The Restaurant Expert http://therestaurantexpert.com Restaurant Management Consulting and Software Wed, 15 Nov 2017 19:47:56 +0000 en-US hourly 1 https://wordpress.org/?v=4.7.7 Optimizing Restaurant POS Setup http://therestaurantexpert.com/optimizing-restaurant-pos-setup/ http://therestaurantexpert.com/optimizing-restaurant-pos-setup/#respond Tue, 14 Nov 2017 12:20:40 +0000 http://therestaurantexpert.com/?p=10309 Restaurants are migrating towards modern POS systems in numbers never before seen. In fact, 1 in 3 restaurateurs plan on upgrading their restaurant tech within the next year, while 24 percent updated in the past year, according to a new restaurant technology report from Toast. Purchasing, installing and learning new technology can be a massive […]

The post Optimizing Restaurant POS Setup appeared first on The Restaurant Expert.

]]>
Restaurants are migrating towards modern POS systems in numbers never before seen. In fact, 1 in 3 restaurateurs plan on upgrading their restaurant tech within the next year, while 24 percent updated in the past year, according to a new restaurant technology report from Toast.

Purchasing, installing and learning new technology can be a massive undertaking. In this article, we’ll be discussing how modern POS equipment can be useful in any restaurant setup, how the physical restaurant POS setup should be, and how operators can make crucial, forward-thinking decisions using their tech.

The Benefits of a Modern Restaurant POS

Below are just a few benefits that all restaurants see when using a modern restaurant POS setup. After reading these, check out the next section to see what kind of hardware your restaurant would benefit from and how to go about setting it up.

Efficiency

Only restaurant professionals know how frustrating it is to hold their finger over the POS terminal looking for the right button, circling the screen a few times like a magic wand or a metal detector before finally finding the right button. Modern POS technology is intuitive and designed purposefully for maximized throughput so servers can enter orders faster and with more accuracy.

Easily Accessible Reporting

Some restaurateurs struggle with deciphering the metrics and measuring their sales. That’s okay – maybe you weren’t a math major. That’s why a POS system with easy-to-read analytics is a must for your business. Stop struggling and start crunching numbers so you can staff smarter and save money on inventory.

Reliable Hardware

Do you have a clunky computer at your house? Probably not – you likely have a laptop, tablet, or modern desktop and computer setup. So why wouldn’t you have the same for your restaurant? Older systems will slow you down and hold you back. It’s time to leap forward.

Full Service Restaurants

Full service restaurants tend to have the most moving pieces out of any restaurant operation. The staff is spread all over the premise and their roles are clearly defined. In an FSR, POS equipment should – first and foremost – streamline the process for your guests and employees.

To totally streamline your operations, your staff should use end-to-end technology. If your restaurant is big enough, servers should have more than one point of sale to enter orders into. This is particularly true if you have multiple sections or dining rooms, as one terminal per section may be beneficial. During peak hours, servers should be equipped with handheld tablets to fire orders straight from the kitchen.

New orders should appear in the back of the house on a kitchen display screen to save on paper costs and keep the kitchen systematic – particularly if there are multiple prep stations. Once guests finish their meals, servers can take payment right at the table with their tablets.

What You Need

  • At Least 1 POS Terminal
  • At Least 1 Kitchen Display Screen
  • Optional: 1 (or more) Server Handheld Tablet

The Benefits

Full service restaurants see boosted efficiency from modern POS hardware. Server handheld tablets save time between taking an order and placing the order, while multiple POS stations mean that servers don’t have to wait in line to input orders.

Overall, this efficiency leads to an increase in sales – sometimes as high as 20 percent – meaning more happy customers for your FSR and more tips for your staff.

Quick Service Restaurants

QSRs are focused on getting guests in and out as efficiently as possible. The POS helps with that!

Unlike an FSR where servers will go to the POS multiple times per party, QSR guests typically have all of their POS needs taken care of at once – the order is entered and the payment is made within a matter of seconds.

To maximize efficiency, QSRs should have one or two POS terminals at minimum. If the restaurant gets swamped at certain times of the day, explore the options of self-order kiosks. Handheld tablets also let restaurants “line bust” by having staff work their way down the line and send orders to the kitchen faster.

POS setup for restaurants like Five Guys where orders are made after the order is taken, a kitchen display system is a smart idea for the back-of-house crew. For meals made before they are entered into the POS (at a restaurant like Chipotle), a KDS isn’t necessary.

What You Need

  • At Least 1 POS Terminal
  • Optional: 1 Server Handheld Tablet
  • Optional: 1 Kitchen Display Screen
  • Optional: Restaurant Kiosks

The Benefits

QSRs are notorious for their peaks and dives in sales throughout the day as guests look for a quick bite for lunch or dinner. POS equipment makes a quick service restaurant serve quicker and can increase sales. Kiosks, for example, can improve QSR sales by 5-10% per ticket, and have been adopted widely in restaurants like Panera, Wendy’s, and Shake Shack.

