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 GX^\*- $5.95 U.S. / CANADA G8><,) 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. >]W\b( /aaSaabVS5cSab3f^S`WS\QS 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 +?1?=> f aaa<O]^K_\KX^9aXO\MYW 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. f 199. </=>+?<+>/?<= +</ +6A+C= 6/+<8381 “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. 8[[`k`feXcI\jfliZ\j1 ?fnkfKliePfli>ff[I\jkXliXek @ekfX>i\Xk9lj`e\jj nnn%i\jkXliXekfne\i%Zfd&glYc`Z&,-,%Z]d >]W\b (/aaSaabVS;S\c 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 NOW, OPTIMIZING THE WAY YOU MANAGE INCOMING CASH CAN BE ON YOUR MENU. With Cash Flow Options from PNC and our PNC Advantage for Retail Businesses, we can help you take advantage of everyday untapped opportunities. 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Cash Flow Options is a service mark of The PNC Financial Services Group, Inc. © 2012 The PNC Financial Services Group, Inc. All rights reserved. PNC Bank, National Association. Member FDIC 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 f 199. </=>+?<+>/?<= +</ +6A+C= 6/+<8381 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.” 8[[`k`feXcI\jfliZ\j1 D\el<e^`e\\i`e^9Xj`Zj1 ?fnkfDXb\PfliD\elPfliKfgJXc\jg\ijfe nnn%i\jkXliXekfne\i%Zfd&d\dY\ij&**'%Z]d >]W\b!( /aaSaabVS0OQY]TbVS6]caS 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.” 8[[`k`feXcI\jfliZ\j1 ?fnI\jkXliXekjCfj\Dfe\pNfib`e^N`k_=ff[ nnn%i\jkXliXekfne\i%Zfd&d\dY\ij&+(0%Z]d >]W\b"( /aaSaa;O`YSbW\UO\R>`][]bW]\ 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 +89>2/< </+=98 A/ 2+@/ 98/ 79?>2 +8. >A9 /+<= 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?=> f aaa<O]^K_\KX^9aXO\MYW ! 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. 8[[`k`feXcI\jfliZ\j1 ?fnkf8kkiXZk=XZ\Yffb=Xej Xe[<e^X^\N`k_:ljkfd\ij nnn%i\jkXliXekfne\i%Zfd&d\dY\ij&(+0/%Z]d >]W\b#(/aaSaaG]c`AgabS[a >]ZWQWSaO\R>`]QSRc`Sa 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: " f 199. </=>+?<+>/?<= +</ +6A+C= 6/+<8381 >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. 8[[`k`feXcI\jfliZ\j1 I\jkXliXekJpjk\dj10'$[XpGcXe FeN_`Z_Jpjk\djkf@dgc\d\ek=`ijk nnn%i\jkXliXekfne\i%Zfd&glYc`Z&((.*%Z]d Bc`\1`WaWa7\b]=^^]`bc\Wbg 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.
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