RESTAURANT MANAGEMENT SOFTWARE Compeat s …...expected, then your original budget no longer...

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RESTAURANT MANAGEMENT SOFTWARE

Compeat’s Restaurant Guide to Running a Restaurant

This guide will discuss some of the major issues that owners/operators face and some best practices on how to approach them.

www.compeat.com | [email protected] | (512) 279-0771 www.compeat.com | [email protected] | (512) 279-0771

restaurant peeps. technology geeks.

TABLE OF CONTENTS

Streamline Accounting

Budgeting and Forecasting

Controlling Costs

Inventory Control

Ordering and Receiving

Staffing

Scheduling

Labor Law Compliance

Deterring Employee Theft

Staying Relevant

Increasing Sales

Expanding Your Business

Building Customer Loyatly

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4-5

6-9

10

11-12

13-16

17-18

19-20

21

22-25

26-28

29-30

31-32



Streamline Your Restaurant Accounting You will at some point hit the dreaded crossroads where the accounting is taking up way too much of your time. If you find yourself spending too much time behind a computer instead of out with your customers, here are a few general tips to help you get back ahead of the game.

Streamline accounting by developing a standardized accounting process. Ensuring that all of your locations are using the company’s standard definitions and processes can help eliminate duplicate processes and reduce the risk of error.

Make sure you have a unified chart of accounts for all of your locations. If each location uses different GL codes, then you will have to manually map out where items belong. Start with the chart that has the most items broken out, then map the other location(s) to that chart. For example, even if only one location caters, leave a catering section on the chart and just keep it blank for your other locations.

Reduce your number of vendors. Having less vendors not only reduces your paperwork; it also increases your buying power. Try to partner with vendors who will supply all of your locations and carry the most of your needs. Also keep in mind that many vendors can provide your invoices electronically and may even integrate with your accounting software to eliminate the need to manually enter invoices.

Invest in the right software. Different POS systems and accounting software’s report and process your data differently. You can save a lot of time and frustration by investing in the right systems that work for you and your restaurant. Remember to keep integrations between these systems in mind as this can greatly reduce the need for manual adjustments in the accounting process.

Run reports weekly. Knowing how your store(s) perform on a weekly basis will a help you make informed decisions about your business. While it may feel daunting at first, you can save money in the long-term by heading off overtime, monitoring inventory, reducing spoilage, and staying on budget by curbing expenses when necessary.

Seek help when you need it. If you want to keep your own books in order to stay connected with where your money is going, that is completely understandable, but try not to lose site of the big picture. Quality and customer service are often the first things to suffer at the hands of this sometimes-daunting task. Also remember, if tax is not your thing, you can outsource just your taxes. And if you simply cannot keep up with entering invoice line items while running a shift, ask someone you trust if they could key items for a few hours each week before you get too far behind and can’t dig your way out.

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Budgeting and ForecastingBudget and forecasting are so import for your profitability. While they are closely connected, the two functions are different. A budget is a static outline of what you think your business will perform for the year before the year begins. A forecast is more of a fluid operational tool that helps you adjust accordingly based on business conditions. Try not to underestimate the importance that both of these processes play in the success of your business.

Budgeting SmarterEvery restaurant’s success is based on building a solid budget, and consistently operating at or below that set budget. There are several common terms for the different levels of flexible or fixed budgets, below are a few examples:

• Sliding Ceiling: The budget can float down based on the ratio of actual to budgeted sales. The budget cannot float above the budgeted number.

• Sliding Floor: The budget can float up based on the ratio of actual to budgeted sales. The budget cannot float below the budgeted number.

• Sliding Open: The budget can float both up and down based on the ratio of actual to budgeted sales.• Straight: The budget does not float. It is locked to the budgeted number.

While all the budget styles work, there are some that can be more beneficial to your business. The sliding ceiling and straight budgets provide consistent control of your costs for example, but the lack of flexibility does not let you adjust your spending when sales are unusually high or low. The sliding floor and sliding open models are more flexible in alignment with the fluidity of your sales. This is especially true of the sliding open format, as it allows given categories goes up if your sales are up and it goes down if your sales are down, making this format a smart option for an industry in which sales can highly fluctuate.

Why is this flexibility so important? A good manager sticks to his/her budget and does not go over, but there is no incentive for that manager to do any more than perform at that expected level. A sliding open style, however, can actively encourage your managers to see the bigger picture. Imagine, for example, that your projected sales for June are $200,000 and your budget for small wares is $300. If a higher than expected number of banquets are booked and the new movie theater opening down the road starts pushing sales to $40,000 over what was expected, then your original budget no longer applies. The sliding open budget, however, increases the small wares budget in line with that increase, making this month perfect to stockpile for leaner months. That way, when January rolls around and the big ice storm hits or a new competitor opens across the street, you can tap into that stockpile and stay on target for the month.



budgeting and forecasting


Many restaurants also tie a small manager incentive to sticking with the budget to get even better performance. After all, what drives managers to come in under budget if they do not see any personal benefit? Offering a manager $100-200 to come in under budget will have them paying attention to every penny spent in your restaurant and focusing on your profitability.

Forecasting for SuccessSo much of your profitability depends on creating an accurate forecast. You want a short term forecast to know how many staff to put on the schedule, how much food to order, what specials to run, etc. You will also need a long-term forecast so that you can better control your cash flow.

Here’s how you use strategy to get a reasonable approximation of future sales:

Don’t rely on your intuition. Also known as the “gut method,” this kind of decision making will usually cost money rather than generate it. Avoid it. You need hard facts, not generalizations.

Start yearly. Look at how you are doing this year vs. last year. Are this May’s sales up 4% over last May’s? Then use last June, July, and August as a baseline for this summer, and add 4% for a good starting point.

Factor in specifics. Think about what happened last June, July and August. Was there a major sporting event in your city? Music festival? Art show? Unusual weather? All of these can affect sales. Factor that into your estimate. Now, look forward. What’s coming up this summer that will impact sales? Check the weather. Look for local events that may add or reduce potential customers in your proximity. Add that in as well.