Bar/Nightclub

Bartenders making drinks all night results in wet POS screens. Your POS hardware must be durable and responsive if you want to keep serving customers.

Your bar should have at least one POS terminal. Pending on the size of your bar and how many bartenders are in an average shift, it wouldn’t be unheard of to have several more than just one.

If your bar serves food, a standard stationary terminal near the kitchen and a KDS may be needed, as well as server tablets if you offer table service.

What You Need

  • At Least 1 Bar POS Terminal
  • Optional: 1 Server Handheld Tablet
  • Optional: 1 Kitchen Display Screen
  • Optional: 1 POS Terminal Near the Kitchen

The Benefits

No one likes a long line at the bar. Having multiple POS terminals located conveniently for your staff means bartenders can spend more time on crafting the perfect beverage and less time waiting in line for their turn to ring someone up. POS systems that allow for credit card preauthorization (or “preauth”) let bartenders manage a tab without holding onto a card, saving even more time.

Pizzeria

Pizzerias see a large portion of their orders come through the phone or via online ordering. Because of that, a pizzeria restaurant POS setup should be equipped to integrate with caller ID and a custom online ordering system. One terminal can suffice, but when you’ve got customers at the door and on the phone, you’ll be wishing you had two terminals.

A KDS can also be utilized in the back of house for a pizzeria. If you have two stations – say one for pizza, one for subs and plates – you can explore the option of two kitchen display systems for your restaurant POS setup.

What You Need

  • 1-2 POS Terminals
  • Optional: 1-2 Kitchen Display Screens

The Benefits

Since you have orders coming in online, in person, and over the phone, the POS that can handle all of these means orders are input faster. You can get your delivery drivers out the door ASAP and keep customers happy.

POS Technology in Your Restaurant

Moving into 2018 and beyond, it’s imperative for restaurants to start using advanced and responsive POS technology. If you haven’t already, start looking for a modern restaurant POS setup to improve your efficiency.  

The post Optimizing Restaurant POS Setup appeared first on The Restaurant Expert.

]]>
http://therestaurantexpert.com/optimizing-restaurant-pos-setup/feed/ 0
How to Overcome Restaurant Minimum Wage Increases http://therestaurantexpert.com/changes-make-overcome-restaurant-minimum-wage-increases/ http://therestaurantexpert.com/changes-make-overcome-restaurant-minimum-wage-increases/#respond Fri, 10 Nov 2017 01:02:40 +0000 http://therestaurantexpert.com/?p=10316 Since I’ve already told you in this article there are not enough labor controls you can put into place to overcome restaurant minimum wage increases, here are some of the changes you can make to your COGS and labor cost to not only survive these increases, but thrive: Labor controls With a 12-month budget you […]

The post How to Overcome Restaurant Minimum Wage Increases appeared first on The Restaurant Expert.

]]>
Since I’ve already told you in this article there are not enough labor controls you can put into place to overcome restaurant minimum wage increases, here are some of the changes you can make to your COGS and labor cost to not only survive these increases, but thrive:

Labor controls

With a 12-month budget you will see that your labor cost will go up and down with your sales. In slow months, you might operate at a very high labor cost and in the busy months, you might operate a very low labor cost. Ultimately, at the end of the year you will hit a labor cost target percentage that makes you profitable, without giving up on the guest experience.

  • Start by scheduling the way you always do. Then use a system called the labor allotment system, which takes each month’s labor cost target percentage and your last week’s payroll numbers to allocate the correct number of hours by position to go into the week on budget.
  • Track labor each and every day. When you see you’re over budget on a Monday or Tuesday, you can then react by making small changes the rest of the week to make up the money you lost without effecting the guest.
  • Start looking at efficiencies using a calculation called dollars per labor hour worked. This will show you your sales efficiency by position and quickly identify shifts where you are way over staffed so in the future you can avoid days like that.

Food and beverage controls

  • Implement the key item report for tracking products that are high cost or you want to make sure you control. This count system ensures your products are not being stolen.
  • Use a waste sheet on a daily basis to track what is being wasted, stolen or spoiled so you can find the challenges in your operation that cost you money and fix them the same day.
  • Start using a descending dollar purchasing system where your managers cannot spend more money than they have allocated. This system allows you to give up control of ordering without giving up control of your checkbook and is called the purchase allotment system.

By implementing these three systems alone, you can reduce your food cost by 2–3 percent and be well on your way to overcoming restaurant minimum wage increases.

  • Get recipe costing cards completed for ALL items you make and sell. By doing so you will have the ability to re-engineer your menu and reduce your food costs by 3–7 percent.
  • Attack your descending dollar report with your broad line distributors. Understand that the top 10 items you purchase on a weekly basis represent 50 percent of your total purchasing. And by getting better pricing for those items by agreeing to buy them all from on vendor or switching to a like quality or better quality product at a cheaper price could reduce your food cost by 2–3 percent.
  • Other simple systems that can have a big impact can be as simple as checking in orders looking for accuracy and product safety, implementing portion controls on the line and pre-portioning products to name a few.

