Restaurant Operations

Restaurant Supply Chain Management

Originally Posted on FoodableTV – By Doug Radkey 04/03/2017

Depending on the size of your restaurant model and the size of your menu, the restaurant supply chain can be simple to some and complicated to others. With raw materials, food safety regulations, delivery logistics, best-before dates, and overall packaging to coincide with your often limited storage capacities, the system can become one that sticks together or untangles on you in the blink of an eye.

When it comes to restaurants, bars, cafes, and food trucks; the producers, manufacturers, delivery drivers, owners, managers, and servers ultimately share the responsibility to create a safe and enjoyable dining experience within your concept.

It is imperative that your food service business understands the supply chain of the product it serves, in addition to having an emergency plan in the case a link of the supply chain “breaks.” This is now more important than ever at the restaurant level, with the farm-to-table and garden-to-glass movement; plus the continuous growth of craft beers, local distilleries, and of course, wineries.

Transparency, traceability, and accountability must be a top concern when deciding on vendors to ensure all products (both food and beverage) entering your restaurant or other food service business, are not only safe for your customers, but for your community.

Consider what a food-borne illness or product recall will do to your image, productivity, margins, and overall bottom line. The challenge with an illness or recall is the unpredictability of when it will happen, but the solution is to be more proactive and understanding at the restaurant level.

Initial Planning

At a more local level, this is more easily managed, whereas at a corporate or chain restaurant level, planning can become much more difficult. The most ideal situation is to deal directly with certified growers, co-ops, or distributors as much as possible who meet a high level of government standards. You need to reduce your risk by eliminating as many third parties as possible. When planning your menu(s), keep them compact and look for ways to re-purpose ingredients as much as possible. This will allow you to list out a limited number of targeted suppliers, including data on their company history, any past recalls, their storage facilities, delivery logistics, and ethical working environment.

Multiple Vendors

Freshness and seasonality play a large part in many restaurants across the nation. Outside of just delivering quality product and rotating menus, it’s important to meet with your above noted vendors, tour their facilities (if possible), and implement a back-up plan. Be proactive by developing a relationship with a primary supplier and secondary supplier for each of your core food and beverage products and ingredients to reduce the risk of not only running out of fresh inventory, but being quickly prepared in the case of a recall from your primary supplier. Lastly, when meeting with them, discuss their traceability program. If they don’t have one, simply move onto the next!

Data and Software

Data continues to define restaurants and food service businesses, and data within the supply chain is no different. Many Point-of-Sale (POS) companies have come to understand the current need for better inventory and supply chain management software, which will better track shipments, local SKUs, and improve vendor communication.

Having transparency throughout the supply chain will not only position you and your concept to make solid business decisions, but it will also help protect you through deeper HACCP compliance and SKU tracking, from the day of ordering the product to the day your customer arrives to eat or drink the product.

Operation Manuals

Basic manuals will always create a sense of accountability — an effective manual will not only identify product specifications and supply chain information for each product, but will also provide solutions to quickly respond to a food safety crisis if one were to happen.

Safely managing food safety is an ongoing process that requires commitment, communication, correct processes, vigilance, and teamwork at a multitude of levels. Ensure your values meet the values of your supplier and that there is a programmed system of communication in the event of a crisis.

In most cases, the paying customer wants high-quality product at the lowest price possible. Rising food costs — and the known importance to keep these costs within a certain percentage of sales — can often lead to a link within the supply chain breaking through poor decision making and quality control.

It should be no surprise, however, that supply chain management is the means to enhancing food and beverage quality and safety, all while reducing and controlling your costs. At the end of the day, the right supply chain can actually be used as one of your best marketing tools and simply cannot become overlooked or cheated on.

Restaurant Start-Up SOS

Originally Posted on FoodableTV – By Doug Radkey 03/15/2017

Outside of preparing for hidden costs and understanding strategies to save time and money during start-up, there are many other factors that can make an aspiring restaurateur scream “SOS” on or before the day one opens their doors.

