Wednesday, June 27, 2012

10 Common Restaurant Startup Mistakes (and how to avoid them)

In any new business venture good decision-making is vital. Opening a new restaurant requires so many decisions that it's not hard to make some bloopers along the way.

The key is not totally missing the mark on the really important issues that can make or break your chances for success. Here are some of the more important common missteps new owners make in areas that play a big role in how well a new restaurant is likely to do.
  1. Underestimating capital needs. There are many good new restaurants with excellent prospects for success that simply run out of money. It's common for first time owners in particular, to leave out or inadequately project all the startup costs involved in opening the restaurant. Some of the reasons include construction overruns, change orders, delays, and to be blind-sided by additional costs mandated from local inspectors and building authorities.

    Also, soft costs like permits, liquor licenses, insurance binders and pre-opening payroll are often missed completely or grossly under-budgeted. Unless you've done it before, it's usually advisable to seek some experienced, professional help in identifying and estimating, in detail, startup capital you'll need. Even then, many pros still add a 10%-15% contingency for the host of things that can (and often do) happen to add more cost to the project than you plan on.
     
  2. Believing you'll start making money on opening day. The odds are stacked against this happening. Even the best run chain restaurants, who open restaurants for a living, factor into their startup budgets, an allowance for funding operating deficits for up to 2 to 3 months after the restaurant opens.

    It usually takes time to build sales volume to an adequate level. Even if your sales are strong from day 1, food and labor costs are usually sky high for the first several weeks as your managers and staff get acclimated, productive and have the time and energy to focus on anything other than just taking care of who's at the table. In time, most things can be fixed. Run out of money and you're done. Not factoring in an adequate reserve for initial operating deficits is another cause of undercapitalization (see #1 above).
     
  3. Lack of a clear vision and purpose. This may sound somewhat vague and intangible but a successful startup requires the coordinated effort of a dedicated staff pulling together in the same direction, united by a common goal. Getting this accomplished requires some leadership skills.

    New operators who either don't have or can't communicate an underlying mission that the staff can rally around will find it difficult to create the kind of climate that supports teamwork, hard work and dedication to excellence that endures through the long hours and sometime chaotic conditions that take place during the startup phase of any new restaurant.
     
  4. Lack of documented systems, procedures and training manuals. Restaurant operations involve the ongoing repetition of hundreds and even thousands of divergent tasks by many individuals and groups of individuals. Organization and consistent execution is key to creating a successful restaurant. Franchised restaurants start out with detailed recipes, checklists and procedures to do everything from prepping the lettuce, to cleaning the restrooms to closing out the cashier. In new independent restaurants, it’s often making it up as you go.

    There may be nothing to go by other than what's in the owner's head. This makes it more challenging to train employees and execute consistently so customers get a consistent level of service and food quality regardless of who the server is or who's in the kitchen. The longer the restaurant operates without a documented way of doing business, the longer the restaurant stays stuck in the often unorganized and do-what-it-takes and difficult startup phase.
     
  5. Owner fails to function like an owner. Instead, the owner functions like just another employee and ends up bussing tables, cooking in the kitchen and doing the books. Obviously this is often a necessity during the startup phase but eventually someone has to manage the business, not just run the restaurant.

    Managing the business includes activities like monitoring cash flow, analyzing the P&L, deciding about next month's marketing activities, evaluating what's working on the menu and other "strategic" functions to position the restaurant for future success. If the owner is constantly training employees or working the line, guess who's managing the business? Nobody.
     
  6. Having the grand opening on opening day. You only have to do this once and you learn to wait a month or 2 to declare your grand opening. There are few things worse than getting slammed with more business that you can possibly handle on day one. With so many restaurants, the public's first impression can easily be their last.

    Blow it on opening day and chances are you won't see most of those people again, ever. And they'll tell their friends to stay away too. Soft, quiet openings are the way to go. Get your act together before you tell the world.
     
  7. Focusing too much on what you like. What you like doesn't matter, because you are not the customer. What matters is what your customers like. Find out what people in your area want and the price they're willing to pay for it. Go to existing restaurants and find out what people are buying. Take formal or informal surveys, conduct focus groups, anything to get a sense of what people in your area are hungry for that they currently can't get in your market area and what they're willing to pay for it. Too many new restaurant concepts miss the mark by not analyzing what people want in their local market.
     
