Restaurant Operations

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Maximize Profits and Live in the Moment

Maximize Restaurant Profits & Live in the Moment

Originally Posted on FoodableTV – By Doug Radkey 07/05/2017

There are arguably four key ingredients to a successful restaurant – the right marketing plan, flawless operating systems, memorable customer experiences, and finally, what I like to call ‘living in the moment’.

In the blink of an eye, a moment of opportunity is simply gone. You’re not going to get the past day, past hour, or past minute – back again.

With that in mind, ask yourself this right now– have you taken full advantage of cost control and revenue generation during the past day, past hour, and past minute?

A successful restaurateur understands they must maximize every day, every hour, every seat, every phone call, and every online order. Empty seats and minimal productivity is simply not good for business in this cut-throat industry where costs must be controlled and where revenue must be generated on an evolving basis.

Customer duration, kitchen productivity, average check, and Revenue Per Minute (RPM) or Revenue Per Available Seat Hour (RevPASH,) must be closely monitored by today’s operators and managers.

So, how can a restaurateur maximize profits, improve customer turnover rates, control operating costs, and effectively live in the moment?

Here are some tips everyone can use, starting today!

Tip #1: Do an Operations Audit

Review all day-to-day processes and understand the overall work-flow of the restaurant.

Some good questions to answer:

  • What back-of-house systems and front-of-house systems are being utilized?
  • How are they affecting productivity, customer service, and customer turnover?

Review each checklist, each training program, each communication method, and each piece of equipment to determine how it is either hurting or improving the restaurant– in both the short term and long term.

Tip #2: Integrate Technology

Without completely replacing person-to-person interaction, how can new restaurant technology improve how a restaurant lives in the moment?

New technology can develop better and quicker communication amongst the entire team (for example, table-side POS systems.) It can also enhance and create more profitable take-out & delivery programs (for example, online ordering).

Technology can also improve inventory methods and cooking time methods, which will both reduce waste and help to control hourly operating costs. It may be time to complete a technology audit for your property.

Tip #3: Maximize Space

Table management, floor layouts, take-out counter design, and kitchen space optimization will in fact, play a large role in productivity, customer experiences, and customer turnover per day and per hour.

For example, a restaurant’s table configuration will greatly affect duration and average revenue per customer, based on the spacing between tables and whether it is a booth configuration or an anchored or non-anchored table setting.

Make sure you’re maximizing every square inch to its full capacity based on the concept and average party size without diminishing customer experiences.

Tip #4: Improve Menu Engineering

It’s no secret– the menu is where the money is made. The size of menu also plays a large role in productivity/ work-flow, potential waste levels, time of visit, and customer turnover rates.

For example, to fill seats during traditional non-peak hours, restaurateurs need to consider menus that target a variety of day-parts while understanding their ideal customer profile.

This takes a full team effort, from the owners, managers, chefs, and front-of-house staff with the assistance of point-of-sale reports, customer feedback, and other market research.

Tip #5: Update your Marketing Plan Regularly

The moment a restaurant stops marketing, is the moment it starts failing.

Once a restaurateur truly understands their locations slow periods and peak periods, in addition to target market and guest spending habits, a strategic plan can be developed and executed to maximize each moment of each day.

Ensure your restaurant has a monthly and quarterly marketing plan created with SMART goals.

Tip #6: Consistently Monitor Guest Experience

Outside of food, drink, and customer service – music (tempo & style), lighting (brightness), seating and/or counter configuration, and overall interior design also play a large role in contributing to a guest’s duration, their amount of spending, and if they will return again.

These consumer touch points must be monitored and measured on an ongoing basis, preferably with the help of secret diners.

Tip #7: Restaurant Revenue Management

Taking all of the above strategies and aligning it with an in-house Restaurant Revenue Management program (RRM), will accurately maximize revenue, time, and capacity while controlling your operating costs.

RRM can be defined as simply selling the right seat (or take-out meal), to the right customer, at the right price, at the right time, and for the right duration of time.

It is possible that a restaurant could run at 75% capacity or more, and still not be profitable. This is why combining what’s called Revenue per Available Seat Hour (RevPASH) or Revenue per Minute (RPM) reports with seat duration, average check, food costs, and operating costs including labor cost reports is extremely important to maximize each and every moment.