One word that cannot be stressed enough during this phase is, of course, planning. Sometimes, however, even with a high level of planning in place, things can unfortunately go sideways for some — and they can happen fast.

The good news is that you can try and stay ahead of the most common problems with these five SOS-related problems and solutions!

Property Surprises

Problem Area: One of the most frequent problems that arise is found within your property choice. New restaurateurs often find out after a lease is signed that their property may not be fully compatible for a restaurant and will need further upgrades to meet standards for energy, ventilation, and revised building and/or health codes.

Solution: Have a commercial inspector walk through the property with you before signing your lease, looking at common areas for mold and leaks (water and air), in addition to the most updated building codes and food-service-related health codes needed to operate. Secondly, within your concept development plan, list out your priority pieces of equipment and their specs, including the energy consumption they will use. This step will help you understand if you will need to upgrade electrical panels or gas lines, while not forgetting about your hood system and ventilation needs. Thirdly, if you have immediate neighbors, it’s ideal to understand their concept, operating hours, and the acoustics within the walls separating the units. Will interior noise levels affect either your business or theirs? Make sure this is planned and budgeted for, if upgrades are needed.

Inevitable Delays

Problem Area: Many start-up projects see at least one — or even a variety of — delays with building permits, material suppliers, and/or contractors. These delays will slowly eat away at your cash flow, create a heightened level of stress, and of course, extend your ideal opening day.

Solution: Mentally and physically prepare for it. Learn the average time for building permits to get approved in your area, and then add 1-2 weeks to that time frame. Meet with your flooring, lighting, and wall finishing supplier, as well as your hood system, kitchen equipment, mill-worker, and furniture suppliers before construction begins. This step will position you to find out their specific lead times required to produce, organize, deliver, and/or install. This all needs to be coordinated with your contractor and then laid out in an organized project management Gantt chart which shows activities (tasks or events) displayed against time.

Quitting Chefs

Problem Area: A scenario that, believe it or not, happens more often than it should is a chef who quits before opening day or shortly there-after. This situation will leave a restaurateur scrambling and leave a question of doubt among you and your other hired team members.

Solution: Before hiring your chef (if you’re not a chef inspired owner) or even before hiring your other team members, make sure your four key statements (Value, Vision, Mission, Culture) are completed. Equally, before hiring your chef, management, and other key staff, make sure your menu concept is completed and you show them the plans for the kitchen and bar space, the size of team they will lead, the wage structure, and overall growth plans. In summary, be 100 percent transparent so there are zero surprises, which is often the main reason a restaurant loses its key start-up staff.

Strapped Cash

Problem Area: Approximately 7 out of 10 start-ups face crucial financial decisions before opening their doors, sometimes (sadly) even leading to the doors not opening at all. Outside of possible delays strapping ones cash, some owners begin losing sight of their budget because they want the best of the best for the interior design of their concept.

Solution: Going hand-in-hand with preparing for hidden costs and delays, what can you do to avoid cash-flow problems? It’s imperative that concept development plans, business plans, and start-up budgets are in place and you’ve accounted for a variety of hidden costs. To reduce a significant portion of your start-up costs, consider leasing your equipment or taking over an existing foodservice space to leave further financial room. Secondly, as an owner, it is important to balance what is most critical to your concept and balance those interior element costs. Have your start-up budget updated on a weekly basis to hold yourself — and your supporting start-up team — financially on track and accountable.

No Customers?

Problem Area: Opening day has finally arrived! The renovations are complete, everyone is excited, and the hired team is trained and ready. You open your doors and only a few customers trickle in, leading to more questions and doubt. What happened?

Solution: The adage of “if you build it, they will come” sadly doesn’t exist in the restaurant industry. With a marketing and advertising plan, a startup needs to create buzz long before opening day. You must engage with the community prior to opening day through a launch day strategy plan. As a start-up restaurateur, you need to develop a strong budget for this category and keep it locked away and off to the side from your other expenses.