Controlling CostsIncreasing sales is not the only way to improve your profitability. You need to really work hard to find a way to cut costs as well. The major areas to consider when making cuts are food and beverage, staffing, waste and your electric bills. Below are tips on how to reduce your spend in each of these categories.

Reducing COGSYour food & beverage expense is referred to as your Cost of Goods Sold (COGS). It is one of the few variable costs in the restaurant business. With the profit margin in this industry being so low, it is extremely important to not only control your food costs – but to find ways to constantly whittle away at them without impacting your customer’s experience.

There are many practices to reduce your food costs, but did you know that you can save money by altering the way that you order product? Below are three ways to reign in your COGS through wise purchasing practices:

Minimize vendors to harness your purchasing power. Take an overall review of how many vendors you are using and at what volumes. You should be able to obtain 80-90% of your food purchases from 2-4 vendors. Once you determine which vendors can accommodate most of your needs, talk to those vendors about discounts. There are usually discounts at every level of purchase. For example, many vendors have a tiered pricing structure that gives an automatic discount once you order certain quantities of product. Other vendors may agree to discounts if you can guarantee an agreed upon volume or dollar amount. If you only spend $200 per month with a vendor, ask if you can have a 3% discount if you agree to a three-year contract.

Eliminate the purchasing of specialty items. Take a good look at your product mix and determine which items have the highest sales velocity and the highest margin. Harness that knowledge to create new menu items incorporating more of these items. Also, try to find any ingredients that are only used in a few recipes and rework those recipes to taste great without that specific item so that you can nix those items from your invoicing. For example, if you purchase saffron but only use it in one dish on your menu then find a way to substitute the saffron for another herb that is used in a numerous other menu items.

Control days on hand (DOH) inventory. DOH measures the average number of days you hold inventory before selling it. For example, if you order 180 lbs of chicken and use 30 lbs of chicken each day then that chicken is on hand six days, meaning it will take you six days to use the entire order (180 / 30 = 6). However, if you order 1800 lbs of chicken your DOH becomes 30



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days. Not only does this mean that you have to make room to store a large amount of chicken, you also raise the risk of increasing your costs due to spoilage and eliminating precious storage space that could be used for other purchase items. By looking at your historic usage, you gain visibility so that you order only what you will use in between deliveries. If you are receiving a quantity based discount, then talk to your vendor about storing the product in their space and only delivering it as needed. This will ensure that you are freeing up your coolers and the vendor will rotate out the product so that it is fresh when you receive it.

Be sure to revisit these reports every few months to make sure that you are staying on top of what is selling, what is not, and what costs have increased due to seasonality, market, trends, etc. Make a point to run reports at least quarterly adjust your menu and purchasing accordingly in order to keep your costs low and profitability at its peak!

Reducing WasteI spend the majority of my days talking with restaurant owners and their teams about the challenges they face in their operations. As most weeks go; I had a lot of conversations about managing food cost and narrowing the gap between Actual and Theoretical food cost.

There are many reasons for this variance – this week’s Hot Topic was waste. How to avoid it – and, how, when it can’t be avoided does one account for it. There are couple of things you can do here:

Write out your recipes to account for waste. If you purchase whole, fresh turkeys and roast them on-site. Understand that just because you bought a 17 pound turkey does not make 17 pounds of usable bird… probably more like 11 or 12lbs. Account for the yield and base your plate cost on the portion that actually makes it to the plate.

Start a waste journal. Let’s face it – accidents happen. Strolling out of the walk-in with a gallon of Ranch in my hands… get caught up on my own inability to be graceful and watch as the Ranch hits the floor. If there is a waste journal, that Ranch can be accounted for – be sure to leave a field for the reason the product was wasted.

End the over-prepping. At some point, over prepping is unavoidable. However, if my trusty waste journal tells me that I am throwing out gallons of fresh salsa every two days – there is a problem in the amount of salsa I’m prepping. A lot of operators would rather have too much than not enough – and I completely understand that… however, you could liken over-prepping to taking money outside and lighting it on fire.



controlling costs

Reducing Labor CostsLabor scheduling is one of the most challenging aspects of running a restaurant. Restaurant margins are slim and labor costs are large. Here are a few tips on how to save money by scheduling wisely.

Enforce clock in and out timesYou already know that you don’t want your employees clocking in late because it creates a flustered work environment, and causes specific issues such as a lack of prep work. Late clock ins can also result in overtime paid to earlier shift workers who must stay on at least until the late employee arrives.

Another, often unnoticed cost is employees who clock in early. If you have 25 employees who clock in 10 minutes early and make $8.00/ hour, that’s $33.34 in additional wages per day, or $12,166.67 per year! If you think that this doesn’t apply to you because the tipped minimum wage is in effect in your state, think again - you are still looking at over $3,000 for those same 25 employees clocking in 10 minutes early. So, lock down your POS so that employees can only clock in within 5 minutes of their shift starting.

Look at forecastsYour manager may have a great intuition about guest and sales volume, but historical trends will show you the actual data so you can be better informed when you build your labor schedules. Look at trends for guest count, projected and historical sales, weather, special events and other factors to determine the appropriate levels of staff to have on hand for the day of business. Schedule templates are often handed down from one manager to another with no revision in between to account for seasonality. On the other hand, current employees or historical trends to make an accurate prediction. In today’s technology driven world, you don’t have to guess anymore – the data is all right there.

Automate employee schedulingTake the guesswork out of scheduling by having a system that can track all the above information for you and more. This will save you employee labor hours and dissatisfaction, as well as your manager’s time building a schedule. Reducing Energy CostsReducing energy use not only benefits the environment by saving natural resources and cutting pollution, it also saves you money and increases your bottom line.



controlling costs

Institute a policy that all electronic devices, lighting and room cooling units be turned off when not in use and hang up light switch reminders to remind staff to turn off the same. Save energy and money by reminding staff and guests to be conscientious. This behavior can be reinforced with friendly reminders and appropriately placed signs.