Some key takeaway questions to ask yourself now:

  • What is the dollar value of each seat and each take-out order; every hour, day, month, and year for your restaurant?
  • What is the cost of each operating hour?
  • Are you living each moment to its fullest?
  • What areas and what times of day can you improve on?

Only you know these answers and can leverage them to develop an action plan that will make your restaurant more profitable.

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The Importance of Secret Diners

The Importance of Secret Diners

Originally Posted on FoodableTV by Doug Radkey – 06/20/2017

Traditional comment cards and now online reviews play a large role in this industry, but only a very small percentage of guests actually fill out the forms and/or leave a review. Plus, it doesn’t always provide a measurable result.

To get a truly unbiased, outside perspective, a secret shopper or ‘diner’ in this case, is often the best option.

For a minimal investment, a secret diner program can become a profitable training and development platform for owners, operators, and managers. A secret diner also provides a different perspective: one that speaks from the eyes of a customer and not from the eyes of an owner, manager, employee, friend, or family member. 

After a secret diner visit (which is suggested to be once every month or at least every three months), a secret diner should leave a comprehensive report of the visit with a list of positives, negatives, and a score for a variety of categories. This score (which should be shared with staff) can be used as a measurable tool while also implementing a high level of accountability – with a goal to improve the score after each future visit.

A secret diner, whether for a franchise or independent restaurant, bar, hotel, or entertainment venue should be looking to fill out the following in their reports for restaurant operators to evaluate:

Curb Appeal 

A secret diner will score the establishment on parking, visibility, the landscape, lighting, and overall cleanliness of the exterior elements.

As a first impression, this score is extremely important and should not be taken lightly. 

Greetings 

No matter the type of concept (whether it’s a host/hostess in a full service restaurant or a staff member behind a counter at a QSR), the restaurant will be evaluated how long it took to be acknowledged upon entering. 

Share the in-house policies for greetings with the secret diner beforehand so they know what to look for.

A secret diner will also report on how smooth the process was while timing each of the interactions, including greetings for table service and how long a guest is traditionally waiting to be seated or taken care of for drinks. 

Service Sequence

Service staff are often the make or break between a positive and negative guest experience.

Are they following proper procedures when owners and managers are not around?

Are they announcing specials, walking a new guest through the menu, up-selling, or simply making suggestions based on knowledge of the menu?

Are they gossiping with other staff, or are they on their mobile phones? 

Are they able to adjust to a potential conflict a secret diner may throw at them unexpectedly?

These are all measurable results that can be used for future training purposes and improving customer service sequences. 

Quality Control

Food and beverage is of course, a crucial element to the success of the restaurant. A secret diner will test an establishment on timing between ordering and receiving each portion of the meal (including drinks) in addition to the overall taste and the overall presentation.

They will take note if they feel something is missing (maybe a garnish), if something was under or over-cooked, or simply could be better in terms of presentation.

All of this information is prudent to the improvement of a successful bar and/or kitchen.

Cleanliness

A secret diner will also take note of the cleanliness throughout the restaurant. These individuals are trained to look for clean chairs, tables, menus, condiment holders, floors, washrooms, and walls etc.

From where they’re sitting, what is visible to them at server stations, behind the bar, or into the kitchen? Use this information to improve cleaning schedules, work stations, and checklists.

Special Audits

An owner, operator, or manager may also consider hiring a secret diner to look for a specific issue they feel they’re experiencing. For example, is a bartender being too generous and adding in an extra half ounce (or more) of alcohol when asked nicely by the customer? Are they checking identification of possible underage guests? These are just two examples, but a secret diner can often be better eyes and ears than that of a camera.

A secret diner program is often overlooked or considered an unnecessary expense. If an establishment looks at it as a way to control costs and achieve efficiency, and is completed on a consistent basis, if will undoubtedly improve customer satisfaction and customer experiences. In addition it will also improve methods for current and future employees, training platforms, inventory control, and overall operations. 

All of this is extremely important when looking to grow, gain respectability within a community, or simply improve operations. Without these reports, a restaurant would be losing out on the opportunity to better themselves with an unbiased view of the establishment.

