The Cure for Common Sense-itis – Realize there is no such thing as common sense

By David Scott Peters

www.therestaurantexpert.com

Do you sometimes just want to fire everyone in your restaurant and just do all the work yourself? Do you wonder why people can’t just do it the way you want it done? Do you ever find yourself saying, “IT’S COMMON SENSE!”

If you can relate to any of the above, you probably suffer from “common sense-itis.”

I define common sense-itis as a never-ending headache you have from repeatedly banging your head against the proverbial brick wall known as running your restaurant.

This term is most accurate when applied to restaurant owners who think their managers should just know how to do things because it’s “common sense.”

Look, the definition of common sense clearly states that it’s a shared understanding based on experience. I can tell you right now that your managers, each and every one of them, do not share your experiences. They have not grown up in your shoes. They do not possess the same core values. They are not you and will not automatically do things your way, just because you think they should have common sense.

Get rid of your case of common sense-itis once and for all with an easy two-step process.

Step 1 – Create checklists for EVERYTHING!

Creating checklists sounds so simple, yet I can’t even begin to count how many restaurants don’t have them in place. And when checklists do get drafted, many restaurant owners are not explicit enough in what they want done or how they want it done.

Let me tell you the easy way to avoid this pitfall. Grab a pad of paper, stand outside your front door and start writing down EVERYTHING you see on a daily basis that needs to get done. Especially note the things that really get your blood boiling because they seem so obvious. Continue writing as you walk your restaurant.

Be precise in your expectations. For example, “Clean glass on front door every two hours, starting with opening shift.” Then list the times.

When your list is completed, task one of your managers to customize opening and closing checklists incorporating every item on your list for every position. Remember, you cannot be too specific.

Once you have completed this process you are halfway to curing your common sense-itis. Plus, your management team is happy. They’re happy they no longer have to read your mind or dread your inevitable freak out. With lists in hand, your management team is cool, calm and collected when they see you coming. They can say with confidence they didn’t miss anything if they followed the simple checklist.

Side Note: Your checklists are never finished. You will continue to add all of the new things that drive you crazy as they come up. Don’t be surprised if your checklists are two to six pages long. But also don’t be surprised at how well they work.

Step 2 – Follow up on the checklists.

Now that you have your checklists and have trained your managers and staff to use them, the easy part is done. You will see results almost immediately. I guarantee it.

But here’s what tends to happen. About three weeks after implementing checklists, when your managers see that you are not looking in the designated binder to confirm the checklists are being used, your managers will start to slack off. And once they slack off, everyone else will slack off. Eventually they’ll quit using them altogether.

That is unless you hold them accountable.

How do you hold them accountable? To start, review the checklists daily at first. Find what your managers are missing and point it out. Better yet, show them how you want it done. It’s your job to coach your managers and help them be successful.

Once you see they are following them routinely, you can start to randomly spot check them a few times a week.

These checklists will keep everyone on the same page for as long as they’re maintained, but you must check them or they WILL go away.

When you don’t communicate your expectations to your managers, you’re setting them up to fail. You’re also setting yourself up for endless frustration. Checklists give you an easy way to communicate your expectations and an easy way for your managers to know what is expected of them. This way, everyone is happy.

Cure your common sense-itis today with checklists.

David Scott Peters TheRestaurantExpert (1)David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. He is best known as the SMART Systems guy who can walk into any restaurant and find $10,000 in undiscovered cash before he hits the back door… Guaranteed! Learn more at www.TheRestaurantExpert.com.

 

Not-so-happy meal: McDonald’s satisfaction lags

McDonald’s just can’t climb out of the customer-satisfaction cellar.

For the 20th year in a row, McDonald’s ranks dead last in customer satisfaction in a national survey of patrons of 12 major fast-food chains by the American Customer Satisfaction Index… (read more)

Source: USA Today

Stop the Bleeding Now

By David Scott Peters

www.therestaurantexpert.com

For decades restaurants have been run with one key number in mind to ensure they have a chance of making money. That key number is called prime cost.

What is prime cost?

Prime cost is the grand total of your total cost of goods sold, which includes both food cost and liquor (also known as pour cost), and total labor cost. In order to have an accurate prime cost number, you must be on an accrual accounting system (sign up for a consultation, and I’ll cover accrual accounting with you).

To calculate your actual cost of goods sold accurately, you start with you beginning inventory, add to it your total purchase for that period (in this example, let’s say one month), then subtract your ending inventory. This sum product of this calculation will give you your total cost of goods sold (the total of all product you physically used or left your shelves during that month). You can quickly see that if you don’t follow this formula and show your total purchases as your cost of goods sold that you will NEVER have an accurate number to evaluate your business… and that’s how many businesses go wrong fast.