  8. Deciding on a concept, and then finding a location. Restaurant industry legend Phil Romono, whose biggest creations are Fuddruckers and Macaroni Grill says that's a mistake. Don't marry yourself to a concept. Find a location in a good market with adequate parking, access, visibility and other positive traits, and then determine what the local market wants that it can't get and find a way to satisfy that unfilled desire.
     
  9. Accepting a secondary location to save on rent. Don't be too sure that your restaurant is going to be so exceptional that customers will go out of their way to find you. With all the restaurants there are today, chances are they won't. High visibility and convenient access are more critical today than ever. Saving money on rent in a poor location often results in spending all that and more on advertising in an attempt to get noticed and bring in more business.
     
  10. Trying to appeal to everyone. You can't and if you try you'll end up with too may items on the menu, an overly complicated kitchen, confused customers and no unique identity in the marketplace. The key to success for today's independents is to identify an unfilled niche in your local market and being laser-beam focused on filling that particular slice of the market. 

Sunday, June 24, 2012

10 Critcal Success Factors

Every restaurant operator knows what areas of the restaurant are critical success factors. It may be the food, people, or level of service. In any case I have listed 10 steps that I feel are important enough for you to consider.

1. Have a daily plan before you enter your restaurant.

Successful people never start a day without a plan. Before you leave your restaurant construct a list for the following day. You may choose a To-Do list, or you may dictate notes into your smartphone on your way home. In any event, stay ahead by planning tomorrow's list today!


2. Make sure the job gets done.

Following up on every project is even more important than initiating it. Be a hard-nosed persistent and make sure the job gets done. It's a lot easier than having to make excuses later.


3. You deposit dollars, not percentages.

I have seen many restaurant operators who are forever looking for ways to lower percentages (i.e. food cost, labor cost) without looking at the profit contributions. Always look at the overall profit contribution (the mathematical difference between a menu item's product cost and it's selling price).


4. Keep hot foods hot, and cold foods cold.

The closer the temperature of the serviceware to the food, the better the chances are of maintaining that temperature.


5. People eat with their eyes.

If it doesn't look good, don't serve it! By making your product look good, you are on your way to exceeding your customers expectations.


6. Buy the best products available.

Use the best quality possible. If you start with a quality product there is a good chance you will finish with a quality product.


7. Give your employees feedback.

Immediate feedback is probably the most effective training method you can use. The closer the feedback is to the behavior, the greater its impact. This also applies to reprimands. Unlike compliments, however, which are usually most effective when extended in front of others, reprimands are best discussed in private.

8. Acknowledge your guests with a smile.

The first thing people see or experience exerts a strong influence on their final impression of a restaurant. How can we teach our employees to smile? We must set the example by smiling at them. A smile has a profound effect on your service, and it costs you nothing.


9. Call your customers by name.

Customers have egos and enjoy being recognized, particularly if they are with friends. People with guests will go out of their way to go to a place where they are known and acknowledged.


10. You cannot afford to have anyone leave your restaurant unhappy.

It has often been said that when someone has a good experience at a restaurant, they tell three people; but when the experience is bad, they tell seven (but that was the good old days). Now anybody can be a food critic on "Yelp," and one bad review can be read by hundreds of people. This is the reason a total dedication to customer satisfaction on the part of every employee is vital to the success of your restaurant. Word of mouth advertising can be positive and negative. It is five times more expensive to acquire a new customer than it is to keep an old one. Yet many restaurants spend much more of their resources on advertising, couponing, and direct mail than they do on training their employees to provide excellent service.

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Thursday, June 21, 2012

The Basics for Attracting and Keeping Customers


 
What are the basics when it comes to attracting and keeping restaurant customers?

We believe there are five essential elements.