Nobody is perfect, but everyone can work towards a common objective and a secret diner program is the perfect start.

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Developing Your Restaurants Curb Appeal

Developing Your Restaurants Curb Appeal

Originally Posted on FoodableTV – By Doug Radkey 06/07/2017

Outside of social media, word-of-mouth, and online directories – how else does a potential guest notice a restaurant? The answer; a store’s outside appearance.

As a restaurateur, it should start with a concept development plan that not only focuses on the interior, but one that also focuses on creativity throughout the exteriors architectural design.

A restaurant’s exterior, even in a shared retail plaza or downtown core with minimal ‘store-front’ square footage, should offer a sense of transparency and cohesiveness between the inside and the outside. When a potential guest is outside of a restaurant, they should also feel a sense of energy, enticing them to go inside.

Not every restaurant is going to be a hidden gem within the community. As always, one must thoroughly think about the message that’s intended to be delivered. With proper planning and thought processes, the exterior will help make a memorable, first impression.

Do an Initial Audit  

Walk through the targeted (hyper-local) neighborhood and take note of the immediate surroundings and other restaurants. What restaurants are standing out in a positive fashion? What about the restaurants that are driving a negative emotion as it’s approached? Take note of these findings and make a to-do and not to-do list.

Consider the Parking

In this industry, we talk a lot about guest experiences. The first thing a guest is going to experience is the parking situation. A perfect way to ruin a positive restaurant experience is to have guests leave only to discover that their cars have been ticketed or towed. Consider the concept’s intended capacity, both take-out and dine-in traffic, hours of operations, and the surrounding businesses – plus the parking spaces they will be demanding. Is there enough convenient parking spaces for everyone? If not, move on to the next.

The Importance of Landscaping

Depending on the location, not every restaurant will have the opportunity to customize storefronts or offer unique landscaping. However, even the most minimal locations can be creatively executed with greenery and/or gardens etc. A restaurateur should also consider the brand’s color scheme and overall style, while providing a distinctive contrast with any of the neighboring businesses.

Branding in the Storefront

Signage is an obvious requirement to draw attention, to allow for ease of recognition, and to drive a concept’s primary message. Any secondary signage (on windows for example), should have text and graphics that easily coincide with the concept. As an operator, it’s important to remember that potential customers want to see inside the restaurant, so don’t overuse window graphics (and please stop using hand written notices on doors & windows).

Menu Display

If a restaurant is in a high foot-traffic area, ensure the food & drink menu along with the daily special  is posted and available to read from outside the restaurant. Remember that your menu is the best marketing tool, so make it readily available, even during non-operating hours.

Embrace Openness

Is there a creative way for potential guests to visualize or smell the cuisine or listen to the sounds coming from inside the restaurant? Find ways to have the energy from within the restaurant, fill the streets or parking lot without disrupting neighbors or landlords.

Outdoor Seating

Depending on the concept and seasonal climate, outdoor seating can easily drive some of the most positive experiences for guests. Similar to “openness,” it presents a restaurant the opportunity to create a visualization of food, drink, and service from the street. However, it’s important to remember that choice of furniture must equally play an important role and that staff members are responsive and are clearing outdoor tables regularly.

Lighting  

A restaurant’s lighting, both inside and outside, is extremely important. Interior light choices need to be considered from an exteriors point of view as well. Potential guests walking by should be able to see food, drink, and the atmosphere. This will help to drive a guest’s decision to come in. Outdoor lighting for patios need to be creatively decided upon and it’s equally imperative, that there is enough exterior lighting for the safety of both the guest and staff.

Do a Curb Audit

Do a walk around of the restaurant every 1-2 days and ensure it’s clean and tidy. Then, take the time, every few months, to simply people watch. Sit outside, near the restaurant, and see how people react when they walk up to or by the restaurant. Are they slowing down? Are they looking at the menu? Are they stopping and looking inside? Count how many for each category over the course of 1-2 hours and consider making adjustments as needed.

At the end of the day, a guest wants a memorable dining experience. This starts outside. If it is uninviting, a potential guest will turn away or keep walking. If it’s cluttered, unorganized, or dirty, they will quickly associate this with the interior, including the kitchen.

