor percentage goal.
When you slim your staff down, schedule based on a budget and track your labor daily, you are putting your management team in a strong position with proven ways to control labor cost and make the business more profitable. You also gain the benefit of happier customers and a management team who controls the business, not the other way around.
To learn more ways to cut labor cost, read our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here.
I want to tell you that restaurant software cuts food cost. If you use a comprehensive restaurant management software, you can cut food cost dramatically. Watch this video to learn five ways software cuts food cost, or skip below to read for yourself.
Restaurant Management Tip - 5 Ways to Cut Food Cost with Restaurant Software #restaurantsystems - YouTube
Spreadsheets are a great step into systems. But once you get going with them and your team is running systems in the restaurant, spreadsheets are too cumbersome to keep up with. They become out of date quickly and take too much time to update.
And this is coming from a spreadsheet geek. I loved making spreadsheets and really mastered the formulas. But as soon as prices changed on inventories, everything was wrong. And as much as I was a spreadsheet geek, I didn’t have hours upon hours to manually update spreadsheets.
That is when I decided software was the answer. What can restaurant industry software do for you in your restaurant to reduce food cost?
Back-office software is very helpful in restaurants. It can help you with:
Recipe costing cards and menu engineering – easily document the processes and procedures and amounts an product, but also know the cost of each recipe. This information is used in the menu mix to find out your ideal food cost is or re-engineer your menu to reduce your food cost 3-7 points the first time.
Software helps you with budgeting. Don’t give your checkbook over to your managers to throw money at a problem, instead make them stop and find the problem. Software provides this path.
If you know your order history and you’ve projected your sales, you can use automatic par levels to tell you exactly how many cases of French fries you need to order to make sure you’re on budget and never run out. This means anyone can place an order, and you’re not dependent on the one person who has been doing it the last couple of years.
Shelf-to-sheet inventory – order your shelves with how you want your inventory counted. This way you have inventory every week in under an hour – not three to four hours like on a spreadsheet. And there isn’t an issue with the volume miscounts. Accurate inventories mean immediate cost of goods sold.
Key item reports and waste sheets ensure you reduce and prevent theft. Find a problem today and fix it today. All of these culminate in what your food cost is, what your budgeted is and what your actual is.
This information – easily made available through restaurant industry software – allows you to make proactive changes in your business.
After you understand how restaurant software cuts food cost, read more about the five systems listed above and why they’re so important for your restaurant. Get your free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here.
What is the restaurant prime cost calculation? What numbers go into the prime cost calculation? Watch this video for an easy breakdown this number, which I call the most important number in your restaurant.
Restaurant Management Tip - Answer to What is the Restaurant Prime Cost Formula #restaurantsystems - YouTube
The one number all restaurants must know to be profitable is their prime cost. The prime cost calculation is made up the total cost of goods sold and labor cost.
So what is the prime cost equation? The prime cost calculation? It’s very simple. It’s total cost of goods sold plus total labor cost (including raw labor, taxes, benefits and insurance). Take that number and divide it by gross sales before discounts are taken out, not including sales tax.
That is the formula for restaurants.
So, you calculate your prime cost. Then what? Well, if your total prime cost is higher than 55% and you make $850,000/year or more in sales, then you have room to trim, which is room for more profits.
How do you get to those additional profits? With systems that control your prime cost.
2. Recipe costing cards
3. Purchasing systems
4. Scheduling systems
It’s one thing to know what your prime cost it – it’s another to learn how to control it.
NOTE: True cost of goods sold can only be calculated when you take inventories to find the value of every product you have on your shelves at least once a month, preferably once a week. This is required because to know your cost of goods sold, you take your beginning inventory and add all of your purchases (even if they were not paid for) to get your total available to sell. Then subtract your ending inventory to find out what product was used in that period, or in other words, left the shelves between those two inventories, whether it was sold, wasted, spoiled or stolen. Product used divided by gross sales gives you your cost of goods sold percentage. Gross sales is defined as the ring at the register before discounts are taken out and not including sales tax (sales tax collected is not a sale).
If you don’t take inventories for value, the way you find our cost of goods sold percentage is to take the past 12 months of purchases and divide them by sales for the same 12 months. While this is not a perfect number, it’s pretty darn close because the difference in starting and ending inventories will not really change that number much.
To learn more about the restaurant prime cost calculation and how to reach it in your restaurant, read our special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here.