One of the main reasons this problem area occurs is that the startup needs to dive into the marketing category to pay for other equally important financial categories because of hidden costs in property surprises, inevitable delays, and re-hiring of staff.

Starting a restaurant, bar, or cafe takes a level head and plenty of research, organization, and financial planning. Use these startup SOS tips to stay ahead of the game!

Choosing the Correct Restaurant Equipment

Originally Posted on FoodableTV – By Doug Radkey 03/03/2017

A memorable, profitable, sustainable, and scalable restaurant arguably starts with the correct choice of equipment. When setting up your location, the kitchen and bar planning process can be one of the most exciting, exhausting, confusing, and detrimental aspects that will, in fact, determine the long-term success of your venue.

Much of the process comes down to research and truly understanding your concept and size of location. It would also be wise to work with a trusted supplier, consultant, chef, and/or experienced bar manager to develop a reliable and productive space that will maximize every available square foot available to you.

Choosing the wrong equipment or choosing the wrong placement of equipment can have a significant impact on both your start-up and operating cash-flow, in addition to productivity levels, staff morale, customer service, and overall food and beverage quality.

Let’s look at four key areas that can assist you in your equipment decision-making process.

Budgeting

A lot of your decisions can be made early on within both your business plan and your concept development plan. Everyone has a budget and equipment plays a large part, often 15-25 percent of the start-up costs. It’s important to first determine your wants versus needs, plus the style and size of kitchen or bar that you’re planning to develop, in comparison to your new and exciting menu.

When you know your budget, you will know if you can afford average or premium equipment, or new to refurbished equipment. Pro Tip: Determine your most vital pieces of equipment based on your menu and look for premium in these items, as they will be used the most.

Consider working with an accountant who can develop a plan to reduce capital gains while discussing other available options to aspiring restaurateurs. Alternatives should include leasing your kitchen and bar equipment during the start-up process.

Productive Capacity

With utility costs continuously on the rise, it would be ideal to locate more “green” equipment that will improve your cash flow — and essentially pay for itself through energy savings in the long-term. Measure this against your operating hours and meal-break strategy to determine how long specific pieces of equipment will be on for. This will assist in helping you determine your specific needs and the options most suitable to you.

Gas ranges, for example, will provide a variety of heating speeds dependent on the units BTUs. Take the time to research the unit through the available spec sheets. By doing so, you will learn just how long the range takes to heat up and the BTUs it will require to match your style of service.

Productivity doesn’t stop there. Ergonomics or “staff mobility” is equally as important. Consider the number of steps required by staff to reach fridges or other workstations, in addition to the height of tables and equipment stands, to reduce the amount your staff will need to bend to complete a task. A comfortable working environment will enhance your staff morale and there are numerous options available to you through today’s manufacturers.

If you know your location’s electrical, gas, and plumbing capacity, try to work within its parameters when choosing items, or expect utility upgrade costs with your contractor. Discuss these details with your property management and project engineer. Finally, always look for ways to reduce water and chemical use. Choose equipment that is also easy to maintain and clean for the most optimal productivity.

Choice of Supplier

When trying to decide on your main equipment supplier, look for vendors that have a large range of options for the same items (different price points), excellent customer service, showrooms, delivery and installation services, preventative maintenance programs, and financing options. Discuss new versus used, look for product or service “value adds,” product warranties, training programs, and future availability of parts. It is worth shopping around to 2-3 trusted suppliers in your region to make an educated decision based on experience, price, and their valuable options.

Balancing Menu

Before finalizing your equipment purchase, keep room for scalability and future flexibility within your menu. Understand your target market and proposed menu mix. How much fresh product will be used to execute your menu and concept? What is the delivery schedule going to be from the vendors in your area? How much fridge space is going to be required to keep the product fresh in comparison to the estimated sales and delivery schedule? How many ranges and deep fryers are you going to need, for example, to keep up with your seating capacity?