Curb appeal is a means of effective communication. When developing a concept plan and/or when choosing a location, consider each of these external factors to ensure the restaurant is in a position to foster positive customer emotions and “touch points.” This will ultimately drive awareness, revenue, and repeat business.

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Preparing Your Restaurant for Summer

Preparing Your Restaurant for Summer

Originally Posted on FoodableTV – By Doug Radkey 05/15/2017

It doesn’t matter which region you’re in — the warm summer weather provides restaurateurs the opportunity to develop seasonal flavors, all while providing them the ability to fill their seats (and patios) to drive new revenue channels.

To execute a flawless summer program, it’s important to start planning as early as possible, preferably 2-3 months prior to the start of summer. Developing a summer program this early will allow a venue to determine cash-flow needs, staffing requirements, inventory levels, and any additional training requirements to ensure a smooth operating season.

As with any seasonal or marketing related program, it’s imperative to use a SMART mindset towards your planning; one that is Specific, Measurable, Attainable, Realistic, and Timely. Secondly, it’s a fantastic opportunity to utilize your staff to brainstorm menu items, themes, and other special events. Finally, one should also use this time to review previous years’ seasonal data to set new, attainable financial goals.

The goal at the end of the day is to generate awareness, repeat business, and an increase in revenue over the course of three months. Here are nine ways to get started with summer planning, regardless of your concept type.

1. Drive Energy.

The warm weather attracts tourism and gets locals looking to re-explore their outside surroundings. The restaurants or bars that provide the right mix of energy are the ones that will attract a consistent level of guests throughout the season. Look for ways to utilize live music, themed parties, and interactive games (inside or outside) on a daily or weekly basis throughout the summer. A fully pre-planned calendar of events will drive energy, create excitement, and develop repeat business!

2. Create Event Buzz.

To maximize an event’s reach, it’s best to use a three-tiered approach to creating event buzz. Have a plan in place to promote your seasonal events. You’ll need to one prior to the event, one during the event, and one afterwards, recapping the event. This will ensure you’re promoting the event, giving guests a means to engage with your brand. You’re also giving an opportunity for others to see what they missed out on, making them intrigued to not miss your next event!

3. Connect w/ Your Farmers Market.

Consumers are looking for new flavors and innovation, as well as creative summer-like takes on traditional menu items. There is no better way to stay ahead of this need than by utilizing and building stronger relationships with local farmers market. Provide your culinary team with the means to develop unique, limited-time offers with not only seasonal produce, but a variety of barbecue-related flavours as well.

4. Put a Little “Theatre” in Drinks.

Innovation shouldn’t stop with just the kitchen-related menu items; beverages need to be included into the mix, too. (It is hot out, after all). The “garden-to-glass” trend continues to grow and new, refreshing spirits are becoming readily available to develop unique flavorful drinks with a memorable presentation. Beer and cocktails with low-levels of alcohol should also be featured, plus creative mocktails and house-made spritzers should highlight one’s summer menu offerings.

5. Utilize Video & Storytelling.

These two elements are really required for any time of the year, but to promote your events, your limited-time offers, and summer drink menu, there is no better way to amplify the message than through video. Use this opportunity to showcase service staff planning an event, cooks building that signature summer burger, or bartenders pouring that refreshing beverage. Remember, with today’s smart phones, you no longer need to break-the-bank on video production!

6. Tap Social Circles.

Summer is a great opportunity to reach out to sporting teams, bike clubs, and other outdoor enthusiasts. Can your venue host after-parties? Can your venue host a social-media-only party or tasting event? Don’t be afraid to reach out and partner with other local businesses and organizations. Every campaign should have a social media and/or community-driven strategy behind it.

7. Convince Guests to Return for Three Visits.

Each seasonal program and its associated campaigns should have the goal of guests returning at least three times. Understanding your target market, is it realistic to see a guest return three times per week, three time per month, or once per month over the summer? Once you truly understand their lifestyle and spending habits, you can develop events and campaigns to drive summer loyalty and a personalized experience.