  • The right position (image). The need to convey what it is you offer to your potential guest. This includes the combination of your facility design, menu, food, service, and staff. All of these ingredients are needed to convey an appealing image.
  • Quality. The level of quality must be appropriate to the type of restaurant, the type of food served, and the prices charged. Quality is an ambiguous term; however, it has various interpretations and arouses different expectations. It is most commonly associated with the taste of the food and beverages. Guests do not expect to find pre-prepared ice cream sundaes in gourmet ice cream specialty shops, but they are acceptable in fast food restaurants.
  • Service. Guests perceived “better than expected” service as an added value. In the same way they perceive poor service as “uncaring” which in turn will influence them not to return. Guests of any type of restaurant want to be waited on to the level of their expectation, be served within a reasonable amount of time, receive fair value for their money, and be treated with care and respect. Excellent service is perceived as an added value, which leads to your customers feeling they got more than they expected.
  • An appropriate menu. Guests expect a menu to fit the type of restaurant—a limited menu in a fast food outlet, a full, but simple menu in a family restaurant, and a creative gourmet menu in a fine-dining establishment. Guests appreciate a menu that is accurate and easy to read. Prices must be in line with what is offered. Using menu specials adds interest and excitement to the menu and gives your guests the impression of added value. As a rule, menus should be creative, but not too trendy. Trendy menus have limited appeal. Menus should have an appealing design and be in top condition.
  • Presentation.  Like quality, presentation must always be appropriate to the type of restaurant, the type of food being served, and the prices being charged. Experts agree that guests can be influenced to purchase an item if it is packaged to exceed their expectations. To exceed expectations, food must appeal to all the senses. You can achieve this by being creative with color, texture, the shape of the food, using unique service ware and garnishes, and appropriate music to complete the dining experience.

Guest’s service requirements are situational. The same guest will have different needs at different times. Restaurants are increasingly aware of this and are engaging in “Niche Marketing.” Niche marketing allows a restaurant to meet the guests multiple needs. The challenge is to serve guests from a variety of demographic groups. The restaurant concept musts serve a differentiated population without losing sight of their position in the marketplace. 


Good supervision is the art of giving people a shot in the arm without letting them feel the needle.  



Thursday, June 14, 2012

20 Food Cost Tips


Over the last 31 years in the restaurant business, I have acquired and shared many tips and strategies that are vital to controlling food cost. Some are easier to implement and monitor than others, but each one, when used properly will have a positive impact on your food costs.

Your own success depends primarily on your ability to motivate, empower, challenge, and encourage your employees to take the lead when it comes to food costs. This is the underlying secret to success.
If you (the owner/operator) were the only one handling the food from start to finish, then it would be a different story. However, that is not the case (at least I hope not).

So here is a partial list of tips that can assist you in increasing your Profit Line.
 
1. Make sure all employees are properly trained. A lot of you out there are saying of course, but I am amazed at the amount of employees I run into that don’t even know what food cost is and how they affect it.
 
2. Implement an incentive program that rewards decreasing food waste. Nothing works better as a motivator than an incentive program. Yes it takes effort and follow through to monitor the results. However, incentive contests have a two-fold effect. First it makes a task more fun because people like to be challenged. And second it makes all of your employees aware of food costs.
 
3. Control your inventory. Nothing will drive up food costs faster than having too much inventory on hand. First of all a large inventory leads to food spoilage. And second it is harder to detect when food is missing.

4. Emphasize proper portioning. Communicate to your employees that proper portioning also leads to customer satisfaction. As an owner/operator you have spent a great deal of time perfecting your menu. You have priced your menu accordingly to insure your guests are satisfied and that you can make a decent profit. Some employees feel they are doing the customer a favor by piling on the ingredients. (If one is good, three is better). Educate them to the concept of consistency.
 
5. Close supervision (lead by example). I have seen many operations where the management staff is very lax in the way in which they monitor food portioning and waste. Sometimes it’s an issue with them and sometimes it is not. Proper supervision includes consistency of standards.
 
6. Train your cooks to get it right the first time. Recooks are devastating to food costs. In most cases this is just a matter of insisting that everyone from the waitstaff to the cooks are well trained in the area of entering orders properly (computers) to reading and preparing the orders properly. Once again, training is the key.
 
7. Theft. Employee pilferage is a wide spread problem. Don’t kid yourself; everyone has or is experiencing employee theft. I have written several articles on how to prevent employee theft. One suggestion goes back to inventory control. Keep your stock levels low! If your employees feel you are going to run out of a product, they are less inclined to take it.
 
8. Explain to your employees theoretical vs. actual food cost. Show them the numbers and what it all means. I have always used the example of how this relates to their personal grocery bill. For example: If you purchased a loaf of bread you might expect to make 12 sandwiches. However, that loaf only yielded 9 sandwiches. You would want to know what happened to the other slices, wouldn’t you? It could have been dropped on the floor, torn, or someone may have walked into your home and stole it. Whatever the reason, if this were to continue time and time again, it would put a dent in your grocery bill.

9. Waste! Waste! Waste! Simply put, waste is like dumping food in the trash and writing a check for it.
 
10. Have a food cost goal (and let your employees know what it is). You can’t improve cost controls without a goal. And you can’t expect your employees to contribute to the goal if they have no idea what it is.
 
