Restaurant Revenue Loss

Restaurant revenue loss occurs everywhere in the restaurant

cash in the trashTraining 
No training program, employees thrown to the wolves. This happens more frequently than you think, even in the corporate restaurants. How do you expect the employees to follow your established policies, procedures and house rules without the proper training? Sometimes we depend on other people to help us in making sure the employees are trained correctly and consistently. Sometimes the people we depend on are the problem.  Create an awesome training program, train management and train the trainers. Set high standards, hold people accountable when those standards are compromised. Assign someone dependable to consistently monitor employee training. This person will personally be involved during every employee one and one session during the training process. This training manager will periodically report back to the Owners, General Manager or District Manager about the employee training progress.

Bad hiring practices 
Sometimes we hire people on the fly to fill in a position, maybe because we do not want to work that position. Hiring someone to fill in a spot is not the solution it is part of the problem. Set a written hiring standard that you want everyone to follow that includes reference checks. Create a written cheat sheet with pertinent questions with answers to test the applicant’s knowledge. Never hire anyone during this process even if the applicant seems to be a top performer. The applicant told you what they were about, now you need to verify that information through the use of a job and personal reference check.  After you interview all the applicants, meet with the other managers to discuss the outcome of the reference checks and to decide who would make the best fit.  Hire top performers.

Employee theft
I hate to tell you, no restaurant is immune to employee theft. Theft comes in many forms and places,

Voids 
A guest paid his bill in cash and the employee did not close the check out. The employee or manager removed an item off the guest check after the guest left and closed the check out to cash and pocked the difference. Your POS system has functions to track sales and irregularities.  All voids should have two signatures on it, the employee and manager’s signature.

Coupons
Some employees will cut out of the newspaper restaurant coupons. A customer will pay their check with cash and the employee will not close out the check.  The dishonest employee will apply a restaurant coupon that they cut out of a magazine or newspaper to that customer’s check, then cashing it out and pocketing the cash.   Periodically inspect every server check pad looking for lose coupons; you will be surprises what you may find. When redeeming coupons this needs to be a manager function, the employee signs the coupon slip and the manager signs the coupon slip. This reduces the chance of theft when there are two signatures on the slip. Upper management should periodically audit voids, coupons, under-ringing and no-sale ringing slips to ensure this procedure is consistent.

Under-ringing the register
The person assigned to the register rings in the entire order at a lower price, although the guest paid full price. The cashier pocketed the difference. Some professionals are very good at hiding or camouflaging the customer’s digital readout screen showing the actual price of the product. These individuals may try to disconnect the power to the digital readout screen. Conduct an unannounced cash register audit on the suspected employee. Question the employee in private about the drawer overage or shortage. Never accuse the employee of theft without proof.  Having a witness or a video tape of the theft is still not proof. Get the police involved and let them decide if there is a case or not.

No sale ringing
The individual assigned to the register maybe working from an open register drawer, never ringing in the product but collects the cash. Way before the shift is done the cashier will skim the register with the sales that was not rung in creating an inventory loss or cash loss. Conduct an unannounced cash register audit on the suspected employee. Question the employee in private about the drawer overage or shortage. Never accuse the employee of theft without proof.  Having a witness or a video tape of the theft is still not proof. Get the police involved and let them decide if there is a case or not.

How to pinpoint areas of opportunities?

  1. Conduct a restaurant assessment inspection during an announced restaurant visit. I mean don’t tell anyone including management. The element of surprise will yield you valuable information and insight about your restaurants operational aspect of the business. Have you ever wondered while you were out of the restaurant, if management was doing the right things for the right reasons? Realistically, restaurant owners want their restaurants to run efficiently weather the owner is present or not present. Restaurant owners spend a great deal of money on training managers on how to run a restaurant effectively and profitably.   It makes perfect sense to periodically inspect the restaurant, management and staff members to ensure policies, procedures and house rules occur consistently from shift to shift and day to day.  Utilize the restaurant assessment form to assess your restaurants financial/operational part of the business.

Do frequent cash register audits both on management and staff members. The surprise of element is number one. Always do the cash register audits unannounced.

Conduct 2 interviews per candidate, one owner/manager does the first interview and a different owner/manager does the second interview. Utilize a second pair of eyes and ears to get a better perspective on the candidate.

Always conduct previous job reference checks by phone or mail. If the employee is dealing with cash or sensitive material then it might be a great idea to have a criminal background check done on that candidate. Furth more you might want to go as far as a credit check, why? If the candidate cannot manage their financials how can you expect them to run your restaurant?

Hire quality top performing employees. Remember this, always hire “CREAM OF THE CROP

It’s your restaurant hire whoever you want just remember everything you do will affect your bottom line.

Use the restaurant action plan to correct any issues found during the inspection.

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