8. Use Quality Designs.

When a venue gives itself the opportune time to plan, a sense of higher quality often comes with it. Budget for and take the time to create high-quality designs for posters, ads, video, and social media posts. This will speak volumes to potential guests while providing a perception of value to not only your new summer menus, but also your events and overall venue.

9. Remember, it’s All About Finesse & Balance.

Absolutely, the summer provides an opportunity to think outside the box, but don’t go overboard with menu changes and special events. Know your target market, know your concept, and know your financial budgets. Develop a program that is simple but memorable, profitable, and effective, and without placing additional stress on your kitchen, bar, or service staff.

In summary, concentrate your summer plans on presentation, energy levels, storytelling, and developing a personalized guest experience. Doing so will develop a sense of community and culture, setting your venue up for success, even as the weather (and often sales) begin to cool down!

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Collaborating w/ Local Chefs & Businesses

Collaborating w/ Local Chefs & Businesses – Even the Competition

Originally Posted on FoodableTV – By Doug Radkey 05/01/2017

The word “collaboration” stems from the process of two or more people or organizations working together to achieve something that is remarkably outstanding. Giving that some thought, shouldn’t all restaurants and bars alike be working toward achieving this goal and mindset?

The problem is not everyone has learned that even collaborating with the “enemy” (competition) is not necessarily a bad thing. Restaurants have an array of opportunities to collaborate with suppliers, their community, and yes, even the competition, while working towards a common goal; more awareness, traffic, and revenue.

The below suggestions all have two key components: ticketed events and/or message amplification.

Local Farms

Assuming your restaurant is sourcing product from local farms, fisheries, and other artisans; consider taking that relationship to another level.

Guests today are looking for one-of-a-kind experiences, along with food and beverage pairings that develop a perception that it is personalized or customized – just for them.

This is leaving an opportunity for restaurateurs and their culinary and bar-focused teams to work alongside local suppliers to generate not only unique recipes but also a series of educational events where a farmer, chef, and bartender, for example, can educate guests on the product throughout the meal.

The farming partnership can also be taken to an “expert level” by having your restaurant host a dinner at the farm itself — climate and locality permitting. This takes the educational component to a new level and allows a culinary team to execute in one of the most creative environments, all while guests get to enjoy a variety of sensory-related experiences.

Local Beverages

Similar to that of the local farm collaborations, restaurants and bars have an opportunity to further enhance awareness, revenue, and experiences by partnering with local breweries, wineries, and distilleries.

Beverages today are an important aspect to the overall dining experience, and what better way to drive that message than to create pre-fixe menu nights using a chosen local beverage? This will give your culinary team the creative ability to infuse this beverage and flavor in all of the dishes, while a representative of the company walks guests through the production, tasting techniques, and flavor profiles of their product, creating a fun night and memorable experience worth sharing.

Chefs

For a one-night-only type of event, consider collaborating with another local chef at either your restaurant or theirs (or ideally alternate the next month). Use this opportunity to put a unique, one-night-only menu together that fits within the confines of your concept and put together the creative minds of both chefs.

The “aha” moment is when you both get to expand awareness to each others’ market and close network of guests by promoting this exciting event. This also drives a perception that you’re community-minded and open to creativity. And developing an event that can generate additional revenue on what could be a slower night for your concept always helps.

Charity

Cause-related marketing has always been a crowd-pleaser and is very easy for restaurants to execute, especially with venue space, food, and beverage options already in-house. Take this opportunity to communicate among your staff to generate a list of causes you and your team would prefer to support within your community.

Reach out to them and collaborate on an event that will generate awareness, guest experiences, and minimal revenue for the restaurant to cover costs, at the same time generating a generous portion of revenue for the cause or nonprofit organization.

This type of collaboration will generally grab the attention of local media and dignitaries, further amplifying your reach and awareness, and again driving the perception you’re a valuable member to the local community.

Competition

A little friendly competition has never hurt anyone (that we know of) and collaborating with other local restaurants can be very beneficial for everyone. Consider partnering with your local business resource centers to generate a one-night-only or week-long “restaurant/bar crawl.”