While neither of the labor or food and beverage controls outlined above are a complete list of the things you can do to reduce your prime cost and overcome restaurant minimum wage, I hope you can quickly see that to overcome the impending rising labor costs, you have to attack your COGS at the same time you control your labor costs. And in fact, your COGS is where your real opportunity is to adjust to rising labor costs.

To learn the basic COGS calculation, watch this video.

For a complete review of your restaurant and the many systems you can use to increase your sales and revenues and lower costs, read our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here

The post How to Overcome Restaurant Minimum Wage Increases appeared first on The Restaurant Expert.

]]>
http://therestaurantexpert.com/changes-make-overcome-restaurant-minimum-wage-increases/feed/ 0
Overcoming Increases in Minimum Wage in Restaurants http://therestaurantexpert.com/overcoming-increases-in-minimum-wage-in-restaurants/ http://therestaurantexpert.com/overcoming-increases-in-minimum-wage-in-restaurants/#respond Fri, 10 Nov 2017 01:01:12 +0000 http://therestaurantexpert.com/?p=10318 Let me start off by being very clear… this is not a political article, it’s a business article. I don’t care what side of the political fence you live on, my goal is to teach you what you need to do to survive the rising minimum wage in restaurants that are gaining momentum all across the […]

The post Overcoming Increases in Minimum Wage in Restaurants appeared first on The Restaurant Expert.

]]>
Let me start off by being very clear… this is not a political article, it’s a business article. I don’t care what side of the political fence you live on, my goal is to teach you what you need to do to survive the rising minimum wage in restaurants that are gaining momentum all across the United States of America, many of which are reaching $15 per hour.

If you are in a city or state that has not seen large increases in minimum wage in restaurants, please let me be perfectly clear, it’s not a matter of if you will see these kinds of minimum wage increases, it’s a matter of when. With that said, there is no better time to prepare for these increases than now!

First, you have to understand there are not enough labor controls you can put into place to overcome the rising labor costs you are experiencing or are set to experience without damaging your business by delivering terrible customer service and long ticket times. Instead, you need to attack your prime cost. Before moving on, read this article about prime cost.

Start with a budget

Once you’ve read what makes up your prime cost, the next step is to figure out your target prime cost. To do this, you need to establish a budget for the next 12 months of operation. The budgeting process is quite simple, you start with gathering some important information; gross sales, COGS, labor by position and all operating expenses for the past twelve months. Next, determine if you are expecting sales to go up, down or remain the same for the next 12 months. Split your gross sales up by sales category and determine what your COGS percentage is by sales category. Split labor up by position by labor cost percentage for hourly employees and dollar amount for salaried positions. When you build your budget template going forward for all variable line items, its sales multiplied by the percentage and for fixed expenses, it’s the total for the year divided by 12 to come up with the monthly fixed cost.

Once your budget template is finished, you will be able to see where your opportunities are in your restaurant to stop the bleeding. A budget allows you to start proactively scheduling changes to your business and systems to implement that will change your bottom line moving forward, before you’re buried by increases in minimum wage in restaurants.

Identifying your changes to support minimum wage in restaurants

Assuming at this point you have a budget template created, you understand how to calculate your prime cost, you will quickly see what you have to do to overcome the minimum wage increase! For example, I know from working with literally thousands of restaurants over the years that a typical restaurant that does not take an inventory for value to calculate COGS on a weekly or monthly basis and doesn’t track their labor costs on a daily basis, runs about a 78 percent prime cost. And if that restaurant does at least $850,000 a year in gross sales, I immediately know there is at a minimum 13 percent to cut from the prime cost to have any chance of making money.

Next, start looking at the COGS and labor costs. Think about where the low hanging fruit is in your business. For example, if you see you are running a 38 percent food cost, you will know in an instant change is needed there. If you see your kitchen labor is running at a combined 16 percent, you will know in an instant change is needed there, too. Some of the changes required may be subtle, small changes.

When you approach where you want to start controlling your prime cost numbers ahead of increases in minimum wage in restaurants, you want to do a little introspection first. Make sure you understand what your core values are, because if your core values include excellence, you definitely do not want to buy cheaper products. If your core values include abundance, you might not be so inclined to cut your team’s hours.

To read about hard and fast changes you can make to overcome increases in minimum wage in restaurants, read this article.

To read more about the importance of budgeting in dealing with increases in minimum wage in restaurants, read our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here

The post Overcoming Increases in Minimum Wage in Restaurants appeared first on The Restaurant Expert.

]]>
http://therestaurantexpert.com/overcoming-increases-in-minimum-wage-in-restaurants/feed/ 0
When Bad Yelp Reviews Happen http://therestaurantexpert.com/when-bad-yelp-reviews-happen/ http://therestaurantexpert.com/when-bad-yelp-reviews-happen/#comments Thu, 24 Aug 2017 23:38:35 +0000 http://therestaurantexpert.com/?p=10147 Bad Yelp reviews happen to good restaurants, but I want to address the bad Yelp reviews that happen to bad restaurants and what it should mean to them. Over the years Yelp has left a sour taste in the mouth of many independent restaurant owners. Businesses have accused Yelp of being slow to remove fake reviews […]

The post When Bad Yelp Reviews Happen appeared first on The Restaurant Expert.