11. Accurate food inventories. Have you ever taken an inventory that didn’t come out all right and you though, “oh well, it will wash next week." But next week comes along and it didn’t? Inventories play a major part in controlling food costs, but only if they are accurate.
 
12. Make sure you get what you paid for. Check all deliveries! Make sure you not only get the right amount of product you ordered, but also make sure you get the right quality.
 
13. Use proper food rotation. Use day dots or any other means to insure proper rotation of all food items.
 
14. Monitor your employee meals. Institute an employee meal policy and stick to it. I have always recommended an employee meal policy that is fair but also lets the employees know the value of the food they are consuming. Don’t let your employees gobble up your profits

15. .Keep Walk-Ins and Freezers locked. This does help in keeping food pilferage to a minimum. Also, make sure you keep the keys in a secure place.
 
16. Also, make available only enough products that will be used. This includes prepping (monitor your usage so you know the correct amount to prep each day). Have you ever noticed how the end of the tube of toothpaste seems to last almost as long as the rest of the tube?
 
17. Make sure the person doing the food ordering is properly trained.
 
18. Train your waitstaff to identify inconsistencies in portions. A well trained waitstaff can identify and bring to your attention inconsistencies in portions and quality that can hurt your restaurants reputation.
 
19. Use spatulas to scrape out all containers.
 
20. Strict adherence to all recipe standards is a must. Make sure scales and other measuring tolls are being used at all times.
Implementing these tips will have a profound affect on your operation. It takes persistence and energy to be successful in this business.

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Tuesday, June 12, 2012

Ten Key's To Training Success

Training never just happens - it is the result of a conscious effort on the part of the trainer and the trainee. Too often trainers say things like, "I can't understand why he can't perform; I told him; I even showed him how!" Showing is not training; telling is not training; testing is not training. These functions imply activity that is one-way and instructor-oriented.

Job training is the processes of helping an employee acquire the necessary knowledge, skill, and work habits to perform a specific job. Failure to help employees get started properly results in needless expense, high levels of employee frustration, and increased turnover rates.

Planned training saves time and cost much less than letting people learn "the hard way". It reduces waste. It helps to insure safe work habits. It reduces employee frustration. It prevents the learning of incorrect work habits, which will have to be unlearned later. It helps to insure guest satisfaction.

While people are all different in their emotional reactions to the learning situation, typical new employees and those learning a new skill want to do a good job. They will do a good job if someone helps them get started properly and gives them information on how they are doing. You are that someone. You are expected to do it through effective job training. That's what job training is - helping people to acquire the necessary knowledge, skill and work habits to do a good job.

There are always two people involved in the training process, the trainer who has the knowledge and skills to do the job, and the learner who must acquire them. The process of transferring this know-how from one person to another is much like TV and radio broadcasting. The trainer is the transmitter and the learner is the receiver. In both instances there is a certain amount of static or interference, which must be overcome.

No two trainees are exactly alike. Their personalities were set long before you ever employed them. Each individual has a different level of desire to learn the job, degree of nervousness, knowledge, and previous experience. If you, the trainer, do not make reasonable allowance for these differences, the message may not get through to the learner.

In fact there are several fundamental principles or keys of learning which you must understand and put into practice if the training you do is to be effective.

These ten keys are points, which will aid you in accomplishing your task of training crew members. While you are reading, think about how you would apply each point in your situation.

Key 1 - People learn best when fresh.

Trainees are much more able and willing to learn when they are both mentally and physically fresh. Find time when this criterion is met. Avoid scheduling training at the ed of a shift or after the trainee has worked a busy period. If necessary, schedule a trainee to begin an hour earlier than the traditional starting time.

Key #2 - People learn best in a non-threatening climate.
                                                                                                                                                      

While some people think that keeping trainees thoroughly intimidated will make them "Pay attention”, quite the opposite is true. Stress inhibits learning. We should attempt to keep trainees as relaxed as possible. Learning a new job or skill creates enough stress by itself

Key #3 - People learn better when the purpose of the skill or task is known

If you want to facilitate learning, provide the "end use" of the function. Describe the ultimate result. "We are learning how to cook, hold, and assemble burrito’s to provide guest satisfaction through quality food and speed of service". Failing to inform the trainees of this purpose allows their minds to wander during the process. Sometimes the end use may be obvious to us but hidden to the trainees.