Use task lighting instead of lighting entire area. Using task lighting over counters and cooking equipment instead of ceiling fixtures will keep kitchen staff from having to leave the ceiling fixtures on constantly during operating hours thereby saving energy and money.

Apply window film to reduce heat loss (or gain). Business and homes that have applied insulating film to their windows report a 35-50% combined energy savings per year.

Use weather stripping to seal air gaps around doors and windows. Sealing erroneous air gaps around windows and doors will increase your thermal retention allowing your HV/AC units to cycle less frequently.

Reduce dishwasher hot water temperature to lowest temperature allowed by health regulations and consistent with the type of sanitizing system you are using (high heat or chemical/heat). Reducing the temperature setting on your hot water heaters will not only allow their heating elements to cycle less often but it will also elongate the lives of those heating elements, which saves you money in both the current period and in the long term.



Inventory ControlInventory control is extremely important to a restaurant’s profitability. Knowing your inventory and understand-ing how it moves can improve how you order product, reduce waste, and help deter theft.

Yet, many operators find the inventory control process so time consuming that they continue to take risks by simply avoiding it. Taking inventory does not have to be an overwhelming task, however. Below are a few helpful hints of how to streamline the process.

Use the Pareto Principle. Also known as the 80/20 law, the Pareto Principle states that 80% of your sales should come from 20% of your menu items, and that 20% of your ingredients are responsible for 80% of your costs. Save time by only concentrating on the high cost and high turnover items.

Set a schedule. If you decide to broaden your inventory beyond the Pareto Principle, know that not all items will need to be inventoried at once. Higher volume items should be counted once per week, preferably at the end of the fiscal week so that it matches your P&L. Slower moving items such as cleaning supplies can be count-ed either monthly or quarterly. Those items are also easy to send someone to the store for, should you run out.

Organize like with like. Arrange your shelves, walk-ins, bar, etc., with similar items together. Group cans to-gether, bakery items together, meats together. If you have the space, take it a step further and organize beyond simply “chicken”, breaking the meat down by cut.

Build your sheet to shelf. Once your shelves are organized, you can create your inventory sheet to match it and increase your efficiency. Build the sheet so that the top-left of your spreadsheet is labeled the same as the top-left shelf, and continue left to right, then top to bottom. This will keep you from popping up and down as you work.

Divide and conquer. Print your sheets off by section and assign one person to the freezer, one to dry storage, one to produce, and so on. This makes the process quick, and easy on everyone involved.

Use the data. Check your inventory against data collected by the POS. Your physical count should match what would be left over after you compare your order invoices minus the sales that are shown in the POS reports. If they don’t, you need to ask yourself, “where did they go?”



Ordering and ReceivingIf you can get through to your next ordering day with no leftover product, no spoilage, and not having to 86 any menu items, then you are winning at ordering. However, this is hardly the case for most of us. Still, you shouldn’t forget that the way that you order, receive, and store product ultimately helps you to control your food cost. Here are some best practices when handling product.

Keys to Ordering Product:• Accurately forecast your sales. It is extremely important to look at last year’s sales each day to know

what to expect this year. You must also consider other factors, such as the current economy, local events, weather conditions, and local competition to name a few.

• Evaluate your needs. Take a look at your last order, do an inventory to see what you have on hand, then consider your sales forecast to determine where you need to be in next few days or weeks (when-ever your next order is; see below).

• Know the vendors unit sizes. How a product is sold can differ from vendor to vendor. Before placing an order, you should check to see the unit size – this might be “each”, case, bottle, container, pound, ounce, etc. It may be necessary to check your vendor’s terms to see if there is an extra charge to split a case, and to determine if this is worth it overall.

• Consider the timing of your order. The number of orders you place per week will vary based on your volume of sales and how much storage space you have. You should figure out what works best for you – do you need to bulk order dry goods, have seafood or other produce to coming every few days? Factors like these should be used to determine a regular schedule, based on your individual needs. The key to lowering your food costs is to keep your inventory as low as possible without running out of product.

• Have a backup vendor. No vendor can have everything you need, every time that you need it. It is wise to have a few backup vendors already lined up in case your delivery is short and that vendor can’t get more in quickly enough to accommodate your needs. Be sure to check your contracts with your prima-ry vendors first.

Keys to Receiving Product• Engage help. You will not always be there for every order. Train 2-3 trusted employees to properly

receive and store incoming product to ensure that it is done correctly, even in your absence. • Schedule deliveries wisely. Make sure to have your deliveries arrive when first authorized person is

there to sign for it. Typically, between 8:00 – 11:00 AM works best (though you should consider hav-ing a specific delivery time window added to your contract during the next renewal). Nothing is worse than having a truck at the back dock when the restaurant is slammed. Vendors sometimes offer “dark drops” outside your door for a discount. This is not recommended, because if nobody is there to check



ordering and receiving

the order for accuracy and quality then you may not be saving money after all.• Print the order. The person receiving the order should have a printed copy of the order with them

when checking it in. Going off the invoice reflects what the order contains, not necessarily what you ordered. If your order is shorted, you will want to know immediately so that you can contact a backup vendor.

• Open each case. It is important to check the count and quality of every item. Not every operator does this, so be sure to alert the vendor that you are planning to do this in advance, so that their drivers have ample time for you to review your order.

• Return unacceptable items. It’s okay to send poor quality items back with the driver. This is easier than accepting the item and trying to replace it after you have signed for it. Be sure to mark these changes on the invoice, and have the driver initial it to head off any possible discrepancies.

• Spot check weights. Pre-portioned items are convenient and cut out extra steps that you would had to have done in-house, but don’t let that put you too much at ease. Even the most trust-worthy vendors can over or under portion, which can throw off your consistency and/or food costs. A quick spot check now and then will make sure that you are getting what you ordered.

• Lock the back door. Make sure to lock the door at all times, especially after a new delivery when items are still boxed and in close proximity to the exit.

Keys to Storing Product:• Get organized. The time spent organizing upfront will pay off with the time that you save down the

road. Be sure that products have a permanent home to make them easy to find. Similar items should be placed together for easy unloading.