Now, while total labor cost sounds simple, and it really is, many restaurants still calculate this number wrong. Total labor cost includes not only the total wages your employees have earned for that period (again for this example we will use a month), and this is where most restaurants stop, but is also includes total taxes, benefits and any insurances paid (workers’ compensation and health insurance).

What is the ideal prime cost?

While I am not a trained economist, I am not a certified public accountant and I am not a statistician, what I am is a restaurant expert who works with more than a hundred restaurant owners in all of North America on a daily basis. And what I can tell you is that if your restaurant is doing at least $800,000 or more a year that the prime cost target is 55 percent. The margins are just too tight to go any higher.

How to get to 55 percent

I know what you are thinking: “NO WAY! There is just no way I can achieve that target prime cost and still have anybody on the floor to serve the guests or in the kitchen cooking food, or without reducing the quality of the product I serve.”

The reality is there is a way, and I have members achieving it over and over again.

Prime cost is something I come back to again and again because it’s the magic number. It’s a core component of my teaching. But for the purposes of this blog post, let’s look at some sample labor strategies and systems you can use to get you closer to 55 percent.

1)      Budget Labor: Use our labor allotment system, members have seen a minimum reduction in labor cost of at least 1 percent and many as high as 10 percent. It’s much easier to hit a target when you have one, and it’s that much easier when you’ve spelled out for your managers how much money they have to spend, how many FTEs (full-time equivalents) and how many hours they have to schedule each and every schedule in order to stay within your budgeted targets.

2)      Tracking: Track labor on a daily basis enables management to make small changes on a daily basis to stay on budget.

3)      Training: Implement a training system (we offer one for full-service and one for quick-service as well as for management training) to reduce labor costs due to lower turnover and increased sales due to happy guests.

While the list goes on, these are actionable systems you can implement today and will be on your way to a 55 percent prime cost. What is really incredible is they work for any restaurant, no matter what kind of service or food you serve.

No matter what path you choose… TAKE ACTION! And get your prime cost to 55 percent.

David Scott Peters TheRestaurantExpert (1)David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. He is best known as the SMART Systems guy who can walk into any restaurant and find $10,000 in undiscovered cash before he hits the back door… Guaranteed! Learn more at www.TheRestaurantExpert.com.

 

How to Monitor Food Profit Margins With a Key Item Report

By David Scott Peters

www.therestaurantexpert.com

When food costs rise, profit margins sink and restaurant owners must take action. And one vital solution is the key item report.

The key item report is a daily tracking tool that puts the expensive itemsspecials or other items in need of control in a vice grip. This report also helps prevent and identify theft, and most importantly gets the kitchen team to treat these products like precious gold.

At the start of each day or each shift, depending on how much control is needed, take a count of each item that will be tracked. In the beginning this may be five to 10 items. Over time, that number may grow to as many as 40 items or more.

To create your restaurant’s key item report, create six columns with the following headers:

  1. Opening Inventory
  2. Prepared/Purchases
  3. Total Available
  4. Ideal-Ending Inventory
  5. Actual-Ending Inventory
  6. Over/Short Column

To start, list the five to 10 items you want to track down the side as rows. In the first column, put the count you have for each item in the Opening Inventory column in the report.

Upon prep or delivery of these items, write the quantities in the Prepared/Purchases column. Next, total them up and write that number in the Total Available column. This represents the total number of those items available for sale that day or shift.

At the end of the day or shift, run an item or PLU report on the point of sales system (POS) to see how many of each item that you tracked sold. Write that number in the Ideal-Ending Inventory column.

Then take a physical count of each product tracked that you have remaining on hand and document that in the Actual–Ending Inventory column. Finally, compare the Ideal and Actual numbers and write in any discrepancies in the Over/Short column.

Yes, it’s that easy. To really pack a punch, learn how to use the waste sheet to complement the key item report.

David Scott Peters TheRestaurantExpert (1)David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. He is best known as the SMART Systems guy who can walk into any restaurant and find $10,000 in undiscovered cash before he hits the back door… Guaranteed! Learn more at www.TheRestaurantExpert.com.

 

RDS Southeast GM Walt Davis Featured in Inc. Magazine Article

Retail Data Systems Southeast General Manager Walt Davis was featured in a recent Inc Magazine article on the future of mobile technology in the restaurant industry. Restaurants have taken advantage of mobile technology to gain a better understanding of their customers while improving the customer experience.  Learn more by reading the full article here.

http://www.inc.com/jill-krasny/the-ipad-will-take-your-order-now

Top Business Killers

By David Scott Peters

www.therestaurantexpert.com

You can’t afford to not make a great first impression. There are too many other options for your customers in today’s marketplace. And with fewer dining out experiences per week, the amount of chances you have is also down.

Here are five points of contact I often find get ignored in independent restaurants. If you ignore these five points of contact, you reduce your opportunity to build your business. You actually drive business away.

Increase your chances of winning and keeping business.