Once your equipment is purchased and you’re nearing the start of your operations, create a manual for all of your staff. This manual will help them understand the equipment pieces. Establish proper training and cleaning schedules, in addition to when each piece of equipment should be turned on and off, to ultimately reduce utility costs and unnecessary wear and tear.

You also want to keep a budget off to the side for kitchen and bar small-wares that seem inexpensive at first but add up quickly. These are just the starting points that need to be considered when choosing the correct equipment that will not only work hard for you, but ones that will also maximize your financial investment.

Adapting Your Restaurant to Market Changes

Originally Posted on FoodableTV – By Doug Radkey 02/16/2017

The word “sustainability” has been used often of late in various ways within the food and beverage industry, with sustainable energy and ingredients being in the forefront. The word sustainability can easily be defined as the capacity of something being maintained over a period of time, without jeopardizing its future needs.

The same can be said for your concept. It should be able to continue, for the foreseeable future, right?

With ever-changing demographics, the likely saturation of your hyper-local competition, the ever-changing wants and needs of customers, in addition to the changes in ingredient availability plus fluctuation in both food and beverage costs, how can your food service business be ‘sustainable’?

Nothing in life is ever guaranteed, but some aspects are in your control when it comes to your properties longevity — if you approach your restaurants conceptual planning, with the right mindset.

1. Be Scalable

The first thing, and arguably the most important, is ensuring the concept is scalable. This means providing the opportunity to pivot with market changes and position the concept to grow in a strategic manner through menu changes and pricing changes, all while quickly adapting to a newly-opened competitor without losing your overall vision. Introducing a restaurant business model that is based solely on a current food and beverage “trend” is not building a scalable concept.

The second aspect of scalability is engaging the local community. If you have or plan to have multiple locations in different markets, position your concept to operate in different size capacities in addition to having the ability to purchase product from local farms, breweries, and wineries, etc. specific to that market. And through it all, you must of course keep your core value, vision, mission, and culture statements consistent across the board.

2. Be Profitable

At the end of the day, we all need to make money. Can the concept continuously produce a profit for you and all of your shareholders (staff included) over a long period of time? For a long-term budget forecast, consider the rising food, energy, real estate, and wage costs over time for the most accurate projections.

In three years, can your restaurant withstand these increases based on its capacity for seating and production? Can your restaurant adjust prices and control costs in the future based on the current menu style, price mix, and target demographic? Or will your target market turn a blind eye to your brand if you were to raise prices too high? What would be your plan to deliver the perception of value now and in three years?

3. Be Memorable

We all know, or should know, we’re in the business of selling emotions and experiences, not just food and beverage. Delivering new, memorable experiences will keep your customers coming back, time and time again, over a longer period of time.

Can your concept also invest in improving society and the food system all at once? Every aspect of your concept needs to tell a story, explain your key statements, and resonate with your target market. As the market changes, adapt and scale with it.

Today’s industry news is filled with concerns surrounding food costs, energy costs, climate change, wage increases, nutritional factors, and numerous other social issues, which are (thankfully) forcing concepts to operate more socially-focused business. Each of these concerns, however, provide an opportunity for you to tell your story on how you’re adapting and addressing these concerns.

This is why telling the story of where your meat, fish, vegetable, and beverage ingredients come from is so important, as it also helps customers navigate past the notion that their favorite menu item has recently increased in price. To summarize, storytelling develops a lasting memory.

4. Be Consistent

The overall design of a sustainable restaurant starts with the menu and the types of food and beverage preparation that is required to support that menu in a consistent manner. Having the correct FOH and BOH systems in place will create a level of consistency within your restaurant.

The word consistent needs to start at the top, with the owner/operator, and work its way down with a systematic approach. Creating consistency will equally create a level of trust, anticipation, and eagerness to return for all of your customers.

Matching all of the above with the briefly mentioned sustainable energy and sustainable ingredients, in addition to finding solutions to reducing your level of waste, will ultimately position your overall concept to be ‘sustainable’ long-term and adapt to frequent market changes.