• Put everything away immediately. The same key employees who check in the order should be respon-sible for storing it correctly as soon as it arrives. As tempting as it may be to “deal with it later”, putting it off will only lead to spoilage, forgotten or misplaced product/boxes, or theft. Your employees learn from you how important a delivery is. If you don’t value what is in those boxes, neither will they.

• First in, first out. Be sure to have your staff place the new items behind the items already on your shelf to prevent spoilage.

• Limit access. Place expensive items in a secure area that only managers have access to.




Staffing Employee turnover in the restaurant industry is higher than other industries. While there are several reasons for the high turnover rate, a huge contributor to the churn is that teenagers and students – most with part-time status - make up the majority of restaurant employees.*

Did you know?• 1 in 3 restaurant employees are students. • Restaurants are the largest employer of teens. • 31% of the restaurant workforce is part-time.

Also, restaurants tend to hire seasonal help, increasing jobs opportunities by over 500,000 positions during sum-mer alone. The U.S. Census Bureau states that 31% of restaurant employees are part-year workers which most likely means that they are Millennials that are off school. Below are some tips on how to best manage Millenni-als and how to hire good seasonal help.

Reducing Employee TurnoverAlthough employee turnover may often be inevitable, here are a few ways to help reduce and slow down em-ployee turnover in your restaurant.

Training:Sufficient training for new team members is often underutilized and overlooked. Even though new employees may have serving experience, serving practice differs between all restaurants. It is important that your employ-ees feel comfortable with your floor plan, your menu, your point of sale systems, and navigating through your specific kitchen procedures.

Another great source of training is to allow your new hires to shadow and train with an array of your current staff members, rather than just one. This will provide them insight and tips that will help them run successful shifts once they are out of training, and will give them a better sense of your restaurant’s working ethic. Don’t rush the training process. Allow 5- 10 shifts of training. More times than not, the employee will let you know when they are ready to be on their own for a shift. If your employees feel knowledgeable, comfortable, and are provided all the resources necessary while working their shifts, potential employee turnover will decrease

Employee Incentives:Let’s be honest – perks are important to employees, no matter the industry. Restaurant jobs are exhausting and laborious. Employees are on their feet for lengthy times, working holidays and unusual hours, and constantly



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interacting with people, even on bad days. Adding some employee incentives into the mix will keep your em-ployees to remain enthused about your company and their job, and will help reduce employee turnover.

These don’t have to be free benefits and vacation days. Instead, how about discounted or free meals, contests with prizes such as pick your schedule or a weekend off, or even staff parties on closed days throughout the year? This will encourage continued team building and positive communication between all levels of your staff.

Open Door Policy:A restaurant cannot properly function without a strong line of communication and understanding between employees and management. Maintaining an open-door policy is key when striving to keep employee turnover down. Sure running a restaurant and dealing with staff is strenuous, especially when an employee approaches you during a busy shift, but if you do not allow for your employees to feel as though they can approach you at any time with questions, concerns or praises, they will ultimately be un-happy and their employment may not last long.

Re-iterate during pre-shift meetings, interviews and chats that, as a manager or owner, you are there for your employees, and you care about their continued happiness and willingness to work. There is nothing worse than when an employee does not feel comfortable to approach a manager about needing a day off, or information on work place fraud or harassment, amongst other things. In the end, utilizing the open-door policy will help you in more ways than just employee turnover.

Occasionally you will have those few rock star employees who will loyally stay employed for your restaurant. However, it is inevitable that you will witness a changing staff as time passes. Not all employees who enter the restaurant industry plan on staying in the industry. And even if an employee does wish to stay in the industry, not all plan to stay at one location for the entirety of their career. Since turnover is unpreventable, your next best option would be to take measures to help reduce the likeliness of this occurrence, where it is avoidable. The above 3 suggestions will not eliminate your employee turnover, but they will assist you in reducing it.

Managing MillennialsMillennials are employees born between 1980 until 1999 (some research extend this to include those born in the early 2000’s). They are typically seen as a self-absorbed, spoiled generation. This is believed to be a result of overly doting parents and the inundation of social media. But there are also very good qualities that come with the territory. They are optimistic, tech-savvy, multitaskers who believe in team work and community. They just need to be handled a little differently than we may be used to. Below are a few areas to think about when working with Millennials:



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Praise. Millennials crave more feedback and praise than previous generations. When the pace is fast moving, it can be hard to remember to single out employees, but a little goes along way. And after a little practice, it will begin to come naturally to yell “Great job on that big top, Alex!” All humans crave approval and want to be re-assured that they are valued, so creating a culture of praise will help with your overall morale of your restaurant – not just for the Millennials.

Structure. Millennials want to feel that they are being heard and that their opinions are valued. However, they were raised with busy schedules and high expectations to succeed. Let them know what is expected of them and the measures of success, then move aside and let them get there in their own way. Having conversations along the way to guide them along is very helpful but be careful not to over manage and stifle their creativity.

Teamwork. Working in a team environment is important to Millennials. Find ways to create a collaborative approach to tasks. Having a production line approach to rolling silverware or folding boxes may seem counter intuitive at first, but this approach can actually increase productivity since people tend to slow down over time when performing a monotonous task.

Community. Participating in community and/or charity events is important to most Millennials and is a good way recruit and retain them. They want to feel that they are helping out society. And, as a bonus, most busi-nesses see a good ROI on community events whether it be increased sales, new customers, or increased brand recognition.

Technology. This is a generation that has no idea what life was like before computers. Being raised with smart phones and social media makes them expect to have everything online. Creating a great interactive website, writing smart blogs on current trends, and having a presence on sites such as Facebook, Twitter, Snapchat, etc., can help attract new employees. Having smart systems in place once they are hired will help keep them. For example, if you have the financial ability, look into investing in systems that help automate everyday tasks such as scheduling. Having the ability to get their schedule, swap shifts, check their hours, and more will make their (and your managers’) job easier. Managing Millennials does not mean that we have to cater to them or throw out all you know about managing a restaurant. But with an average industry turnover of almost 70%*, we need them. Learning how to work with this generation is important to the success of our businesses. The more we get to know about how they work and what drives them will help attract them to our industry and keep them here for future generations. Perhaps we will learn a thing or two from them along the way as well!