You can even develop your own event with other similar restaurants in your area, for example, a battle of chef creations or bartender creations. Consider a “Caesar Battle,” meaning which restaurant/bar can create the most epic Caesar drink, with a reward going to guests who visit and try each location’s creation.

The ideas are truly endless, and really fun, for everyone involved. Whichever is decided on, ensure it is driving traffic into your location. At the end of the day, it’s about the guest and egos need to step aside.

Now find ways to creatively combine two or more of the above collaborative ideas for the most unforgettable experience and revenue-generating opportunity. All of the above options and events will enhance your social media strategy, amplify your messaging throughout the community, improve your community perception, increase staff morale, and generate revenue opportunities for you and your shareholders, while developing a destination, not just a restaurant.

 

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Managing Restaurant Customer Emotions Using Touch Points

Managing Restaurant Customer Emotions Using Touch Points

Originally Posted on Resto Biz – By Doug Radkey 04/27/2017

The restaurant industry is driven by delivering exceptional (and memorable) customer experiences. As a restaurateur, you need to realize that you don’t just sell food and beverage, you sell emotions through experiences. Your concept, whether a restaurant, bar, cafe or food truck, lives or dies by the customer emotions it creates.

To create emotions and deliver on your promise for memorable customer experiences, a concept must think through its initial design while utilizing processes, maximizing communication and creating surprises through a multitude of ‘touch points.’

If you’re just starting out or if you’re already operating, there are areas you must audit – from the view of the customer, to ensure you’re driving these required positive emotions.

Design Points

From the planning stage, a variety of factors need to be carefully addressed. These three areas can make-or-break a brand’s perception in a matter in seconds by delivering a negative or positive emotional reaction.

First impressions count, and it all starts with your entrance. What reaction will customers have when they walk up to and into your establishment?

You need to ensure you’re creating a sense of hospitality with concept-driven decor, accessible doorways and a quick, warm welcome.

Next, over 70 per cent of customers equate restroom cleanliness with the cleanliness of the kitchen. Carefully consider the positioning and visibility of your restrooms in regards to waiting areas, dining areas and the kitchen.

You also need to invest in sound acoustics in addition to scent management systems, while implementing a restroom cleaning schedule throughout each working day.

Lastly, the lighting in your establishment cannot be overlooked. A carefully thought out lighting plan will increase security, boost sales (yes, that’s true), and set the overall mood that your brand is ultimately seeking.

Lighting will, in fact, dictate how long customers spend at your property so it is imperative your lighting choices match that of your brand strategy.

Process Points

Processes, or systems, are the backbone to a successful restaurant. Memorable design, impeccable flavours and a fantastic server is still not enough. Having the right processes in place will develop consistency, which is a key component in developing positive emotions and word-of-mouth marketing.

FOH (Front-of-House) and BOH (Back-of-House) systems take effort, training and accountability. You must ensure you have HR management, inventory management, financial systems, preparation lists, operational checklists, and quality control measures in place. A customer will quickly pick up on an unorganized restaurant which will generate negative word-of-mouth.

Next, walk through the typical service sequence at your restaurant. From walking in, to sitting down, to placing orders, to the delivery of food and beverage – what is the customer experiencing? What are they visualizing, touching, smelling and hearing throughout each touch point?

Lastly, once the meal or order is complete, what is the exit sequence and payment process like for the customer? How long are they waiting, what payment options are available to them (think modern technology), and how will they remember you as they leave?

Is there a thank-you or ‘exit strategy’ in place?

Communication Points

A smooth operating restaurant requires fluent communication from and between not only the management, host, bartender, server, cook and chef, but also the customer. How are the following touch points affecting your customer emotions?

Walk through the process of placing a phone call, placing an online order, making an online reservation, or leaving a comment on social media for example. What emotions are you generating? How long do the processes take? What information is gathered and where is it stored? How long until there is a confirmed reply? Are there areas you can improve to deliver a quick, positive emotion?

Secondly, team communication among your staff affects morale which ultimately affects the customer of your restaurant, and your bottom line. How is the communication between FOH and BOH at your restaurant? What is your in-house process to address a customer complaint or even a question regarding an ingredient while at the table with a customer? How long does it take to resolve and who needs to be involved? What measures can be put in place to expedite the communication process?