It starts with research, design, and multiple levels of planning plus an innovative, progressive mindset. Do you have it?

New Year’s Resolutios for Your Restaurant

Originally Posted on FoodableTV – By Doug Radkey 01/06/2017

Another year has passed us by. It’s time to reflect and make even greater improvements. Whether you believe in developing resolutions or not, your mindset for the upcoming year needs to be about “doing.”

The restaurant industry is known to have its more quiet moments during the first 1-2 months of the calendar year, so this is the perfect time to plan your to-do list and set SMART goals. Let’s get started!

Team Meeting No. 1

A yearly review is not just about looking at the financial statements of the past year. Hold a team meeting and truly listen to your staff. Engage in a positive, organized conversation. What did they enjoy and maybe not enjoy about the past year? What did each department (front of house and back of house) learn? What challenges did they face? What strengths do you as an owner, operator, or manager possess moving forward in the New Year in terms of personnel and what areas need to be addressed?

Business Evaluation

Now is the time to review financials. Did you set budgets and goals last year for your venue (let’s hope you did, if not, get into the habit now)? Did you achieve your financial goals? If not, what threats (challenges) did you face that prevented you from delivering a positive result? Look at your food and beverage costs, gross margins, sales mix analysis, labor costs, inventory management, waste reports, RevPASH analysis, reservations, and other aspects of your business.

You also want to evaluate your restaurant from the point of view of the customer. What reviews did you receive, both offline and online? What types of experiences are your guests having and sharing within your community? Take notes and look for both positive and negative trends to help make future adjustments.

Explore Your Surroundings

What opportunities may present themselves during the upcoming year for you, your team, and your venue? What events are happening within not only your community but also regionally and nationally?

You want to take this time and review your competitive landscape. Which restaurants closed in the past year within your city and within your hyper-local area? Which restaurants are suddenly doing well or are preparing to open? Which weaknesses of theirs could you capitalize on?

Use this quiet time to walk around your establishment. What needs to be fixed, painted, or touched up, both inside and outside? Does anything need to be updated or upgraded? Look at your kitchen and bar equipment, as well as washrooms, tables, and chairs.

How much did you spend on repairs last year? Is it time to reinvest back into the business with some new equipment?

Develop SMART Plans

Using all of this collected data and begin to develop SMART plans for the upcoming year. If you’re unsure of what this might mean, SMART stands for Specific, Measurable, Attainable, Realistic, and Timely.

In order for goals to translate into motivation and improved operational performance, goals must be specific. Goals must also be measurable to be able to provide progressive feedback and to know when the goal is actually achieved.

A goal must also be attainable by an individual or team member, or properly delegated throughout the organization or by third parties. The goal must be challenging yet realistic. By setting goals unrealistically high, you will not see an increase in motivation or performance in yourself or your team.

In order for goals to positively affect motivation and performance, goals must also be time-related. However, a timeline of tomorrow may make achieving the goal unrealistic. Similarly, within three years may be a timeline so far into the future that it lacks urgency and motivation.

All of your financial budgets, marketing plans, and personal development reviews must meet this SMART acronym to be successful.

Example: “Reduce food costs by 1 percent over the next 60 days by implementing new inventory program, re-training staff on portion control, and meeting with vendors while reviewing our sales mix analysis every 10 days.”

List as many as you believe you and your team can realistically accomplish and ones that you believe, based on the data collected, are the most critical to the restaurant and its success.

List all of your available resources to make goals attainable and try to keep the goals in bite-sized breakdowns; easy for your staff to understand and remember. You also want to recognize the potential for any possible challenges for each set goal so you and your team are well prepared.

Team Meeting No. 2

Take these SMART goals and plans and discuss them with your entire team during a second (very important) team meeting. Agree to a timeline for each goal by signing it with your own signatures. Own your goals and include your entire team in the process.

