HOW TO…

HOW TO…
Manage Your Restaurant
Through Business
Ups and Downs
A Tale of Two Restaurants
Page 22
Track Your Restaurant’s
Inventory With
Confidence
The Path to Becoming an
Inventory Control Black Belt
Page 30
Select and Replace (and
Replace) Smallwares
Crash and Learn
Page 42
Page 16
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$5.95 U.S. / CANADA
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Tale of Two Restaurants
A Five-point Assessment of Basic Restaurant
Operations When It Is Not the ‘Best of Times’
‘When sales are slowing the first thing to do is not overreact.’
By Amelia Levin and Barry Shuster
I
t was the best of times; it was the worst of times.
And then it was the best of times, again.
And then it was not.
In some ways, every operator owns at least two restaurants, if you consider that the same restaurant can
seem like a different business when sales are down.
Once a well-oiled machine when business is humming, a restaurant can seem like a wholesale disaster
when seats are empty.
Even in the best of times, it is foolhardy to believe that
sales growth will continue indefinitely. It is just as foolhardy,
however, to believe that when sales dip the proverbial sky is
falling and your business needs a massive overhaul.
The truth: No business is immune from cyclic peaks
and troughs in sales. As much as any business, and perhaps even more so, independent restaurants are subject to
national and local economic cycles. Discretionary spending can become tight. Competition can move in quickly
on your market. Longtime guests can move on, become
fickle or lose interest in the concept.
You are in this business for the long haul. None of
these forces have to mean disaster for the business. Yet
any time your business is slumping you need to assess
if there are issues and problems under your control that
can be adjusted to reverse a downward trend.
Quickly answer the following questions: Where are
the weaknesses in your business? Is service slipping?
Is the menu doing everything to drive sales? Are you
getting the most out of your marketing and promotion
budget? Where can you cut costs, reduce waste and, in
general, squeeze as much income from your flagging
sales, for the time being?
When these issues are addressed with cool objectivity,
they seem so straightforward. That said, you’re human,
and this is your business we’re talking about. Slumping
sales tend to cause panic.
In this article, we draw on the experience of a couple of
consultants whose job is to get past the emotion and look
at reality to help you approach slumping sales methodically. “The habit — especially in the independent restaurant segment — is to say, ‘sales are flat, I need to remod-
el,’ or ‘sales are flat, I need to redesign the bar, or I need a
new menu,’” says Rudy Miick, FCSI, CMC, founder and
president of Miick & Associates in Denver and a 33-year
veteran of the restaurant and foodservice industry.
Chris Tripoli, founder and principal of A’la Carte Foodservice Consulting Group in Houston, agrees. “When sales
are slowing the first thing to do is not overreact,” he says.
“A few things are probably requiring attention, but there
may be many more things still going right, so a basic operations assessment is a good start.”
Miick and Tripoli urge operators to examine the problem, starting with the basics. “Traditionally, there are
certain pillars that make a great restaurant,” Miick says.
“[This includes] quality of the food and beverage; quality of service and quality of the décor. [And then there is
the issue of the] space that integrates those other pillars.
[And finally] it’s about brand awareness and strengthening your brand.”
Tripoli says a solid analysis of your brand starts with
investigating the “three M’s”: management, menu and
marketing, though not necessarily in that order.
Here are five areas to assess during the best of times,
but especially during the worst of times — and, of
course, all the times in between. We’ve also provided
references to additional content on these areas if you
want to delve deeper.
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DXeX^\k_\dXeX^\d\ek% A strong management
team serves as the backbone for creating great service
and a memorable guest experience, one that will keep
them coming back. A closer look at your policies and
procedures might reveal some of the contributing causes
for a slump in sales in addition to whatever is going on in
the economy, Tripoli says.
Start with the line check. “Every single shift manager should be doing line checks regularly,” Tripoli says.
Cooks should be portioning food properly, holding temperatures and ensuring the freshness of the food. “Your
employees may have been doing the same thing for a
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long time — without a consistent daily line check, the same
plates may not be consistent for the customer. That leads to
customers not coming back as often.”
For the front of the house, daily preshift meetings are very
important, Tripoli says. “A bad preshift meeting involves disciplinary tactics. ‘Sell harder! Upsell!’ That’s terrible. Building sales through proper management means owning the
problem and spinning things in a more positive way.”