]]>
Bad Yelp reviews happen to good restaurants, but I want to address the bad Yelp reviews that happen to bad restaurants and what it should mean to them. Over the years Yelp has left a sour taste in the mouth of many independent restaurant owners. Businesses have accused Yelp of being slow to remove fake reviews and for promoting negative reviews of businesses that don’t advertise with the company. These are merely accusations, and I can’t tell you whether they’re true or not, although the Federal Trade Commission has twice decided not to pursue action against Yelp.

One thing I can tell you is that many of the restaurant owners I work with would prefer never to even look at Yelp in their lifetime, much less monitor the reviews they receive on their business’s page on Yelp.

As a restaurant coach and trainer, I have to caution you against this attitude. Yelp and bad Yelp reviews are not to be ignored. I’ll explain why using my family’s dining experiences as the example.

A restaurant deserving of bad Yelp reviews

Like many families, we have a busy schedule with our two teenagers, my traveling and running a small business. As a result, we eat out 16–20 times a month as a family, sometimes more. As a family of four, we probably spend an average of $65 each dining experience. When we look to go out to eat, we probably pick from the same 8–10 restaurants on a routine basis, and then there are the fringe restaurants. Fringe restaurants are the ones where our dining experience is hit or miss, or the service is consistently poor but we like the food. For the purposes of this article, I want to tell you about one of those fringe restaurants. My goal is not to embarrass them or harm them in any way so let’s just call them Uncle Bill’s Restaurant.

Uncle Bill’s is a locally owned and operated restaurant with two locations. They have built their business over the years by being a family oriented restaurant and sports bar. The bar is a small part of what they do. The theme is American Pride, and they have lots of TVs for sports. The centerpiece of their menu is a Philly cheesesteak sandwich and wings. They also serve a large selection of pizzas, hoagies, grinders and salads.

As a family we have frequented Uncle Bill’s for more than a decade. For a long time, the cheesesteak sandwich was so good you would crave it. The service was decent, never great, but it wasn’t bad enough to keep us from dining there. Over the past few years the place has gotten dirty, service has dropped to a level of sucks and the food is a crapshoot. Some days the food is great and others, well, it sucks.

It finally got to a point where we would avoid the restaurant until we forgot how bad the last experience was. This translated from dining with them once a week to once a month to every other month. The crazy part is, you’d think we would learn. I mean, the four of us play an unofficial game: will our server actually get our order right and would the food be good or not? I guess when you have low expectations to start with, it’s hard to be disappointed. This story is about two of those times.

bad Yelp reviewsOn one recent visit the hostess seated us next to a picture on the wall where the glass was broken and sharp edges were exposed. Then as usual, the service sucked, they got the food wrong and we were again disappointed.

But for some reason I decided to take my family there 17 days later! This time there were five of us because we took one of my daughter’s volleyball teammates with us after practice. Unbelievably we were seated at the same table as our last visit, next to the same broken picture

We waited about eight minutes before we got service. Our drinks were ordered and delivered and it was time for our server to take our order. First my wife, then me (not my daughter), then my daughter, then my son and then… the SERVER LEFT THE TABLE! My wife had to actually chase the server down at the POS system to get her come back and take our guest’s order. I’ve experienced a lot of bad service in my day, but I honestly have NEVER seen that one before.

As we waited for food, a busser cleaned a table behind us while dragging a leaking trashcan. Two bussers followed up to mop up the mess right before four young men were seated there. No sooner did they sit down that they started complaining that their feet were in a puddle. They had to wave down a server to ask if they could move tables.

By the way, no one ever came back to clean it up properly.

Our food was delivered all together, even though we ordered wings as an appetizer. We ordered a large order of fries to share that were so cold, we had to ask for a new basket (WE NEVER DO THAT). The crappy service continued with no manager visit to the table and BOOM! $65 plus tip later, they lost us as customers.

What kind of impact does that have on the restaurant? Well, if they were on our weekly dining cycle like many other restaurants are, the sales impact is $281 a month or $3,380 a year! What if they piss off 10 customers a month to a point where they decide never to come back like us? Ten customers a month times 12 months equals a total of 120 customer visits. That’s just disappointing 2.3 customers a month on average. Take that 120 customers times $65 a visit and this restaurant has lost $405,600 a year in gross sales!

But wait. Now there’s Yelp!

I know many restaurant owners who insist Yelp removes good scores if you don’t advertise with them. But I’m not buying it. I have members who don’t advertise with them and deliver such a great hospitality experience they have 4.5–5 stars on the website. What I am saying is stop just brushing bad Yelp reviews and other similar social media review apps off as nothing but crazy bastards. At some point in time, you have to look at your restaurant ratings and say, “Is that really me?”

