Mistakes Most Restaurants Are Making!!! And How TO Fix Them!

Top Eight Restaurant Mistakes and How to Fix Them

Understanding the Business of Restaurants

• Roger Bod emphasizes that running a restaurant is not just about food and drink; it's about running a business focused on entertainment, consistency, and customer experience.

• Building a strong brand is crucial; it should evoke a common understanding among guests and staff, similar to well-known brands like Starbucks or Nike.

• Influencers play a significant role in driving business; loyal customers can be incentivized to promote the restaurant through social media or partnerships with local concierges.

• Creating additional profit centers, such as retail merchandise, enhances revenue streams while team members act as ambassadors for the brand.

The Importance of Company Culture Over Mission Statements

• A mission statement alone is insufficient; true company culture reflects team spirit, morale, and accountability among staff.

• High employee turnover can be mitigated by fostering an environment where expectations are clear and achievements are recognized.

Leadership vs. Management

• The distinction between being a manager and being a leader is critical; leaders inspire and empower their teams rather than simply managing tasks.

• Empowerment involves giving employees opportunities to take responsibility for their roles while recognizing their contributions to foster loyalty.

Setting Clear Expectations

• Establishing clear expectations through "career descriptions" instead of traditional job descriptions helps align employee performance with organizational goals.

• Accountability systems must be in place to ensure employees understand their responsibilities from day one.

Enhancing Customer Experience Beyond Order Taking

• Many servers default to merely taking orders without engaging customers or providing product knowledge, leading to missed sales opportunities.

• Training staff on upselling techniques—like suggesting premium products or add-ons—can significantly increase check averages.

Utilizing Product Knowledge for Sales Growth

• An analogy comparing restaurants to icebergs illustrates that most sales potential lies beneath the surface, requiring proactive engagement from staff.

• Upselling strategies include recommending wine pairings or dessert options that enhance the dining experience while boosting profits.

Recognizing Performance and Career Advancement Opportunities

• Recognizing top performers is essential for retention; providing pathways for advancement encourages employees who excel in their roles.

Employee Recognition and Incentives

Importance of Recognition Programs

• Weekly recognition rewards programs were implemented to acknowledge employees, particularly those aspiring for advancement, while also valuing those who prefer their current roles.

• The busiest times in restaurants are typically Friday and Saturday nights, making it ideal for recognizing staff when most employees are present.

Difference Dollars Program

• The "Difference Dollars" program recognized employees who went above and beyond their job responsibilities, fostering a culture of teamwork and support.

• Employees could nominate peers for recognition; the owner maintained an open-door policy encouraging suggestions and nominations from all staff members.

Celebrating Achievements

• Winners were announced during pre-service gatherings on busy nights, with detailed acknowledgments of their contributions followed by tangible rewards like cash and energy drinks.

• Recognized employees' achievements were documented in framed certificates displayed throughout the restaurant, reinforcing a positive company culture.

Building Company Culture

• The initiative contributed to a strong company culture centered around hospitality, family-like relationships among team members, and enjoyment at work.

Utilizing Supplier Relationships for Rewards

Prizes from Suppliers

• Partnerships with suppliers provided valuable merchandise as prizes for employee recognition programs; this included electronics and branded items.

• The owner leveraged excess promotional items from suppliers to create an engaging employee recognition program that motivated staff through tangible rewards.

Impact on Morale

• New hires experienced immediate morale boosts when rewarded early in their tenure, enhancing engagement and commitment to the team.

Menu Profitability Management

Costing Out Menu Items

• Regularly costing out menu items is crucial for understanding profitability amidst rising costs; each dish should have a detailed cost sheet.

• An order guide or supplier invoices can help break down ingredient costs per dish to determine overall plate costs accurately.

Calculating Plate Costs

• Example: A popular pizza's ingredients were meticulously calculated to reveal its total plate cost of $2.80 against a selling price of $18.

• Understanding food cost percentages helps identify profitable versus less profitable menu items; many restaurants overlook this critical analysis leading to lost revenue opportunities.

Inventory Management Practices

Importance of Taking Inventory

• Accurate inventory management involves calculating the value of goods on hand rather than just placing orders; this should be done consistently over several weeks.

Two-Step Inventory Process

• A systematic approach includes listing all food items across storage locations followed by physical counts at consistent times post-busy periods.

Understanding Prime Costs

Calculating Prime Costs

• Prime costs encompass food/beverage costs plus labor expenses; knowing these figures is essential for maintaining profitability within acceptable ranges (55%-65%).

Steps to Calculate Prime Costs

• Step 1: Determine food cost percentage (e.g., 32%).

• Step 2: Add beverage cost percentage (e.g., 22%) then average them.

• Step 3: Include labor costs to find total prime cost percentage.

Recap of Key Restaurant Management Mistakes

• Running a restaurant requires business acumen beyond operational management; establishing mission statements fosters company culture.

Restaurant Profitability Insights

Understanding Menu Profitability

• The speaker highlights their expertise in restaurant profitability, sharing experiences with two clients generating around $3 million in annual sales, revealing significant profit losses due to unoptimized menu items.

• One restaurant left a potential profit of $343,000 on the table while the other was closer to $360,000; this realization prompted immediate re-engineering of their menus.

• Emphasizes the importance of ensuring that every menu item contributes similarly to profits, advising against selling items that incur substantial losses.

Inventory and Cost Management

• Discusses the critical need for accurate inventory management to avoid waste, theft, and spoilage which can lead to financial losses.

• Introduces the concept of Prime Cost as a key metric combining food and beverage costs with labor costs; suggests aiming for a Prime Cost between 55% and 65%.

Podcast Promotion

• The speaker promotes their podcast available on major platforms, featuring interviews with industry leaders discussing various aspects of restaurant management including guest service and marketing.

• Mentions notable guests like John Taffer from "Bar Rescue," emphasizing valuable insights shared over 427 episodes aimed at improving restaurant operations.

Academy Offerings

• Introduces an academy designed for restaurant owners and managers providing actionable ideas, templates, and comprehensive training modules covering finance, sales training, and marketing strategies.

• Highlights a program called "Sales Stars" that trains staff in hospitality skills leading to increased sales through effective product knowledge and customer engagement.

Marketing Efficiency

• Warns against ineffective marketing spending without tracking ROI; stresses using proven low-cost marketing strategies that yield measurable results.

• Offers a special promotion code (ts25) for attendees interested in joining the academy at a discounted rate of 25%, encouraging them to utilize resources effectively.

Training Systems Implementation

• Describes two versions of the academy: single-user for individual owners or leaders versus an enterprise version allowing multiple users across locations with team-based course assignments.

• Explains how the academy empowers employees by providing tutorials on implementing systems like inventory management while tracking progress through personal dashboards.

Closing Remarks

• Thanks Tera Slate for supporting his podcast presentations; mentions their products such as waterproof menus which are beneficial for restaurants needing durable materials.

• Encourages listeners to reach out via email for personalized business challenges or questions; notes that membership includes a one-hour consultation call.