8[[i\jjk\Xd^fXcj[li`e^k_\gi\j_`]kd\\k$
`e^Xe[b\\gk_\kXcb`ek\iXZk`m\% Remind staff that
Wednesday nights the mahi-mahi is on special, for example. Talk about wine pairings. Share ideas as a group.
Offer incentives for any upselling that does occur. “Rally
your service crew around whatever is important to them
that day and get them involved,” Tripoli says.
Glk pflij\c] `e pfli ^l\jkËj j_f\j% Reinvestigating your brand is one thing. But actually going through your
restaurant experience — or having your staff go through
that experience — as if you were a guest is another. “Secret shopping,” either done by yourself or others, can reveal
those small breakdowns that together are chipping away at
your brand as a whole.
“Secret shoppers cost money,” Miick says, suggesting that
staff members become the secret shoppers instead. “Have your
team come in a little early and sit in every seat of the restaurant
over a period of a week. Have each person look around from
that seat and report back on what they see. Is there a light glaring in my person’s eyes? Am I looking at a trash can? How is
the music different at Table 1 versus Table 12?”
Miick has offered movie passes, dining discounts, cash
and other paybacks for staff members who report these
findings honestly and frequently. “We would stand on the
chairs and look down, even get underneath tables. Together
we were able to have fun and actually learn something.”
For the guest, that first impression starts literally at the
first door. Is the painting on the door chipped? Is the door
handle dirty? From there, the host’s stand and noise of the
space can create the next impression. Does the host greet
guests with a smile and some welcoming words, or simply
ask, “How many”? Is the music excruciatingly loud? These
are important details that together contribute to a guest’s
total experience about your restaurant.
Next, are the tables or chairs dirty? Are there tables nearby
that need to be bussed? Miick has had staff members, friends
and other secret shoppers inspect a restaurant from every
angle, using all five senses to make a judgment.
Analyze the bar as well, he says. Have a secret shopper
report back on the length of time it takes to get a drink as
well as on the friendliness of the bartender and cleanliness
of the bar. In many cases, guests will sit here first before
ever getting to a table.
KiXZbk_\Ê\e\i^p%Ë Good food, cleanliness and interesting décor all help contribute to a positive guest experience, but again, service is important for helping create that
“energy” that successful restaurants have, Miick says.
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“It’s about the experience and emotional connection with
the guest,” he says. “Have the servers become order takers, or are they an extension of the brand? Are they excited
about the food? Does the energy stop at the table once the
server walks away?”
Getting the staff involved in a rebranding or rejuvenation
is an important piece of the puzzle, if not the most important element, Miick says.
Good staffing starts with the hiring process. Restaurateurs
with staff shortages tend to make rash hiring choices. This
can be a kiss of death, even for an otherwise great concept.
Says Miick, “Operators should look for why that applicant is looking to work in the restaurant industry specifically when there are many other industries out there. Why
do they want to wait tables versus sell shoes or cars?”
What intrigues them about the restaurant industry?
It’s also important to get regular feedback from staff, other
than the secret shopper idea. Using SurveyMonkey and other
easy and anonymous Web-based surveys helps gather this type
of feedback. Even Yelp and other online user review programs
can help operators receive feedback, both positive and negative. If the staff is unhappy, chances are the guests will be too.
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Analyze which menu items are selling and figure out
where sales are floundering, Tripoli says. “Go back for a few
months through your item sales reports and look for trends
based on what people are ordering so you can see where your
strengths are,” he says. See which entrée items, which desserts and other items are moving at lunch and dinner. Also,
compare year-over-year sales; did something sell well in the
first quarter of last year but is suffering currently?
GcXpkfpflijki\e^k_j% So you’ve now figured out your
hot-ticket menu items. Play up those and consider dumping
the nonselling ones, Tripoli says. “Create special combinations of those items to make them more profitable,” he says.
For example, say your seafood sells well. Consider running
a special with two grilled fish items on the same plate so you
can charge a little more and combine customers’ favorites.”
“I don’t recommend discounting any of these items as
the special,” Tripoli says. “Instead, combine items already
in-house that you know are popular. This helps create more
new items out of existing ones.” The guest will likely pay
the extra dollars for the new and exciting offerings based on
what they already enjoy.
DXeX^\]ff[Zfjkj%Food costs have been on the sharp
increase in recent years. Prices for proteins and dairy have dramatically risen in just the last year. Managing these costs can
significantly balance out a deflated bottom line. In fact, it can
be an easy first step — too easy. It’s easy to want to switch from
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a high-quality, high-cost ingredient to a lower-cost one. But the
trick is to reduce food costs without sacrificing quality.