Lastly, what messages are you communicating through your marketing channels?

What type of brand image are you portraying on social media, within your menu, on your website, and other advertising? Are the messages consistent and is the copywriting professional on quality material or images? What type of emotion does your marketing effort develop? Does it match your intended brand identity?

Surprise Points

Everyone loves a surprise, right? What expectations are you creating for your customers? What type of events are you generating? Are these events leaving positive, memorable emotions? Consider these emotions the next time you’re planning an event.

Next, what type of reaction are you receiving when you deliver a dish or creative cocktail to a customer? Are you maximizing the wow factor by offering a surprisingly high-quality visual presentation and taste? What can you do with your menu items to stand out from similar concepts in your area?

Finally, consider testing all of your touch points through implementing a monthly or quarterly secret shopper program to receive unbiased reviews while holding the entire team accountable.

By creating positive emotions through design, systems, communication and training, you will undoubtedly increase spending and return visits – which is, of course, your day-to-day goal!

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How to Lower & Control Labor Costs in Your Restaurant

How to Lower & Control Labor Costs in Your Restaurant

Originally Posted on Typsy – By Doug Radkey 04/25/2017

It’s no secret; the ‘average’ restaurant and bar has up to 70-80% of their costs tied up in three areas (food, labor, and rent). At the end of the day, it’s who controls these core costs the best that ultimately wins ‘the game’.

Outside of delivering memorable experiences, marketing, and customer service; developing systems to monitor quality, portions, and value in your food, drink, and entertainment options will help control your food and rent costs, while also developing repeat customers – resulting in consistent revenue, operating capital, profit margins, and engaged staff.

But what about labor costs? How can you lower them? The same way – through control!

This is the mindset you and your team need to have to be successful; every minute, every hour, and every day throughout the year.

Here are some tips to help you get started.

Refine Your Hiring Process

Ensure you have created a value, vision, mission, and culture statement first, to ensure you’re hiring team members that match the values and characteristics your concept needs to be successful.

At the end of the day, ‘values beat experiences when experience doesn’t work hard’. Hiring the right candidates from the start will immediately lower your long-term labor costs.

Balance Staff

Take into consideration (and be careful of) how many full-time versus part-time employees you have that are guaranteed a set amount of hours each and every week.

Ensure you’re leaving the flexibility of given hours in your control, not theirs, even though offering full-time positions may be more attractive during recruitment. With detailed forecasts and budgeting, you can strike the right balance.

Maintain Training Programs

Proper training programs are the backbone to the success of controlling labor costs. Make sure there is an advanced system in place and that it is being executed in a consistent manner within your establishment – by all team members.

There must be transparency and accountability within the program, with a set amount of time allocated for each training session in addition to a set criteria of goals for each new hire to achieve.

Training should also not stop after the first few shifts. A winning training program is one that constantly teaches and cross-trains staff months and years after hiring.

In summary, invest in your staff and they will invest in you.

Monitor Reports

It is imperative that an owner/operator reviews productivity reports each week and avoids overtime pay at all costs.

When creating staff schedules, it is ideal to create them based on current sales reports plus week-over-week and year-over-year trends. Equally, when reviewing sign-in and sign-out reports, ensure that staff members are not abusing the clock, by signing in too early for each shift (for example).

At the end of the day, adequate control starts with the owner/operator and there is plenty of affordable technology such as ‘7Shifts’ that can assist you along the way.

Have Proper HR Processes

Human resource management is much more than just the hiring and dismissal process.

A successful restaurant will have processes in place that not only engage, but reward staff for achieving growth milestones.

Ensure you have a transparent growth and pay scale strategy for each position, in addition to one-on-one quarterly meetings, that will keep individuals working towards a SMART personal goal at your establishment.

Create Experiences

Experiences shouldn’t stop at customers. A restaurant needs to make the job more than ‘just a paycheck’ for employees. What experiences can you deliver to your team that will make them excited to come to work every day and speak positively about the restaurant, with their friends and within the community?

If you take the opposite approach and begin by simply ‘cutting costs’ by offering low wages and fewer hours, there is no other way to say it – you will become a failing statistic within the industry.