  1. First contact – make it count. Your guests encounter you the first time in many ways and all must be stellar.

–          In print: whether it’s an ad, a direct mail piece or a flyer going out to surrounding businesses, it must reflect your business. When they show up, they should have a reasonably good idea about what they’re going to experience in style, service, menu and price. For example, don’t have 10-cent-wings night with white tablecloths. Don’t woo them in with low-priced menu items or specials when your average ticket price is much higher. Be who you are target the right audience with that message.

–          Word of mouth: Provide a WOW experience to every customer every time so that the word-of-mouth message that precedes that visit is lived up to. In other words, if a customer has a great experience and tells their friends about it, their friends should be able to count on a WOW experience as well. Remember, people are more protective of their positive comments and very open with their negative ones. One terrible experience will travel much faster than five WOW experiences. If one person’s word-of-mouth recommendation is rebuked by your lousy service, you’ve lost the original customer as well. Nobody likes to be made the fool.

–          Drive/walk bys: Make sure your facility looks good. Are the lights all working and turned on? Is it inviting? Is the paint cracked and peeling, or clean and fresh? Does the outside match your style, does it speak to who you are as a restaurant? When someone pulls up to your restaurant, do they want to get out and go inside?

–          Phone: People don’t think about this and it drove me crazy as a manager. You can’t take one phone call for granted. Does it take more than two rings for phone calls into your restaurant to get answered? If it takes too long, you could be giving the caller the impression that their time and effort isn’t important to you.

o   Answer with a smile: You can literally hear it on the other end.

o   Use a tagline, your USP: It’s designed to sum up your business, use it.

o   Those who answer must be trained: Whoever answers the phone must know about the business, such as hours of operation, directions, specials, games on the flatscreens that night, all the basic questions.

You have one chance to make a first impression; there are no second chances.

  1. Facilities – a little spit and polish can only help.

–          Entrance: When people walk up to your front door, is there trash? It doesn’t matter if you share a strip mall with 20 other tenants who never pick up trash. If it’s in front of your door or around it, pick it up. Make your employees aware and make sure they’re cleaning it up when they see it. Do you let your employees smoke out front and leave their cigarette butts? Are your windows clean?

–          Dining room/tables: Your customer has come this far; they’re in the dining room. What will their impression be? Are the tables clean, the chairs free of crumbs, condiments clean and organized on the tables? Are your tables balanced? Your team can see it, make sure they’re eyeing it and keeping it all clean.

In Phoenix, when Sue and I go out, there are so many restaurant choices, you can literally drive down a two mile stretch of road and see about a hundred restaurants. We can be picky, make judgments on the appearance. When it comes to restaurants, we can definitely judge a book by its cover.

  1. Greeting: If you’ve been to my workshop, you know about my GUEST philosophy. The G stands for greet and it must be done within 30 seconds. Make it a rule that someone is near the door at all times. Never fall down on this job because a guest should never have to approach you. And train your employees to all be aware of it. If they’re not sure if someone has been greeted and helped, they should ask. Even if we THINK someone has been helped, don’t ASSUME. You know what they say about what happens when you assume? It makes an ASS out of U and ME.
  2. Bussers: Try to be seen and not heard. And this doesn’t just apply to bussers. It applies to anyone who busses a table, from a server walking by to managers. My mom taught me this rule: No one comes in or out of the kitchen empty handed. If you see dishes on a table, pick them up, and do so without disturbing guests. How do you train your servers to see it as their duty? Yes, this customer isn’t in your section today, but they may be in your section tomorrow. But they won’t come back to be in anyone’s section if they don’t have a WOW experience.
  3. Servers: Your servers spend the most amount of time with your guests. You must train them to think like a salesperson, not an order taker. In so many restaurants I see human vending machines. Fred Langley, Elite member and coach, trains his servers to change their attitude. It’s not about upselling and increasing ticket averages, but improving the guest’s experience. If the server thinks the experience will be better if the customer has a premium vodka, then the server has the attitude necessary to make the suggestion. It’s not pushy. It’s about improving the guest’s experience. They need to guide the guest, show off what they know, be the expert, what they like.

To do this, your servers must be trained in everything menu-related. They have to know ingredients, allergens, portions, prices, extras that are available, etc. Servers need to use the right words, such as “featured item” and “special.” The right words will influence the purchase.

One side note related to clean dining room: have clean and fresh menus. It must be reflective of your business, just as your entrance, your advertising and your phone greeting. Your menu is your sales tool and it costs you more to operate with sub-par sales tools than it does just to purchase new ones.

You have few opportunities to keep business, but many to lose business. Every point of contact counts.

David Scott Peters TheRestaurantExpert (1)David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. He is best known as the SMART Systems guy who can walk into any restaurant and find $10,000 in undiscovered cash before he hits the back door… Guaranteed! Learn more at www.TheRestaurantExpert.com.