Many restaurant operators and chefs have looked not to
swap out ingredients, but to better showcase those goodquality meats and proteins by reducing portion sizes in discreet, yet meaningful ways. Bumping up sides like ancient
grains, farmers market vegetables, delicate lettuces and
other foods can help round out the meal and add interest.
The days of giant steaks and potatoes are on the outs.
In fact, the “small plates” trend continues to remain in full
force. And, for good reason, Tripoli says. They have larger
profit margins per plate, and allow guests to create their own
“tasting menus.” Groups that order multiple shared plates often order more than they otherwise would if ordering their
own entrees. Of course, bigger tickets mean bigger profits.
:fej`[\iki\e[j%Trends come and go; however, like
fashion consumers, restaurant consumers can ditch the classics for what is “in” now, especially in fickle markets, like
large urban metropolises with a younger consumer base on
the prowl for “what’s next.”
Some trends seem to stand out more than others. Greg
Christian, founder and principal of Beyond Green Sustainable Food Partners, a sustainable foodservice/restaurant consultancy says, “You’re selling a story. When I went ‘green’
with my catering business my sales grew 44 percent that
year, and continued to improve for three years in a row.”
Popularity of food culture, driven by media and celebration of food personalities, is driving some of this food trend
consciousness. “Consumers are going to Whole Foods, they
have way more information than ever before, and they are
in the know,” Christian says.
“All the high-end guys are [catering to the healthy and
local dining movement] because they know they can charge
$20 for a salad, and consumers will pay for it. At the same
time they’re giving customers a good meal they’re also
helping the world with every bite taken.” It’s a strong message that can boost your brand as a socially conscious business — or at least seem sufficiently hip to attract statusconscious young consumers.
One way to keep up with food trends in your market is
to dine out. “Go out and eat other people’s food,” Christian
says. “Keep tabs on what [your competitors] are doing.”
That includes making mental notes of what seems to be
working for them, as well as what seems to be failing.
Improving the end of the meal. “Just like there are
segments in the restaurant industry, there are segments, or different points of a meal that must be looked
at,” Miick says. Desserts especially shouldn’t be overlooked as they are the last bite, the last “segment.”
Even after-dinner drinks shouldn’t be an afterthought.
With all-night cocktailing growing as a strong trend
these days, consider offering an interesting lineup of
ports, cordials, brandy or even handcrafted after-dinner drinks. These boost check averages, and can be
an upsell to a guest who complains he or she is too
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full for dessert. Like Jell-O, there is always room for a
brandy, Kahlua, etc.
Having a separate dessert and after-meal drink menu is
a tried-and-true strategy to boost these sales. If the guest
is required to make these decisions while ordering off the
main menu, you might not have a shot at upselling these
items at the end of the meal.
9ffjkk_\YXi% On that note, bar sales have remained
steady in recent years, even as food costs have escalated and
dining out has dropped, research from Technomic has suggested. Now is the time to take another look at your beverage and/or bar program and look for creative ways to boost
this high-profit margin area.
“If you haven’t already invented some specialty drinks
for the bar, do so,” Tripoli says. “Work with the seasons and
fruits from the region. Try a fruit and tequila cocktail in the
summer, or a gin-based drink that’s colorful and cool.” The
small plates concept works at the bar, too — bar “snacks”
for a few extra dollars or offering the appetizer list here
can pull in extra food sales from customers who might have
otherwise just come for drinks.
;\k\id`e\ jdXik [`jZflekj% Discounting can be
a powerful tool for boosting customer traffic, but proceed
with caution, Miick says. “Whatever you discount, do it
with intention. Don’t end up there by accident, and I assure
you, sales will go up,” he says.
For example, Miick points out a pizza concept he once consulted that saw its sales drop $4 million in one year during a recession. Further analysis found that sales were subtly sagging
on just one or two days each week, but those were adding up.
“One of the staff members came up with the idea to
not just discount across the board, but offer the half-price
pizza on Mondays as long as unemployment was above
10 percent,” Miick says. With no jobs to be had, no one in
the local community was eating out. The half-price pizza
move, combined with a takeout Tuesday special, led to a
sharp uptick in both dine-in and carryout sales. “They
went from an $8,000 Monday to an $18,000 Monday.”
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I\`e `e lk`c`kp Zfjkj% Energy and water is only getting
more expensive in most parts of the country. Equipment start-up
and shut-down scheduling can prevent equipment from running
overtime during off-peak hours, and thereby lower energy bills.