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*According to United States Department of Labor’s Bureau of Labor Statistics’ Job Openings and Labor Turnover (JOLTS) program

Tips for Hiring Seasonal Employees• First, determine what shifts and/or positions you need to cover. This will help with hiring people who

are available to fill those specific gaps.• Check with your current employees to see if there are some who are willing to work additional hours.

Some might welcome this, knowing that it is temporary.• Ask your employees for recommendations. They may have friends or family that are interested in sea-

sonal work. • Post ads and signs early at local colleges. Seasonal jobs are a great fit for students looking to make

money while on break.• Hire based on personality. You want seasonal workers who are eager to work hard, are flexible, and get

along with your staff. These individuals should fit into your restaurant’s culture. Often, seasonal help will decide that they want to become full time employees, so hire someone that you want around long term.

• Conduct background and reference checks. Although not the norm, a temporary employee may not treat your business with the respect and professionalism that they would extend to a permanent em-ployer; this puts you at risk of theft or other misconduct.

• Treat seasonal help in the same manner that you would treat a permanent employee. While it might be tempting to cut corners knowing that these employees will only be around for a short period, do not put your business at risk by doing so. Most of the Human Resources guidelines and state laws re-quire that temporary workers are given the same benefits as full time workers.

• Keep seasonal employees’ contact information on file for future use. You will save time and effort hav-ing people who are already trained and ready to go when you need them.




Scheduling According to the Bureau of Labor Statistics, the national unemployment rate is at its lowest rate in a decade

at 4% but the hospitality industry’s current turnover rate remains high at 73%. There are many reasons why employees cite leaving their jobs but pay and hours consistently make the list. The restaurant industry needs to change this statistic by building a better schedule to improve employees’ hours; it’s a strong first step toward better employee retention.

Let’s face it, one of the biggest pains for management no matter the size, style or location of the restaurant, is creating and maintaining employee schedules. Whether it’s one person’s job or a shared responsibility of the management team, it is important to utilize a consistent form of scheduling to ensure that your staff can work the hours they need in order to receive the pay they expect. Here are a few best practices for creating your schedules that will save you money and time, reduce the stress of creating schedules and improve employee retention.

Develop a standard scheduling style. First and foremost, choose your standard schedule style. This is what your staff will become familiar with and it can be very difficult for employees to follow if it changes often.

For smaller restaurants, you can create one core schedule. This will work just fine if your staffing levels are low on a daily basis.

For medium and franchise restaurants, you may want to create two schedules: one for your day shifts and the other for your evening shifts. Splitting shifts makes the schedule easier to build and manage for managers and easier to read for employees.

For larger restaurants with high volume and staff, try can create sub-categories of your schedules. You might want one for front of house employees, for example, and another for your back of house employees. To really clean up your schedules, you can also filter down into day-part and job function. For example, you might make a precise AM Server Schedule alongside a PM Server Schedule. No matter the style of schedules you choose to make, it is important to keep that style consistent to eliminate any errors or oversights.

Create consistent schedules. An inconsistent schedule is disruptive to work/life balance. It means that employees are not able to make personal plans until after the schedule has been posted. Even accomplishing mundane tasks like organizing a dentist appointment or having the car serviced has to be put on hold, which causes undue stress and resentment towards work. Set a firm date and time that schedules will be posted by to create a routine and stick to it.

http://www.bls.gov/news.release/pdf/empsit.pdf

http://www.bls.gov/news.release/pdf/empsit.pdf

http://business.dailypay.com/blog/staff-turnover-rates-hotel-motel-hospitality-industry



scheduling

Improve your forecasts. You may have a great intuition about guest and sales volume, but historical trends will show you the actual data so you can be better informed when you build your labor schedules. Look at trends for guest count, projected and historical sales, weather, special events and other factors to determine the appropriate levels of staff to have on hand for the day of business. Schedule templates are often handed down from one manager to another with no revision in between to account for seasonality. This can lead to employees’ having stressful shifts due to understaffing or them being cut early and losing pay due to overstaffing. In today’s technology driven world, you don’t have to guess anymore because the data is easily available.

Schedule to preferences. An employee with young children may not want to work every weekend, while someone in school may not be available on any given weekday. Identifying what people’s preferred work schedules are and doing your best to adhere to them can go a long way towards employee satisfaction. Furthermore, you are less likely to have someone no-show or call in sick if they are scheduled for a shift that they want to work rather than one that they must work.

Honor time off requests. Working holidays is something that many restaurant employees and their families have become accustomed to, but other important events come up too, like weddings and birthdays. Accommodating requests off to allow your employees to have a life outside of work goes a long way towards employee satisfaction.To save yourself trouble when it comes time to building your schedule, create a few rules for requests off. For example, you might look at rules such as lead time. This can include stipulations like ‘requests must be submitted 10 days out of the shift in question’, or ‘employees cannot swap shifts with 12 hours of the start time’. You can even note blackout dates where employees cannot request dates off. Holidays are especially troublesome when it comes time to scheduling, and by blacking out Christmas Eve or Valentine’s Day, you can control the intake of requests much more easily and review them on an individual basis.

Give employees some control. Automating your schedule makes them more easily accessible, gives employees empowerment, and reduces the burden on managers. Often, someone needs to swap, drop, or pickup shifts. To tackle this, you might consider using a shift trade book or posting, where employees can self-manage these activities. This has the knock-on effect of allowing the manager to approve all changes in one place. A scheduling app can prove the best way to easily manage and maintain this process.

While having adequate staff on hand to accommodate your guests is your top priority, keeping your staff happy is a close second. It is expensive and time consuming to hire and train new employees. Good scheduling processes can positively affect employee satisfaction which ultimately impacts your bottom line.