Have meetings with your team on a scheduled, regular basis regarding performance and progress. Provide and receive ongoing feedback and align a reward system with desirable results.

It’s no secret — personal resolutions often fall apart. That’s why gym memberships soar in January, but facilities are empty come March. If you work as a cohesive unit, you can hold each other accountable to deliver the results you want this year – creating a successful benchmark for your restaurant!

Analyzing Your Restaurants Hyper-Local Competition

Originally Posted on FoodableTV – By Doug Radkey 11/25/2016

In recent years, you may have come across an emerging term online or within the realm of marketing called ‘hyper-local’. Though the term was first introduced to the masses in the early 1990’s, it really started taking form with the development of mobile and GPS applications over the past 5-10 years. However, the idea surrounding hyper-local has been used for decades in terms of basic market research.

The definition of hyper-local describes it as delivering services to a town, village, county, postal code, or another small, defined community within your region. The term is nothing fancy. Just a combination of two words that essentially describes your local community and a term that can be used within a multitude of industries in various ways.

Within the restaurant industry, it is fundamentally important to understand your hyper-local market, especially when it comes to demographics and competition. It should be an important aspect to not only your start-up research, but also for the ongoing re-evaluations of your marketing plans.

A radius of 1-5 miles surrounding your location of choice can be referred to as your hyper-local area. Here are the questions you need to answer to properly analyze your hyper-local competition and give your restaurant or bar the advantages it needs to be successful today, tomorrow, and next year.

The Defining Factors

Take this opportunity to determine the exact size of your hyper-local market in terms of demographics and the number of competitors, while taking this data and measuring it against your targeted customers. Look for trends over the past 5-10 years in addition to projected growth patterns over the next 5-10 years. Determine how many food service providers there are within the specified area plus how many are chains versus independently owned, while not forgetting about grocery stores and their emerging to-go menus.

Sizing Them Up

Don’t just list your competitors, analyze them. With in-depth research, you can determine their longevity in the market, their estimated revenue, their community perception (online reviews), their employment structure (positions, quantity, salaries, turnover), and location-related advantages. Consider talking to residents and suppliers to gain as much relevant information as possible. This data is an underlying asset to your restaurant and its future.

Positioning Strategy

How is it that each of these competitors are marketing their restaurant in terms of promotions, price, experiences, and menu offerings? Do you believe they have strong brand recognition within the hyper-local area? Break down each competitor and follow it up with a summary of how you plan to position your restaurant or bar in comparison.

Filling a Gap

How are your competitors filling a gap within the market based on the hyper-local size, its demographics, and the other comparable competitors? Are they filling the demographic’s expectations in regards to food, drink, price, service, and experiences? Break down each competitor and follow it up with a summary of how your concept compares and will ultimately fit in to fill a gap.

Online Activity

With so much focus made towards online marketing, how does your competition measure up to today’s online expectations? How would you grade each of their websites, search engine results, online review site results, use of social media platforms, and online ordering or reservation-based tools? What strategies can you implement within your plans to create an opportunity and strengthen your brand, within your market?

Value Statement

How does each of your competitors deliver value to the market?  How are they informing the local demographics and their staff about the restaurant’s top priorities and what its core beliefs are? How are they connecting with their target customers and how will you add value in return? How do their value, vision, mission, and culture statements add up?

Anticipating Shifts

Does the competition have a concept that is scalable, profitable, memorable, consistent, and sustainable? Analyzing these five essential components will position you to anticipate your hyper-local competitor’s future moves and keep you a step-ahead of the game.

Equally, anticipating shifts within the industry and with growing food costs, with further in-depth research, will prepare you for changes in market demands — which should be highlighted in your restaurant’s business development plan.

In summary, you want to look for ways to gain an advantage with educated assessments, whether it is against your most direct or indirect competitors. Properly analyzing this data will assist you in developing your SWOT analysis, your marketing campaigns, customer experience strategies, and developing your core menu items; while providing a winning, memorable restaurant concept within your hyper-local community.