Restaurant Operations

Why is my Restaurant Losing Money?

Restaurant Assessment

Restaurant Assessments

Restaurant assessment

There are literally hundreds of reasons why your restaurant may fail.

59% of start up restaurants fail with-in the first 3 years.

  • 26% the first year
  • 19% the second year
  • 16% the third year

You work very hard all day/night, things are not going as planned. At the end of the night you lay in bed thinking about why is my restaurant failing?

You are thinking about what went wrong, what is causing my restaurant to lose customers and revenue?  Employees are not performing per standard, customers are complaining about their service and I don’t see familiar faces in my restaurant which may indicate that my restaurant is seeing very little repeat business.

Let’s get to the meat and potatoes, why is your restaurant losing money? My answer is, I really don’t know without doing some sort of a restaurant assessment.

You or a professional restaurant consultant can perform a restaurant assessment in-order to pinpoint what the issues might be.

The restaurant assessment is divided into several areas:

Operational

  • Training: All positions.
  • Service: Front of the house, steps of service.
  • Service: Back of the house.
  • Food preparation: prepping stages, holding stages.
  • Food delivery.
  • Timing of food: from the minute it is ordered until it is delivered.
  • Time and temperature.
  • Flow of food.
  • Manager and employee professionalism.
  • Manager Interaction with customers and employees.
  • Manager table visits.
  • Food safety practices.
  • Sanitation practices.
  • Restaurant safety.

Financial

  • P& L Monthly/Yearly.
  • Food and Labor cost percentages.
  • Prime numbers: Food and Labor cost are the 2 biggest areas of the financial pie.
  • Customer counts.
  • Menu cost effective analysis.
  • Unannounced safe audit.
  • Petty cash fund.
  • Unannounced cash register audit
  • Verification of all deposit slips.
  • Manager, server or cashier voids, coupons, comps or no sales at a glance audit

You will be able to narrow down possible reasons as to why you might be losing customers and revenue in your restaurant.

The financial assessment will tell you where you are losing money and who might be responsible.

Employee related revenue loses whether it is theft or it is a training issue is a common occurrence in most restaurants. In-fact 70% of restaurant revenue losses are employee related.

Yes, an assessment audit may take anywhere from several hours to a half a day to complete.  At-least when you are done with the assessment you will have a better idea where your issues might be.

What’s next?

Action Plan

Once you have an idea of what your issues are, then you can begin to correct the problems. Utilizing great tools such as an action plan will allow you to document the issue, assign an employee to implement and monitor the fix.

Introduce a positive, but firm action plan. Make sure you give reasonable expectations and time line of when the issue needs to be fixed by. The owner or general manager needs to monitor the situation to ensure that management follows through on the action plan.

Have a weekly meeting and ask for input, discuss the previous week’s issues or what went right. A second pair of eyes may see what you cannot.

Make sure you convey to management and to your employees that you are serious about turning your restaurant around, hold your employees accountable.

For more great information, visit:

http://www.workplacewizards.com/

For quality restaurant forms, checklist and spreadsheets, visit: http://www.workplacewizards.com/restaurant-form-2/

Restaurant Self-Assessment:http://www.workplacewizards.com/restaurant-self-assessment-3/

Restaurant Self Assessment

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