U.S. Labor Laws and Regulations ComplianceJust as you would trust your health with a doctor, the government trusts restaurant owners with labor integrity. But according to the Economic Policy Institute, in investigations of over 9,000 restaurants, the U.S. Department of Labor (DOL) found that 84 percent of investigated restaurants were in violation of wage and hour laws. This creates a potential catastrophe for the restaurant industry in not only having disgruntled employees, but also creates potential lawsuits.

So how do you ensure your restaurant is in compliance with U.S. labor regulations?

Know the difference between Labor Laws and Labor Rights.Labor Laws- These laws originated to protect employees from unethical work and compensation correlations. Labor laws vary around the world in complexity and amount. The industrial revolution and its uncanny working conditions were the main ingredient to the tough U.S. labor laws that exist today. Key labor laws address items such as number of hours an employee can work, ages for employment, medical leave acts, and minimum compensation. Additional state and local labor laws may also exist that pertain to particular wages and working conditions.

Labor Rights- Labor rights are similar to labor laws; however, labor rights provide employees with security. These rights include the right to breaks, the right to report unhappy working conditions, the right to timely pay and, most importantly, the right to unionize. Thus, allowing for the democratic voice of workers to their employers. Labor rights are a necessity to ensure labor laws are being obeyed.

Be aware of the Laws and Rights.Labor laws and rights are constantly evolving and multiplying. Stay on top of these. Knowing these laws and rights will be the key to avoiding violations such as the ones our friends in Austin received. The United States Department of Labor website is a great resource in aiding in this knowledge. Keep updated prints of the labor laws and rights posted throughout your restaurant. Have your team and managers review these so that they can discuss them with employees.

Listen to Your Employees.No one will pay more attention to laws being obeyed and rights being addressed than your employees. Wouldn’t you want to make sure you were receiving the right pay, benefits, and breaks that you were entitled to from your work? If an employee voices concern, take the time to investigate their claim. It is best to identify the error

https://www.epi.org/blog/seven-facts-about-tipped-workers-and-the-tipped-minimum-wage/



labor law compliance

and correct it. Even if the claim turns out to be erroneous, it is better to investigate the claim than it is to be out of compliance.

Audit Yourself.There are many different auditing platforms out there you can use as a resource to ensure compliance during the year, such as software programs, consultants, and third-party labor contractors. These platforms may come with a sizable expense; however, in relation to the cost of violations and back pay, this expense can be microscopic.

U.S. Labor laws and rights are vastly complex and at times rather tedious. However, without our employees, we would have no business. To keep our employees, we must compensate them according to their work. The government recognized this when they created the modern labor laws in the 19th century. Now we are trusted to protect our employees with these laws and rights. In return, our employees can trust us.




Deterring Employee Theft Unfortunately, in the restaurant industry where there is access to food, liquor and cash, there is often room for fraud. If left unchecked, this can have a detrimental effect on your business. There are many ways that employees can utilize this to their advantage to take product or money from your restaurant. However, there are also a few simple best practices that you can use to monitor your business and deter theft in your restaurant.

The best thing you can do to deter employee theft is to have a trustworthy manager on the floor monitoring the day-to-day activities. The more the manager is on the floor and involved in service and inventory, the less likely you are to experience theft. You can also institute some simple procedural policies that can make a measurable impact to your bottom line.

Lock down your POS. Don’t allow employees to transfer checks, or to apply comps, promos, or voids without manager assistance. Culpability for items rung in decreases the likelihood of comp, void, and promo abuse.

Provide manager POS cards. Rather than allowing managers to login to the POS using a pin number, require an identification card for login so that employees can’t simply memorize the manager number and avoid asking for assistance. Furthermore, ensure that all manager cards are assigned and utilized correctly.

Define timeframes. Institute a policy of applying comps, promos and voids to the check before the guests close out, rather than splitting the items off to comp later. Don’t allow employees to save all of their comps, voids and promos until the end of the night, when there is no longer a way for them to prove that Table 31 sent back their chicken salad.

Create individual accountability. Hold each employee responsible for their POS activity by having individual logins, rather than generic logins such as “BAR,” “TOGO,” or “CASHIER.”

No ticket, no service. Have a floor manager spot-check tables and the bar throughout the shift, to ensure that all self-service items are rung in before going out to tables. Similarly, never allow items to leave the bar or kitchen without the item being rung in through the POS.



Staying Relevant Savvy business owners know that you must constantly improve your restaurant in order to stay relevant in this ever-changing market. You need to always be aware of what the consumers want and where the industry is headed. Make a point to shop your competition often and then take an unbiased look at your restaurant and try to see it from your customer’s point of view. How do you compare? Are there any areas for improvement? Are your sales increasing, decreasing or stagnant?

Below are suggestions on how to shop your competition and then how to make necessary changes to your menu and/or venue when the time comes.

Shop Your CompetitionKnowing your competition and what they offer is just good business. While it is said that “imitation is the sincerest form of flattery,” this is not necessarily true with a direct competitor. Instead, you should visit competitors to understand what they offer and how they offer it. This will allow you to learn from them, and to differentiate yourself from them. In turn, this helps you better understand both your similarities and differences so that you can find your niche.

Here is how to shop your competition effectively:

Look at their website. How do they position themselves? What kind of feedback do they get from customers? Do they have a blog? How about a newsletter? If so, subscribe to their newsletter to keep on top of their ongoing marketing efforts.

Observe their customers. Are the customers similar to yours, or the type of demographic you pictured when you opened your doors? If so, can you pinpoint where you are missing the mark of getting these folks through your doors? If not, identify what makes your restaurant interesting to a different demographic and play it up!

Watch how their employees behave. Are they friendly and engaged? Are they working as a team and helping each other out? Are they running each other’s food and filling drinks? These behaviors play into the overall dining experience of your guests.

Note their menu offerings and pricing structure. How is it different from yours? Price is typically not a deal breaker if there is perceived value in the product. Customers appreciate value, and are willing to pay for it; but if you are offering a similar product and your prices are not in line, it will be noticed. If you can’t match their pricing, then focus on value.



staying relevant


Check out the technology are they using. This applies only if it is in plain sight. Are you familiar with the systems? Get online and compare it to what you use, and see if the technology is giving them any type of competitive advantage.