So I thought I would take a look at what Yelpers said about Uncle Bill’s.

bad Yelp reviews

As you can see, our dining experience was not unique. The consensus is 2.5 stars!

Even if you disagree with Yelp and how they post reviews, or if you feel like they hide your good reviews and are a pay-for-play app, when you have this many customers bashing your restaurant, I’m telling you, where there is smoke, there is fire. Just see these consistently bad Yelp reviews.

bad Yelp reviews        bad Yelp reviews

What to do with bad Yelp reviews

I hope like heck that your restaurant doesn’t score like Uncle Bill’s. But even if it’s rare for you to get a bad Yelp review or a bad review anywhere, what do you do with it?

Here’s what I recommend to get you started:

  • Investigate the best you can and decide if it’s a scammer, a picky customer, or you really fell down.
  • No matter what you determine, respond to every one of them, bad or good. If they are bad, you might say how you value their opinion and how important a great experience is to you, but would they please direct message you so you can call them to learn more. This shows the world you care and it keeps the dirty facts off your profile.
  • When you missed expectations, and it’s not a scammer, as a management team look at what you and your team can do to ensure it doesn’t happen again.
  • Read the book Secret Service by John DiJulius and take your service levels up to WOW.

It’s time to stop brushing your bad Yelp reviews off as just the crazy bastards and start looking at every review as an opportunity to be better.

For ideas on how to improve your customer’s experience, read our special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here

The post When Bad Yelp Reviews Happen appeared first on The Restaurant Expert.

]]>
http://therestaurantexpert.com/when-bad-yelp-reviews-happen/feed/ 1
How to Find Good Restaurant Managers http://therestaurantexpert.com/find-good-restaurant-managers/ http://therestaurantexpert.com/find-good-restaurant-managers/#respond Wed, 23 Aug 2017 23:39:58 +0000 http://therestaurantexpert.com/?p=10150 How would you like to stop the revolving door of managers in your restaurant and finally unlock the solution to finding good managers? Watch this video to learn how to find good restaurant managers! About those restaurant managers… Every restaurant owner has made the decision to promote a regular restaurant employee to restaurant manager and […]

The post How to Find Good Restaurant Managers appeared first on The Restaurant Expert.

]]>
How would you like to stop the revolving door of managers in your restaurant and finally unlock the solution to finding good managers? Watch this video to learn how to find good restaurant managers!

About those restaurant managers…

Every restaurant owner has made the decision to promote a regular restaurant employee to restaurant manager and then found themselves faced with someone who doesn’t know how to embody the role of manager.

Another common mistake restaurant owners make is hiring a restaurant manager from a chain restaurant. This seems like such a great solution because chain managers have been using systems and should be able to just lock that all up for you. However, in most cases this is a flop because they were only successful because of the structure that was in place at the chain restaurant.

In this video I share the better way to find good restaurant managers.

Number one, they need to audition to become a manager. How? Post special projects in plain sight for your employees. Don’t self-select – let everyone have a chance. You never know who you’re underestimating. You train them on the project, make sure they do it, help them be successful and by the time it’s done, you’ll know if that person has potential. If the results don’t meet your expectations, you haven’t hurt anyone’s feelings, you just thank them for their help and move them back to their regular duties. For those who do a great job, offer them a chance to become a restaurant manager in training. They keep their tip shifts, but also increase their skill set to grow into management.

For people who don’t do a great job in their management in the training role, you can easily thank them for their help and let them know you don’t need another manager right now. For those who show they’re ready to be a manager, offer the opportunity.

The bottom line is auditioning your employees in the role of manager is a lot less expensive, less time consuming, less of a burden and much more empowering to your staff.

What have you done to identify good restaurant managers? Share your successes in the comments below.

To learn more about how to find good restaurant managers, read our special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here

The post How to Find Good Restaurant Managers appeared first on The Restaurant Expert.

]]>
http://therestaurantexpert.com/find-good-restaurant-managers/feed/ 0
Restaurant Prime Cost Formula http://therestaurantexpert.com/restaurant-prime-cost-formula/ http://therestaurantexpert.com/restaurant-prime-cost-formula/#respond Thu, 17 Aug 2017 18:45:55 +0000 http://therestaurantexpert.com/?p=10114   The restaurant prime cost formula is the most important calculation in your restaurant. I bet you’ve heard that a typical restaurant makes a nickel to 8 cents on every dollar they bring in. I bet you’ve heard about the study Ohio State University did more than a decade ago where they learned that 60 percent […]

The post Restaurant Prime Cost Formula appeared first on The Restaurant Expert.

]]>
 

The restaurant prime cost formula is the most important calculation in your restaurant. I bet you’ve heard that a typical restaurant makes a nickel to 8 cents on every dollar they bring in. I bet you’ve heard about the study Ohio State University did more than a decade ago where they learned that 60 percent of all restaurants fail within their first 3–5 years of business. I bet you’ve heard that a typical full-service restaurant is supposed to run a 65 percent prime cost. I bet you’ve heard the National Restaurant Association many years ago said that the average full-service restaurant typically runs a 34 percent food cost and a 32 percent labor cost. My goodness! That’s a lot of numbers! And how do they apply to your restaurant?