“I would keep the equipment start-up time posted on the prep
lists next to each piece of equipment,” Miick says. That way staff
know the schedule for powering up the oven, for example.
Installing inexpensive submeters in different areas of the
kitchen can also help pinpoint the source of excess energy
usage, Christian says. And, of course, replacing outdated
equipment — when the time comes — with Energy Star or
other energy-saving pieces can be worth the initial investment.
Many Energy Star pieces can save 40 or more percent on energy costs in just one year, a savings that can measure into the
thousands of dollars.
DXeX^\nXjk\% While energy and water costs continue to
escalate, waste hauling and sewage costs are also on the sharp
incline. If you really want to know how much your daily food
waste is costing you, separate the waste and weigh it daily,
Christian says. Alternatively, establish a recycling or even a
composting program to cut down on straight garbage-hauling
costs. Again, the message you tell by doing this creates a powerful marketing campaign positioning you as an environmentally conscious business.
Watch trimming and prep work, too, Christian says. Avoid
overprepping food or consider prepping throughout the day in
smaller batches. A transparent waste receptacle in the kitchen
shows the staff and you how much food is being tossed out due
to sloppy trimming of protein, for example.
Also give some thought to which cuts you should have in your
kitchen to serve your needs for the best price. For a chicken entrée,
buying 6-ounce breasts might be worth the money, but for chicken
salad, random-sized breasts will work just as well for less.
Some items lend themselves to preportioning during
prep, others don’t. For sauces and soups, make sure the
appropriate-size ladle is handy, and that the people plating
know to use one ladleful only. Vegetables and rice might
work better with a scoop or kitchen spoon. A spoon might
result in a better-looking presentation, but make sure that
the cooks are given direction about how full a spoon to use.
Spot-checking by a sous-chef or manager is never a bad
idea. A little mistake here and there is no big deal, but consistent, repetitive mistakes add up fast. Time spent working
with your cooks on portioning and presentation is always
time well spent.
In addition, buying nonperishable items in bulk from vendors can also cut down on packaging waste, Christian says.
“If you figure you buy 10 cases of #10 tomatoes a week you
have to throw out all of those cans at some point. Call your
vendor and ask for tomatoes in five-gallon buckets. It’s up
to them, not you, to figure out how to do that.”
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Restaurant marketing begins and ends tableside. “Make
sure your manager or you, the owner, touch each table. Find
out if the guest has been there before. If not, get them to
sign up for a newsletter,” Tripoli says.
Slumping sales may mean you need to expend more
energy on low-cost promotional efforts, including your
social media campaign. It is not “rocket science” but it
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One of the first things to do when you see sales
trending down is to listen.
Ask questions and then keep your mouth shut.
In your operation and circle of associates are many
sources of business intelligence.
Restaurant workers tend to work at multiple restaurants, change jobs and congregate with each other after
shifts, and share information. If you ask them for inside
and outside “intelligence” in an earnest and friendly way,
you might be surprised how much you will learn.
Another great source of information is your vendors, particularly the liquor and wine distributors.
While they tend to not speak about individual operations (and, frankly, you don’t want them talking about
your business to your competitors) they know how
the market is doing, in general, as suppliers. They see
the weekly orders, they’re in the field making sales
calls and visiting with restaurants at all levels. Most
are on commissions so they pay attention to business
levels and can be a great source of information that
helps you put your situation into context.
Fellow restaurant owners and managers in your
market can tell you a lot about the current state of their
sales (if they are inclined to share). Most friendly competitors are still competitors and they may be reluctant
to share too much information; however they are often
willing to provide a sense of how things are going. Join
your local restaurant association and attend meetings
as regularly as you can to glean a great deal of information on what is happening in your marketplace.
Certain service providers, including American
Express and PowerCard, offer weekly and monthly
reports showing diner usage and spending in your
restaurant. Moreover, they provide comparative data
to see how your restaurant compares with others.
American Express also has a program in which they
combine sales activity on their cards by category, and
for a price you can use the data to see how you do in
comparison with other restaurants.
can languish as a result of inattention. While you don’t
need a “social media marketing expert” to save the day
there are professional services that specialize in making
sure your online activity is continuous and provide the
reports so you can monitor the activity rather than produce the activity. At the same time some restaurants have
gone the young staffer route by convincing one of your
interested employees — who probably spends half of his
or her waking hours staring into some kind of screen
anyway — to work your Facebook page for a little extra income. That said, it pays to know what they are do+?1?=>
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ing and be able to stand in for them. Young staffers are
known to move on to other work without much notice.