Lastly, keep in mind that even if they are your greatest competitor, they deserve to be treated with respect. The intention of shopping your competitors is not snooping or trying to dig up dirt. The goal is to understand your similarities and differences in order to improve your performance, not diminish theirs.

Updating Your MenuFood is like fashion – it changes over time. And while you don’t have to dive into every foodie fad out there, you do need to be flexible to keep up with the times. What once worked may now no longer be relevant.

Here are a few ways to make sure that your food offerings and prices are in check:

Tread lightly on the top sellers. These are the items that bring people through the door, and keep them coming back. If you are not making a decent profit on these dishes (food cost should be around 30%) then you might need to rework the recipe, portion, or price. But be prepared for a little backlash, as people do not typically like change. Remember, it is alright to tell regular guests the reason behind the change. For example, most reasonable people would understand an explanation such as “with the spike in oil prices, we can no longer keep Chilean sea bass on the menu at a reasonable cost to you, so we have replaced it with a fresh water white fish that we procure locally.” It is hard to argue with the truth.

Reconsider low selling and/or low profit items. Look at your sales reports to see what is not selling, and what is not bringing in a profit. These items need to be removed from the menu or have the recipe reworked. Should you not be able to part with an item and choose the latter, be sure to let customers know it is “improved,” or change the name of the dish so those who didn’t care for it before may give it another chance.

Talk to your customers. Do table visits. Let them know you are looking to refresh your menu, and you would value customer input. Ask what they enjoyed and what they didn’t. What would they like to see on your menu? If you want a more honest opinion (or you don’t have thick enough skin to hear some negative feedback) consider comment cards. Since people tend to be less honest if they have to give a negative review to your face, you may receive more useful information with a comment card option. Make sure your servers personally ask each guest to fill out the card at the end of the meal – you will get more responses than if they are just left on the table.



staying relevant

Know the difference from a fad and a trend. The difference between these two is usually the amount of time they stick around. For example, everyone might be offering bacon-infused chocolate desserts right now, but in a few months there will be a new twist on flavor fusions raging through the industry. However, the organic eating trend is here to stay for those who have embraced it. This crowd simply will not decide one day that pesticides or GMOs are not so bad. When trying to stay up-to-date in the restaurant industry, it is more important to follow trends than fads, and it will reduce how often you need to rework your menu.

Test weekly specials. Trying out new menu and drink items as specials is a safe way to see if they will be embraced by your customers. You can phase these in gradually – Vietnamese sandwiches only available Friday through Saturday, or curry night every Tuesday evening, courtesy of your new chef. This gives the impression that these dishes are truly specially crafted, and you may even find guests asking if they will become available on the regular menu. Show behind-the-scenes kitchen work on your social media, and get people talking.

Refreshing Your Restaurant Sometimes even the most beloved establishments need a refresh. Failing to do so can make your restaurant feel stale and dated. It could be the reason that you are losing (or not attracting) customers. Here are a few ways to improve your brand:

Décor: Has your customer base grown or changed since you opened your doors? Are you attracting the types of crowds you desire? Décor that may have worked when you first opened may now be dated. When was the last time you updated the look? It may be time for fresh lighting and fixtures, upholstery, paint, window coverings, and/or uniforms.

Lighting and music: Lighting and music both make a huge impact on the dining experience. Low lighting and soft music encourage diners to be more relaxed, enjoy the food, and stay longer. Bright lights and fast/loud/upbeat music stimulates diners and encourages them to eat faster. Be sure that your music and light match the atmosphere that you are trying to capture.

Technology: While you may not think that technology and brand have any ties, they do. Consumers (and employees) are so used to new technologies that they are now expected. They want the entire dining experience to be perfect. This includes everything from reservation to quick payment. Don’t let dated technology effect the dining experience.

Employees: Are your employees just phoning it in? Great service is what keeps customers coming back. It could be time for some re-training to make sure that your staff is meeting your service expectations. Many



staying relevant

restaurants hold weekly or monthly contests that engage and encourage staff in a fun way, while also boosting sales.

On a final note, don’t overlook refreshing your restaurant because it seems too expensive or exhaustive. It does not need to be done all at once. Just start with one of the categories above and keep moving forward. Keep what is working and update what is not. And as far as the cost? Well, the price of not keeping a fresh and relevant brand can certainly end up costing you more in the end through loss of revenue and profitability.



Increasing SalesWe all want to increase our sales. Getting new customers in the door is certainly one way to do this, but did you know that there are several ways to increase sales with your existing guests? Below are three ways to use your data to start increasing your profitability.

Evaluate Server Performance: A Server Performance report is a comprehensive summary of critical information related to employee sales, labor, and productivity. More than a basic assessment, this allows you to schedule your top performers on your busiest shifts, and to have those servers who might need help follow one of your superstars to learn how to sell better.

The WIIFM (what’s in it for me?) for your staff is that increased sales means increased tips for the lower performers. They are already there, so why not make more money? You can also consider offering the star performers an incentive for letting others shadow them, such as a comped meal or a $20 bonus.

Below is a sample taken from a group of employees showing a high, medium, and low range of selling levels. It demonstrates how increasing dessert sales of only 3 servers can grow your sales by $18,388 per year, while considerably increasing your servers’ income at the same time. Numbers don’t lie… it’s a win-win.



increasing sales


Evaluate Comp Analysis: Take a good look at your comp analysis report to understand where you could be losing money. For example, if you have too many Kitchen Comps for either long wait times or food going out incorrectly, it may mean it’s time to the re-evaluate the number of scheduled staff based on volume, or retrain the back-of-the-house on expected standards. Likewise, an unusual amount of Service Comps may mean it’s time to the re-evaluate the number of scheduled staff based on volume, or retrain your servers on expected standards.

While a few comps here and there in a shift may not seem like a big deal, take a look below at how solely Estela’s poor performance equals $4,003.22 in lost sales per year.