The truth is… THEY DON’T!

Don’t get me wrong. You need numbers to go by for your restaurant. The challenge I have with benchmarked data is it is all about averages. The average restaurant makes; the average restaurant runs a, the average, etc. Is your restaurant average? How many independent restaurants with different owners do you know that are on the same corner, serve the same food, provide the same style and level of service, serve the same quality products and serve them at the same price point? The answer is NONE! If you’re not the average restaurant, what are benchmarks good for? Absolutely nothing!

Let’s break the numbers down to find your personal benchmark, which is your target prime cost. When I grew up in the business, we referred to prime cost as controllable expenses. There are expenses that are in the direct control of management, such as how they hire, train, schedule and fire staff, and how they purchase and utilize product. For all intents and purposes, these controllable expenses are your management team’s report card. It measures how well they are running the business and the numbers they control. The numbers typically have nothing to do with what you pay for rent, how much you spend on marketing, what your tax bill is, etc. But the numbers can be used to control product and people.

What is the restaurant prime cost formula? The short answer: it’s your total cost of goods sold (to be calculated properly requires weekly or monthly inventories to calculate use because purchases divided by sales are NOT accurate), plus your total labor cost, including taxes, benefits and insurance, then divided by your gross sales (sales before discounts, not including sales tax).

When I first started coaching independent restaurants in 2003, the target prime cost was 65 percent for a full-service restaurant and 60 percent for a quick-service restaurant. But then in 2007 the economy took a major hit. You remember. Before that, after the worst day in modern American history, 9/11, food costs went through a major adjustment and pricing continued to rise. Today there are additional costs and added expenses in our operations that drive potential for profit down, such as rising minimum wages, and you can quickly see that those targets don’t work anymore.

If you have a restaurant that does $850,000 a year or more in gross sales, your new prime cost target is 55 percent or lower! That means for a restaurant that does $1 million a year in sales operating at a 65 percent prime cost, thinking they are doing well, there are 10 points on the table, or $100,000, in bottom-line profitability. This money is available if you are willing to do the work to get it. And the crazy part is the higher your sales, the lower that number can go. Many of our member restaurants operate at 50 percent, 42 percent and even as low as 34 percent! They are achieving these low prime costs without changing product quality or levels of service.

How you get to your prime cost target depends on your financial situation, your core values, what you’re willing to change, and, ultimately, your budget. It all starts with an annual budget which allows you to easily see what needs to be done to achieve these kinds of numbers and then proactively apply systems that change your operation to achieve those numbers. Your budget will ultimately determine where your costs should be.

For example, a family casual full-service restaurant might run a 35 percent cost of goods sold and a 20 percent labor cost. A quick casual burger restaurant might run a 25 percent cost of goods sold and a 30 percent labor cost. A high-end steakhouse might run as high as a 40 percent cost of goods sold and a 15 percent labor cost (a concept called “cash contribution”), and all of these scenarios equal 55 percent. You see? Your targets have nothing to do with industry averages.

Last but not least, with proper budgeting and systems implemented in your business that control your costs, your goal can be a 15-20 percent profit margin!

While running a restaurant can be a numbers game, you don’t want to be playing the game with the wrong numbers. To understand where YOUR numbers should be requires a budget. Achieving those numbers requires implementing systems to achieve and control those numbers. Because here’s the deal: you get to decide which game you play and whether or not you win or lose. Now is the time to decide to change the game and be a winner!

Our software for independent restaurant owners, SMART Systems Pro, makes creating and maintaining systems easy. If you aren’t using SMART Systems Pro to measure and monitor your restaurant prime cost formula, please click here to set up a free consultation. Know your numbers and your profits will go up!

To learn more about the restaurant prime cost formula and how to reach it in your restaurant, read our special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here

The post Restaurant Prime Cost Formula appeared first on The Restaurant Expert.

]]>
http://therestaurantexpert.com/restaurant-prime-cost-formula/feed/ 0
Ways to Increase Restaurant Sales http://therestaurantexpert.com/ways-increase-restaurant-sales/ http://therestaurantexpert.com/ways-increase-restaurant-sales/#comments Wed, 28 Jun 2017 17:41:17 +0000 http://therestaurantexpert.com/?p=10111 Do you wish you had higher sales in your restaurant? Would you like to learn ways to increase restaurant sales easily? This video tip offers two ideas to increase restaurant sales. The best way to increase your sales is to have your salespeople sell. Your salespeople? Yes! your servers are your salespeople. If you want […]

The post Ways to Increase Restaurant Sales appeared first on The Restaurant Expert.

]]>
Do you wish you had higher sales in your restaurant? Would you like to learn ways to increase restaurant sales easily?