“It’s easy enough to get one of the younger collegeaged staff members to spend an hour or two a day managing the Facebook page or sending a tweet about today’s
special,” Tripoli says. “Update both with weekend plans
or what the chefs are doing or talk about an upcoming
event.” Tripoli once saw a bakery use Twitter to tell the
community about fresh-baked cookies coming out of the
oven, right at 3:30 when the neighborhood school let out.
Without fail, that simple tweet would lead to a regular
line out the door.
Sending more tweets and making stock from protein
trimmings sounds simple, but they add up without adding expense. It’s about creating more opportunities to
grab potential sales, when current sales falter. Rather
than jumping the gun to change an entire menu, reconcept your concept or change your entire décor, take a
close look at your operations and management. Taking
the bigger perspective can help you turn things around
when business slows.
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When sales are flagging is a good time to contemplate your
systems and procedures, as it forces you into an analytical and
logical mindset, rather than grasping at straws. Again, you cannot
control the economy or your local market; however, you can control your operational efficiency and effectiveness. We could write
a book on this subject, but consider the following examples.
A restaurant rule of thumb is that 60-80 percent of your
business comes from repeat customers; it’s paramount that you
meet or exceed your guests’ expectations over and over. However, too many operators fail to recognize that to be consistent,
they must have systems in place that promote consistency.
For example, many operators have the mindset that to
draw more guests they need to first increase their marketing and promotions. While true that better marketing can
generate more traffic, if you don’t provide your customers
with an excellent guest experience you’ll only succeed in
more rapidly letting more people know that you don’t have
good customer service.
Establishing an all-encompassing customer service policy will be a work-in-progress project that should be done in
phases. In fact, your staff and management should continually
review ways to improve the guest experience. But the first step
in establishing consistent customer service is to create some
guidelines and expectations for staff and management. Your
team’s objectives will be to define and document the following
components of your customer service policy:
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›>i\\k`e^gfc`Zp% It doesn’t matter if you are a full-service dinner house, fast-food burger joint, or a family pizza
parlor; making sure your guests feel welcomed as soon as
they walk through your doors is a must.
›Jk\gjf]j\im`Z\% Every staff member should be aware
of the service cycle for guests. For limited-service venues
the cycle begins with the ordering phase and continues with
the preparation and delivery of the order. For full-service
establishments it begins when the guest approaches the host
stand, and then continues with a systematic method for order taking, delivery of product, payment of the check, and
preparation for the next table.
›K`Zb\kk`d\^l`[\c`e\j% Regardless of service style, your
restaurant should establish service time benchmarks for each
of the kitchen service order steps (appetizer, salad, entrée and
dessert service). The same is true for beverage service.
› ?Xe[c`e^ ^l\jk ZfdgcX`ekj% No matter how good
your restaurant is, you’re going to experience complaints
from time to time. Contrary to popular belief, you don’t lose
guests every time you make a mistake; you lose them when
you don’t properly handle their complaints. Your staff must
be trained on a consistent method for handling complaints.
As another example, you need to understand the importance to systemize counting key items daily. This is one of
the most effective cost-saving measures any restaurant can
carry out. The objective of this practice is to identify 10-15
high-cost, high-use items that you use every day, then to
track the purchases and sales of that item daily.
For example, let’s say that your restaurant offers several
items that incorporate a high-quality Angus brisket. The
manager begins the day by counting the number of these
briskets on hand and records it to the key item tracking
sheet. She then enters the number of briskets received from
the vendor that day. The number sold for the day is taken
from the item sales mix report (includes all items that use
brisket). Finally, she counts the actual number of briskets
left at the end of the day. This method allows you to account
for high-cost items on a daily basis, and quickly alerts you
to costly inventory shrinkage due to theft or waste.
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While some linguists believe it is a misinterpretation of
Chinese characters, we’ve all heard that the Chinese word
for crisis is composed of the characters for danger and opportunity. Myth or not, in the case of running a restaurant,
a downturn in sales can be a crisis that presents opportunity
if you can keep a clear head and figure out how to maximize
business and your operational effectiveness and efficiency.
Not only will you be better able to “stop the bleeding” during a downturn, you will improve practices that will reap
RS&G
even greater profits when sales increase.