Item Analysis: By using the “Four R’s”, you can determine whether to retain, re-think, reprice, or re-plate, based data that you most-likely have already collected. Use an item analysis report to compare an item’s margin vs. quantity sold, allowing you to determine if items are priced correctly.

• Items with an above-average margin and an above average quantity sold are ideal, and should be retained

• Items that have a below-average quantity sold and a below-average margin may need to be re-thought.

• All other items (items that are high-quantity/low margin or low-quantity/high margin may need to be re-priced or re-plated.

Below is an example of how to evaluate your dessert menu.



increasing sales

We all know that this is a tough business, so it’s important to make the most out of every interaction. By studying your numbers, you can always find areas for improvement. Start with these three analyses and branch out from there as you start to better understand what is really happening in your business.




Expanding Your BusinessOnce your first location is profitable and running smoothly, you might begin to consider expanding your business into a second (or even third, fourth or fifth) location. It is often assumed that additional locations will open and operate exactly like the first one, but that is not usually the case. If expansion is in your future, here are a few tips to consider:

Determine your goals. Do you want to expand your current success to a new location or venture out and try something new? A replication of the first concept is considerably easier since you have experience under your belt. If you decide that this is the best route for you, then it is important to keep everything as similar as possible. People who know your brand will be disappointed if it does not match their expectations.

If you are opening a completely different concept – or even just venturing out to a different city – your idea may need to be tailored for the different market. If the new demographic demands a vastly different menu, décor, and/or service style, then consider a second brand to avoid diluting your original concept.

Also, consider how you want to set up the businesses. Some restaurateurs prefer to run each location as its own, independent business, but others may run multiple locations as one business – sharing employees, inventory and incentives among them. Decide which is best for you and your goals.

Create a business plan. Just like your first business, the second one must be thoroughly thought through. Whether you are replicating your current business or trying something new, you need to do your due diligence. Do not assume that you can merely duplicate the first restaurant and double your profits; from different staff to local competition to a different climate – there is always something new to consider.

Secure your funding. Ideally, the profit from the first location will pay for the second location – but this is not a deal-breaker for expanding. Many successful restaurateurs have borrowed the money to open their businesses. If you do require a loan, the success of the first restaurant will help considerably in securing funding.

Make sure that you have the proper people and processes in place. You cannot be in two places at once. The new business will require long hours so you will need to be sure that the first location is set up to run smoothly in your absence. If you don’t already have one, start by hiring a manager that you can trust to run your business on their own while you are away. This person needs to be someone who shares your same business and ethical values, and that you know can make important decisions on your behalf.

You should have proven processes and procedures in place at your first location before you open any additional



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sites. These could include (but are not limited to) human resources practices, including hiring, training, payroll, terminations, etc.; as well as operational procedures that include opening/closing check lists, running the kitchen, inventory management, accounting systems, invoice handling, and so on.

Consider your software choices. Along these same lines, having the same software in place at both locations will save you time and give you peace of mind. The new location is typically not a good time to try out software or systems that are different than the first location, as they can double the amount of back-office work. You also want to avoid learning on the job – being able to compare sales, spending, payroll, etc., will allow you more time to focus on the business, not the paperwork.

Expanding your business can be an exciting and fruitful endeavor if you are mentally and financially ready for the challenge. Good luck!




Building Customer LoyaltyAnyone in the restaurant industry has felt the satisfaction of seeing return customers walk through their doors – it’s the feeling of appreciation, accomplishment, and gratefulness. Those feelings are well-placed, because those return customers spend an astonishing 67 percent more than a new customer during a visit!

Increasing customer loyalty increases profit. If you already weathered the hardest part of getting the customer through the front door for the first time, boosting your customer loyalty seems like a no-brainer, especially with these helpful hints:

Consistency. Consistency is king in retaining customer loyalty. Make sure your customers are receiving the same experience and products that they received the first time they visited your restaurant. More times than not, customers return to a restaurant to quench a craving. If that item was enjoyed the first time, most likely the customer will return for that very same item and experience again. This means ensuring that you keep popular items on your menu and are enforcing adherence to the recipe. However, less obvious factors should not be overlooked. You should also maintain the presentation of the dishes, the cleanliness of the venue and the quality of service.

Employees. Chances are you have had an awful service experience in a restaurant or bar. Perhaps you were sat but not greeted in a timely manner; perhaps your server was unfriendly, the staff didn’t know the menu, or the food took unusually long to come out. These instances – all in the hands of your employees – set the tone of your restaurant, and can be very detrimental when it comes to getting your customers to return. You should take the time to make sure that employees are properly trained, and that you clarify your expectations as well as their responsibilities. Teach them to leave their baggage at the door and to come to work with a positive attitude. Staff that appears knowledgeable and effective will without doubt be recognized by your customers.

Millennials. Millennials (16- to 35-year-olds) now outnumber baby boomers (51- to 69-year-olds) as the largest generation group in the U.S. These millennials are constantly on the go, and eat out on average 4-6 times per week. Catering to this age group can be very beneficial in creating long-term customer loyalty. Millennial culture has significant differences than that of the baby boomers, and not all of them are obvious. If your brand allows for it, hold events such as concerts or karaoke, create menu items such as small bites, and adjust hours of operation to be a bit later some nights. All the above attracts the millennial mindset.

Incentives. Incentives and loyalty programs are becoming increasingly popular, especially amongst the millennial crowd. As this crowd’s lifestyle is cultured around social media and technology, many incentivizing programs can be done simply through e-mail or text messages. Punch cards, coupons, point systems and even



building customer loyalty

exclusive products can also keep your customers coming back. Incentives and loyalty programs are relatively inexpensive in relation to the cost of acquiring new customers through marketing and advertisement.

Finally, you. As restaurant owners and managers, it is important to be involved in your day-to-day, on-site operations. Customers like to see who they are giving their money to. Take a lap around the restaurant, stop by and ask how a meal is, offer a free desert for an Anniversary or Birthday, engage with your employees. Customers remember these small gestures. It may take a moment or two out of your busy day, but the results of that gesture can be extremely valuable the next time those customers are deciding on where to eat out or suggest to a friend.

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