Restaurant Operations

Critical areas that will either make you or break you

1. Food Cost Management and Bench Mark Percentages

Both management and staff members should be thoroughly educated in food cost management.  Proper prepping procedures, correct food portioning weights and food safety controls are a few areas to be concerned about.  Other areas are: server training and kitchen training. Servers need to know the fundamentals in serving customers and the cooks need to know how to cook and how to proper plate the food for plate presentation.

The food Cost formula is (Beginning Inventory + Purchases) – Ending Inventory on Hand = Cost of Goods Sold (COGS) then COGS / Food Revenue = Food Cost Percent. Monitor and react in food cost awareness per shift. Never batch cook, estimate how many portions do I need all day for the tickets that are hanging?  Standard food cost percentages for fast food type restaurants 25% to 30% everything depends on the menu mix and the restaurant style. Try to do an inventory at least once a week, if you are not doing inventories I will guarantee you that you are losing money somewhere. You will lose less money by doing weekly inventories because you are catching lost revenue quicker, than identifying what the issues are and correcting them.

2. Labor Cost Management and Bench Mark Percentages. When creating your schedules, remember your busy times. In the food industry, we call it meal time peak periods. It would be your busiest times for breakfast, lunch and dinner. Monitor labor cost per meal period hour by hour. Teach all managers, supervisors and key holders, labor cost awareness. Managers should on the hour monitor labor by retrieving from the POS the labor summary report and the restaurant total sales. The labor cost formula is:  Total dollars spent on labor divided by restaurant sales. Hold your restaurant managers accountable.  Send employees home or put them on break during your off peak times. Give the employees extra work assignments such as detail cleaning when it is slow. Fast food restaurants can achieve labor cost as low as 25 percent, while table service restaurants are likely to see labor in-between   30% and 35 %. Know what your labor cost percent is and hold management accountable when that goal is not reached. Teach management, labor cost awareness.
3. Equipment Functionality and Employee Position Training. It is very important that the entire restaurant contain functionality. All equipment placed in areas where it makes sense for functionality.  If you have a two person window selling point in the kitchen, then person number one in window one would have a grill and fryer and the same goes for person number two in window number two a grill and a fryer. There are two reasons for this setup, to prevent the cooks from reaching over each other and having to selling points, the customer tickets would be divided by two. As the kitchen tickets print up on the printer, the window number one person will take that ticket and place it on the rail to be prepared. The very next ticket that prints, the window one cook will give that ticket to the window two cook to prepare, tickets will alternate between the two windows to cut down long ticket times. This method should be used during peak times and most weekends depending customer counts and labor cost percentages. Remember to carry out and remakes are priority tickets to be prepared.
4. Management and Staff Training. Quality restaurant management training is the most important thing that could happen for your business. Mangers can either make or break your bottom line and restaurant. Hold your managers accountable in your policies, procedures and house rules. Train your managers to be you (personal ownership). Management Training
5. Management and Employee Accountability. Always hold your employees accountable, strive for excellence.  Use manager performance evaluations, manager 360 feedback forms, employee performance form, restaurant action plan, employee write up form and employee corrective action form.

For more great forms, checklists, quick reference charts, spreadsheets and training manuals: http://www.workplacewizards.com/employee-write-up-form-2/ 

Restaurant revenue loss occurs everywhere in the restaurant

Training 
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.