What is the best restaurant software solution? Why do you need restaurant management software? How do you choose the best software for your restaurant? Do you need multiple restaurant software tools? Is there a software that works for independent restaurant owners and doesn’t cost chain dollars? So many questions! Watch this video for a comprehensive explanation for the best restaurant software solution that is essential to cutting and controlling costs in your independent restaurant.
Restaurant Management Tip - The Best Restaurant Software and Why You Need It #restaurantsystems - YouTube
I used to live by spreadsheets. I could create spreadsheets for every measurement. But it started to get to a point where I was getting overwhelmed by the number of spreadsheets I had and trying to keep up with the updating of the spreadsheets. Also, it was really hard to keep track of the spreadsheets – Chef saved it on her computer, and I couldn’t get to it. The GM had it on his computer, and I couldn’t get to it.
Worse than having multiple versions on different computers, I had managers manipulating formulas – on accident and on purpose – making it so that I was reviewing bad numbers and didn’t even know it.
It became a nightmare and that’s when software became the obvious solution.
The first software you must have is point of sale system – a POS system. It is the most important piece of equipment you will buy for your restaurant. It is NOT the most expensive cash register you’ll every buy. It also generates extremely important reports and is full of data that you can use to run your business and make more money.
After your POS system, you need back office software. The best restaurant software solution will cover you for scheduling, manager log, ordering, inventory and many other needs. When it comes to selecting the best restaurant management software for you and your restaurant’s needs, you have to ask yourself what do you want to achieve.
There are many restaurant software systems out there that handle restaurant components separately – scheduling for instance. You and your employees can use a scheduling software, but that’s all it’s going to cover. Or what inventory? You could use an inventory software – it might even tie in with your POS system software. But again, all it’s going to handle is counting your inventory. You’re going to be entering data into all different programs, just like when you are using spreadsheets.
Rather than look for individual restaurant management software programs that solve individual challenges, you are better served by a complete restaurant management software program. You need an all-in-one system. If I were you, the best restaurant software solution includes a daily manager log to know exactly what’s happening in the restaurant from sales to employee issues. You also want cash controls and that every penny is making it to the bank. Do you balance? This information contributes to your inventory and food/beverage cost management.
There’s a place in your restaurant where you’re losing thousands of dollars… your back door. Your back door is where you do a very important segment of your business – it’s where you order and receive your product. One simple restaurant ordering and receiving system can save you around $500 per week. In this video, David offers a step-by-step system that will help you stop bleeding cash.
Restaurant Management Tip - Easy Receiving Procedures to Lower Food Cost #restaurantsystems - YouTube
A lot of restaurant waste results from poor receiving procedures. For example, do you look at the bottom of that box of tomatoes to make sure they’re just as fresh as the ones on top? Do you check to make sure the meats you’re putting in our cooler are at the right temp? Do you double check that you’re paying for what you’re getting in terms of weight?
Your distributor is not in business to make sure you’re profitable. They’re concerned with their own profits and count on delivery efficiencies and getting rid of the food they have on hand. Don’t give your distributor the benefit of the doubt and trust that everything is fresh or weighed right. Even if your distributor is the most trustworthy business in the world, everyone makes mistakes.
The goal of following the restaurant ordering and receiving receiving system is to ensure you don’t have restaurant waste and lost money. Protect yourself.
To stop bleeding cash at your back door, when checking in your delivery, follow these steps:
Check invoices for accuracy against your PO (hung at the back door) for each item, quantity and prices. This is your opportunity to make any adjustments to your bill before you pay more than your were quoted.
Weigh products: Have a large scale in your receiving area if you don’t have one… go get one!) and check it routinely for accuracy. Remove products from packaging and/or ice before weighing and compare to the invoice weight. If there are any discrepancies or problems with products that have to be returned, have the driver make note on the invoice or fill out a credit memo immediately, before signing the invoice. Remember that once you sign an invoice, you are responsible for payment as shown on the invoice.
Check temperatures of any refrigerated products to make sure they are not out of the safe zone. The most expensive chicken wings in the world are those you accepted that have already turned.
Check products for quality and condition. For example, you’ll want to open the case of tomatoes and dig down to the bottom. This way you can make sure the bottom of the box wasn’t packed with bad product before you accept them.
Train a few key people on these important receiving procedures, and you can save up to $500 per week on deliveries.
For more systems like this restaurant ordering and receiving system, read our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here.