 Key #4 - People learn better when the "why's" are explained along with the "what's" and "how's".

Each "what" or "how" will be learned faster and retained longer if a "why" accompanies it. If you want the trainee to flip the tortilla from the grill at a certain time, you should tell him or her what to look for that would indicate it is time to flip or remove the tortilla. Also explain how the tortilla will look if it is flipped too soon or too late. Now he or she can visualize the consequences!

Key #5 - People learn faster when they are provided "feedback".

Feedback is "information provided to enhance performance". It means that as a trainer you must give your trainees a response to their efforts. Responses can be verbal or non-verbal. Nods of the head, an "okay" or "that's it" are simple, yet effective, examples of keeping the trainees on track and positive in attitude. A more formal type of feedback is the "critique" step in the training process. There we will emphasize the use of positives before the critical comments.

Key #6 - Stress the "do's" rather than the "don'ts".

Our tendency frequently is to tell trainees what not to do. Emphasize what they are to do in the task and avoid using the "what not to's". The only exceptions to our rule are points, which directly involve guest satisfaction or safety. Otherwise, be positive!
                                                                                                                                                                                     

Key #7 - Work from the known to the unknown.

Trainees can accept training faster if the new idea, task, or concept is connected with an established one. "Okay, today starts a new coupon promotion. You ring them in just the way you normally do, but now you hit the appropriate coupon key afterward.” This technique sometimes referred to as "bridging" allows us to move quickly from point to point to reach our objective rather than trying to jump the canyon.

Key #8 - Don't talk a "foreign" language.

Buzzwords, jargon, or foreign language all mean the same thing. (Words we in our industry, our business, or our restaurant use and understand but which are unknown to the general public). The list can be endless. If you must use a word, first define it then use it. If you don't have to use jargon:, don't! Sometimes we like to impress ourselves along with the trainees with our vast and expansive use of the Roberto’s vocabulary. Remember, our goal is crew training, not ego feeding.

Key #9 - Break down complex tasks into basic tasks.

A banquet is best eaten in bites, rather than one continuous gulp. Take a complicated task of many steps and break it into several tasks of fewer steps. Then train the employee on each task separately until the entire complicated task has been mastered.

 Key #10 - Doing tasks are learned by doing.

The majority of our skills for the hourly employee are for manual and muscular types of tasks. Therefore, if you want the trainee to learn how to do the tasks, he must have the opportunity to do them during the training process. Over and over and over - because we not only learn fastest by doing we retain the skill longer by repeating it.

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Thursday, June 7, 2012

How to Make Your Employees Feel Indispensible

How To Make Your Employees Feel Indispensable

Employee turnover is one of the costliest problems facing restaurant operators. Low employee moral, decreased customer satisfaction, and increased liability exposure result from the restaurant industry's inability to retain good employees. There are however, several steps an owner/operator can take to reduce turnover.

In order to retain employees you must get involved in the goals and operation of your restaurant. You can involve your employees and improve moral through motivation and empowerment.

It is your organizations responsibility to improve skill development and professionalism in each of your employees. This will have a direct effect on the satisfaction your employees receive from their jobs. And when people receive satisfaction for their jobs, the follow occurs:

  • Service quality improves
  • Turnover decreases
  • Profit increase

Here is a list of twelve things you can do to retain your employees:

  1. Develop employee profiles and then hire and train "right."
  2. Offer psychological and monetary compensation
  3. Inform your employees of pertinent information. Respect their right to know.
  4. Ask for help and advice from your staff. Keep them involved.
  5. Earn your employees' respect if they are to follow your lead.
  6. Teamwork must be fostered and rewarded to avoid the "us vs. them" syndrome.
  7. Don't hold employees' accountable for things not under their control.
  8. Create moments for the employees to feel good about their contributions.
  9. Develop a sense of involvement and responsibility in your employees.
  10. Keep criticism constructive.
  11. Listen to employee complaints. Adjust and correct accordingly.
  12. Emphasize skill development rather than rules. Foster personal talent.

As employees begin to understand how they fit into the operation, they will begin to feel that they are indispensable. Once this happens your employees will demonstrate greater loyalty to you, their employer.

Webster's dictionary defines training as, "to instruct so as to make proficient."

Value your employees' opinion. Seek it out. Listen carefully to what they have to say. Teach them the necessary skills that will make them a valuable and indispensable part of your operation.

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