Cash Control and Food and Drink Waste Control

October 19, 2017July 5, 2013 by Donna Schim

Cash Control and Food and Drink Waste Control

The subject of cash control is a critical one in the restaurant business. To put it simply, the less hands that are involved with the cash, the easier it is to control. This also lessens the opportunities that people would have to steal any money.

Cash Control

It is important to get a reference and background check done on any person that will be handling the money, whether it is a manager or a cashier. There is a fool proof procedure, that if followed correctly, will make it impossible for anyone to steal money from the cash drawer. When the drawer is first given to a cashier at the beginning of their shift, the cashier should verify the drawer funds in front of the manager. The money should be physically counted. Then the cashier will sign a sheet that says they are accepting the drawer and the correct amount of money is in it.

After accepting the drawer and placing it in the register, the cashier should be the only person allowed in the drawer. Not even the manager should be allowed in the cash drawer. If the manager wants to make change, the cashier should open the drawer and give the cash to the manager. This is because a manager could try to steal money from the drawer and blame it on the cashier. The cashier should be the person that is accountable for the money until the end of their shift.

Food and Drink Waste Control

It is important for management to be proactive in order to eliminate potential problems before they get out of control. A manager should be on the floor 90 percent of the time and in the office 10 percent of the time. Management must keep a close eye on employees to make sure they are not giving away free food and drinks. A manager should also do something called a figure eight. This is where the manager starts in the parking lot and walks through the entire restaurant looking for potential problems.

Restaurant Owner and the law

April 6, 2014July 5, 2013 by Donna Schim

Restaurant Owner, is it worth breaking the law?

One of the important aspects of being a restaurant owner is making sure that the establishment is being run legally. This includes many different things.

One of the most common violations in the restaurant industry today is the hiring of illegal immigrants. These people are paid under the table. The restaurant owner thinks this will save a great deal of money because he or she does not need to pay any employee benefits or taxes. Since there is no official record of what the employee is making, the owner can pay them less than the legal minimum wage and can avoid paying taxes.

Restaurant Owner

This “temporary” savings could result in permanent loss–up to losing the restaurant! It is important that the owner understand that they could be subject to a fine or even imprisonment if a government official asks to see an I-9 form of a particular employee and it cannot be provided–and that the owner willingly hired the illegal immigrant. I know it sounds harsh, but monetary penalties for knowingly hire and continuing to employ the person can be harsh Penalties for violations can range from $375 to $16,000 per violation, with repeat offenders receiving penalties, at the higher end. Not only can this hurt the restaurant, but it also can result in that employee being deported or suffering personal penalties. Many restaurants try to save money by hiring illegals. However, this practice often results in the closure of the restaurant in violation.

Other issues could be around the thought of “saving” money on food by not following food safety guidelines or simple common sense with food. The owner could propose that food be used after it has dropped on the floor, or has been cross-contaminated with other food items. There are other health code violations are a common problem found in many restaurants. This can include things like rat or insect infestations in the restaurant. Using ingredients that are past their expiration date is another common health code violation. All of these practices could lead to customers being ill, having allergic reactions, or even the loss of life!

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No one is beyond the law. The laws may seem stiff, but they were written for a reason. The reputation of the restaurant is in the view of the customer. One sick customer who has suffered from eating spoiled food can lead to losses of more customers and eventually the reputation of the restaurant keeps people away. If word gets out of unsafe practices, more often than not, the restaurant ultimately ends up closing. As the restaurant owner, this is not something you want to happen.

Knowing how to follow the laws for hiring minors is a another concern. When you hire a person who is under 18, the owners and managers need to follow the laws on minors. There are laws about the number of hours worked, the time for breaks and payment. Sometimes people think that this law doesn’t apply to a family member who is a minor, but really it is important to follow these laws no matter who the person is. If for no other reason than that the laws should be followed.

Fines, loss of customers, illness, and more can cost a lot more in the long run. A “short-term” saving when laws are violated can result in long term losses–even losing the restaurant itself. Keep it legal, keep it safe, play it smart and stay in business!

Reasons Why Restaurant Fail

July 9, 2013June 9, 2013 by Donna Schim

Reasons Why Restaurant Fail

I have been in the corporate restaurant business for over 20 + years. Corporate restaurants do have working systems. As long as management follows through on closed-restaurant-why-restaurants-fail executing those policies and procedures consistently, the restaurant will succeed.

About one in four restaurants close or change ownership within their first year of business. Over three years, that number rises to three in five.

While a 60%, failure rate may still sound high, that is on par with the cross-industry average for new businesses, according to statistics from the Small Business Administration and the Bureau of Labor Statistics.

The most important point is that your business needs to be better than the person next door. Word of mouth is the number one way to advertise, and best of all it is free advertisement.

Too many restaurant owners do not have a working system in place such as:

Labor and food cost control
A Training Program
Systems and Procedures

Well trained managers who consistently follow procedures, give direction and do follow ups

These are just a few working systems that successful restaurants need to prosper. Statistically the cost of a restaurant’s food and labor should not exceed 60% of their sales.

Labor and food cost control

What is Labor cost? The cost of labor is the sum of wages, benefits, and payroll taxes. If you pay too much then you lose money. If you pay too little, then you lose employees. You have to have the right balance based on your sales. Sales include all your food sales, including beverages.

The formula: cost of labor/total sales (x 100%)

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For example if you sell $5000 in a day, and spend $1400 in labor for that day, your labor percent would be 1400/5000 = 0.28 (.28*100%=28%)

The labor percent for restaurants should be from 25% – 35%. This percentage depends on your restaurant style and mix of sales. Fast food restaurants may have labor costs as low as 25%. Restaurants with table service may have 30% – 35% labor costs.

Food costs

Food cost is the percentage of total restaurant sales spent on food products. So this means you need to keep track of your food inventory and how much you paid the vendors for that food. This varies based on what type of food you sell, the costs of food in your area, and how much you buy locally. Food cost is typically in the range of 28% to 30%. A steakhouse will have a higher food cost—30% or higher. You must accurately track your inventory and food costs to determine the total profits for the restaurant.

Training program

There are restaurants that fail every day in the industry because of poor training programs or no training. Training is a part of our lives from birth on. Sometimes training may be by examples, but for the food service industry, it needs to be much more than just an example. You need to make sure that your employee’s understand the importance of sanitation, food safety, portion control, cooking temperatures, storage temperatures, and more. Your service staff needs to know the menu, the style of your restaurant, and the customers you serve. They need to know how to sell the menu—meaning up selling and suggestive selling. They need to know how to Wow the customers. They need a friendly demeanor, a positive attitude and a personality where they can focus on the guest’s needs. Employees do not typically walk into your restaurant with all these skills. They need to be developed and trained properly. They need to be shown the right way, time to practice their skills, and focused management to help them stay on track. The managers need to be well-trained in each area of the restaurant. The management also needs to know how to motivate staff. They should know what each employee should be focused on throughout each shift—what to do when it is busy, and what to do when it is slow.

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