This video tip offers two ideas to increase restaurant sales.

The best way to increase your sales is to have your salespeople sell. Your salespeople? Yes! your servers are your salespeople. If you want to get the most sales possible in your restaurant, you have to train them to sell to your guests. They aren’t walking vending machines or order takers – they’re the people in your restaurant that have the biggest impact on your guests’ experience. And if you train them to upsell to guests to enhance their experience, it’s a win for all.

What’s the best way to motivate your servers to sell?

Server contests.

Watch the video above to learn some ideas for different server contests that increase sales in a restaurant.
1. Server Bingo – put the items on the bingo card that you want to sell and ask your servers to fill it up for prizes.
2. Floating $20 bill – pick something you want to sell, such as a special menu, and ask your servers to sell as many as possible for a chance to win the $20 bill and be the last one holding it.

Games are temporary, but they can be motivating and even have a long term impact on the attitudes of your servers, which leads to building restaurant sales. This change in attitude is also a positive change on your bottom line.

You always need to be bringing in more sales because once you pass the breakeven point in your restaurant, every penny is yours.

To learn more ways to increase restaurant sales, read our special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here

The post Ways to Increase Restaurant Sales appeared first on The Restaurant Expert.

]]>
http://therestaurantexpert.com/ways-increase-restaurant-sales/feed/ 2
Restaurant Spreadsheets Are Dead http://therestaurantexpert.com/restaurant-spreadsheets-are-dead/ http://therestaurantexpert.com/restaurant-spreadsheets-are-dead/#comments Thu, 22 Jun 2017 21:25:20 +0000 http://therestaurantexpert.com/?p=9978 Let me tell you why restaurant spreadsheets are part of the past in managing restaurants. I’m sure you can make some guesses based on your use of them. For example, are you tired of constantly updating your spreadsheets and keeping up with all the fluctuating information you have to track? Wouldn’t you like to input your […]

The post Restaurant Spreadsheets Are Dead appeared first on The Restaurant Expert.

]]>
Let me tell you why restaurant spreadsheets are part of the past in managing restaurants. I’m sure you can make some guesses based on your use of them. For example, are you tired of constantly updating your spreadsheets and keeping up with all the fluctuating information you have to track? Wouldn’t you like to input your numbers once and control all of your numbers? What about all the things that can wrong with spreadsheets when managers who don’t know how to use the formulas make adjustments and all your data is lost or ends up being wrong?

Watch this video to learn three main reasons restaurant spreadsheets are dead and what you should do instead.

Back when I was managing restaurants, I loved Excel spreadsheets. I studied formulas and created the most amazing outcomes with spreadsheets. At the time, Excel was the height of technology. But that’s just not the case nowadays. They are dead!

Here’s why spreadsheets aren’t your best bet for running your restaurant.

1. Numbers can be manipulated. Spreadsheets can be manipulated or a formula can be lost. It might be on purpose or it might be an accident, but it’s so easy to screw it up and not see it. Then you’re using that spreadsheet and that formula and getting inaccurate results day to day, week to week and month to month.

2. Multiple versions of the same document make it hard to keep it reliable and valuable. One is on your computer, one is on Chef’s computer, your general manager copied it and saved it under a new name on your other computer, etc. It’s hard to ensure you’re working with the most up-to-date version of the spreadsheet.

3. Recipe costing cards are outdated immediately. No matter how much time you spend on your recipe costing cards, as soon as a delivery comes in and the prices change, and your recipe costing cards are out of date. This kind of effort is exhausting and leads to procrastination so bad that eventually your recipe costing cards are completely out of date and completely useless. The man hours required to keep up are just too much.

First and foremost, please don’t be offended by my criticism of restaurant spreadsheets. If you’re using them to run systems in your restaurant, I applaud you. Any system you use on a daily basis is critical. I simply want to point out that there is a more efficient way to run systems in your restaurant.

You must get restaurant management software. (It so happens we offer one – as a result of my Members wanting something more efficient and effective than spreadsheets!)

All software is not created equal. Look at SMART Systems Pro for the independent operator and have a complete restaurant management software program supporting you.

If you’d like to learn more, call us so we can show you how we tie all your systems together and give you the ability to hold your managers accountable: 877-457-6278, ext. 106. You can also request a free 15-minute consultation so we can get to know your restaurant’s needs better and figure out how you can benefit the most from our software and coaching.

To learn more about the importance of systems and how it can drastically improve your restaurant, read our special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here

The post Restaurant Spreadsheets Are Dead appeared first on The Restaurant Expert.

]]>
http://therestaurantexpert.com/restaurant-spreadsheets-are-dead/feed/ 1
10 Ways to Control Food and Liquor Costs http://therestaurantexpert.com/ways-to-control-food-and-liquor-costs/ http://therestaurantexpert.com/ways-to-control-food-and-liquor-costs/#comments Thu, 15 Jun 2017 21:38:38 +0000 http://therestaurantexpert.com/?p=9969 Are you looking for ways to control food and liquor costs? If you’re like most restaurant owners you are. If you feel like your food cost is out of control and that your pour cost going up all the time, you’ll want to watch this video to learn these 10 ways to control food and […]

The post 10 Ways to Control Food and Liquor Costs appeared first on The Restaurant Expert.