When you look at it from a cost-cutting point of view, you will eventually run into less cash-flow. This will then result in late vendor payments, poor food/drink/entertainment quality, fewer guests, and negative staff, which will then lead to turnover costs, poor customer reviews, and an operator who makes irrational business decisions.

With the right mindset and programs, you can, and will, control labor costs along with your other key performance indicators.

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Building Team Experiences

Building Team Experiences to Keep Staff Engaged

Originally Posted on FoodableTV – By Doug Radkey 04/17/2017

Within the industry, we always talk about “experiences” — and rightfully so. At the end of the day, experiences are what restaurants sell to customers. All of the emphasis, however, is on customer experiences; but what about staff experiences?

Desirable experiences don’t stop with just your customers. Your team craves experiences, too! As owners, operators, and managers; it is up to you to make your concept more than just a “job” or way for staff to “pay their bills”.

Ask yourself this. Does your team come to work excited each and every day? How do you think they speak about your restaurant with their friends and family off-duty? Is it a positive message?

Implementing the right culture statement and team-based strategy will assist in controlling your labor costs and reduce turnover, resulting in not only stronger consistency within your operations, but also a positive environment that will flow through to your customers and help amplify word-of-mouth marketing.

Here are some tips to help you get started.

Web Presence and Social Media

Restaurant consumers are seeking to learn and understand the culture of a restaurant when deciding on their eating destination. This is a great opportunity to showcase your team on your social media channels and on your website. Create a bio for your staff noting something unique about them, take a photo (or better yet, a video) of them, and share this content to your online community. This will equally make your staff feel like they’re a part of a team and the business development process.

Create a Stay Interview

Many have likely heard the term “exit interview,” but what about a “stay interview”? Take video to the next level by interviewing your staff and developing a series of testimonials as to why they love working for your restaurant. This tactic will create a sense of place and family among your team and also assist in your hiring process; positioning you to attain higher-quality candidates who seek a positive working environment.

Continuous Education

A great team member is one who craves learning and one who brings the same set of values as you do to the table. Depending on your concept and financial model, consider developing an educational program for your team. Think outside the box and create culinary/hospitality scholarships and/or consider sending your team to farms, breweries, wineries, etc., to learn about specific products you offer and their development processes. Continuous education will create a sense of appreciation, enticing your team to stay loyal to your establishment while benefiting not only their experience, but your customers experience as well.

Profit Sharing Programs

It’s safe to say that people enjoy working towards a common goal. Consider creating a realistic monthly revenue goal (slightly above your current average) for your establishment. Now share this goal with your staff and create a plan for the month on how to collectively obtain that goal. If you surpassed that goal (congratulations), distribute a percentage (5 percent, for example) of the monetary difference among your team. Repeating this process each month will not only increase your revenue and profit, but will develop a team-like working environment; reducing turnover and making your team feel important to the business and its success.

SMART Staff Reviews

Speaking of goals, there should be team-oriented goals (profit sharing) and also personal goals developed within an overall action plan. You should sit down with each individual teammate at least once every three months. During this meeting and using SMART (Specific. Measureable. Attainable. Realistic. Timely.) objectives – give each teammate something to work on over the next three months. This could be increasing revenue per transaction averages, providing accurate inventory counts, reducing waste levels, or having accurate end-of-day cash reports. Of course, reaching objectives should be rewarded, therefore create a reward program that works for your concept and financial model.

Creative Mindset

Don’t let your staff get complacent by having the same menu month-after-month and year-after-year. This will lead to boredom, which will eventually lead to turnover, especially in the kitchen. Allow your team to be creative by “creating” food or beverage options that fit within the confines of your concept. Consider holding an in-house contest each month to choose one featured food and beverage option created by a staff member. Highlight this on your social media and in-house marketing (effectively creating a story), while rewarding that individual with a commission on sales from the item during that month. If the product sells really well, consider adding that item to your everyday menu the next time you re-engineer your menu.

In summary, execute a marketing plan approach to your staff recruitment and staff development program. The time, resources, and effort spent on this will be well worth it in the long-run. Just ask your staff!

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Restaurant Supply Chain Management

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.

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Restaurant Start-Up SOS

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!

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