]]>
Are you looking for ways to control food and liquor costs? If you’re like most restaurant owners you are.

If you feel like your food cost is out of control and that your pour cost going up all the time, you’ll want to watch this video to learn these 10 ways to control food and liquor costs. This videos teaches you the systems you need to control your cost of goods sold overnight.

When it comes to controlling your restaurant’s food and liquor costs, you have to look at systems. You have rising prices on the products you buy all the time. Add to that five-finger-discount, over portioning and over pouring, you’re using more product and not bringing in any more money for it. That means you’re losing money every time you serve something.

How do you change that? You have to put systems in place to control your restaurant’s cost of goods sold.

Here is the list of the systems I cover in the video above. These are the systems you must have in place in your restaurant to control your cost of goods sold literally overnight. They are critical.

1. Shelf-to-sheet inventory
2. Purchase allotment system
3. Key item report
4. Waste sheets
5. Receiving procedures
6. Portion controls
7. Ordering par levels
8. Recipe costing cards
9. Yield tests
10. Calculating ideal food cost

You want to make change to your bottom line, you want to control your restaurant’s cost of goods sold, you need these 10 systems!

Be sure to review our “Restaurant Management Tips” playlist where we have videos that individually explain each of these 10 restaurant systems.

To learn more about these ways to control food and liquor costs in your restaurant, read our special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here

The post 10 Ways to Control Food and Liquor Costs appeared first on The Restaurant Expert.

]]>
http://therestaurantexpert.com/ways-to-control-food-and-liquor-costs/feed/ 1
New Restaurant Employee Scheduling App http://therestaurantexpert.com/new-restaurant-employee-scheduling-app/ http://therestaurantexpert.com/new-restaurant-employee-scheduling-app/#comments Tue, 13 Jun 2017 19:19:31 +0000 http://therestaurantexpert.com/?p=9962   New Restaurant Employee Scheduling App Puts Scheduling at Employees’ Fingertips (June 13, 2017 – Phoenix, Ariz.) A successful restaurant operation depends on reliable employees and effective managers. Connect the two with open and easy communication and it is a restaurant where everyone wants to work. That’s why TheRestaurantExpert.com developed a new mobile application for […]

The post New Restaurant Employee Scheduling App appeared first on The Restaurant Expert.

]]>
 

New Restaurant Employee Scheduling App

Puts Scheduling at Employees’ Fingertips

(June 13, 2017 – Phoenix, Ariz.) A successful restaurant operation depends on reliable employees and effective managers. Connect the two with open and easy communication and it is a restaurant where everyone wants to work. That’s why TheRestaurantExpert.com developed a new mobile application for restaurant owners, managers and employees. The new app, SMART Shift, works in tandem with online restaurant management software, SMART Systems Pro, to extend the reach of the program’s labor systems. SMART Shift is now available in the iTunes App Store and Google Play for restaurants currently running SMART Systems Pro.

The goal of the restaurant employee schedulingapp is to make managing restaurant labor more efficient and effective. Restaurant owners and managers can use it to quickly and easily communicate with restaurant team members about schedule changes, available shifts and other immediate communications. The app allows owners and managers to review the restaurant’s labor numbers, check schedules and send texts to team members. Team members can exchange, pick up or give up shifts on the app and a manager can approve these actions via the app.

“Employees today use mobile apps in the workplace to help them manage their commitments and restaurant employees are no exception,” said David Scott Peters, founder, TheRestaurantExpert.com. “This new app gives restaurant owners and managers an edge in recruiting and retaining employees, especially in today’s low unemployment climate where it’s difficult to find new employees. Being able to offer a mobile tool that allows employees to make schedule requests, switch shifts with fellow employees and be reminded of upcoming shifts is an advantage many restaurants can’t offer. As a bonus it also makes the restaurant run smoother because employees are actually showing up!”

Restaurant owners already operating SMART Systems Pro in their restaurants can visit the iTunes store or Google Play store to purchase and download SMART Shift. It is available for $4.99. Employees must purchase and download the app to participate in the mobile benefits of the scheduling tool.

About TheRestaruantExpert.com
TheRestaurantExpert.com is a coaching and training company for independent restaurant owners, offering several tools designed to find the hidden profits in every restaurant. Founded by David Scott Peters, the company aims to teach independent restaurant owners how to operate with systems to help them make more money and live a balanced life, and to bring them together to share ideas, challenges and successes in a safe, friendly, cooperative environment. To learn more about the company, visit www.TheRestaurantExpert.com.

-###-

The post New Restaurant Employee Scheduling App appeared first on The Restaurant Expert.

]]>
http://therestaurantexpert.com/new-restaurant-employee-scheduling-app/feed/ 1