Monthly Archives: November 2014

How to Plan for the Holidays in the Restaurant Industry – Gearing Down

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By David Scott Peters

www.therestaurantexpert.com

In part 1 of How to Plan for the Holidays in the Restaurant Industry – Gearing Up, we talked about the importance of planning ahead and “gearing up” for your restaurant’s season. This week we will discuss the concept of “gearing down” after your business rush is complete and planning for the next seasonal change.

Gearing down
If you have a large swing in customers – due to seasonal changes – you understand there’s a significant thing that happens every year. That’s the time when your summer or winter visitors head home and the city feels like a ghost town. Translation… sales are going to drop!

This is the time you change your staffing levels by reducing hours and let your seasonal help go. With this adjustment, you are gearing down and accommodating for the decrease in sales dollars.

What about the future?
In some areas there is an obvious seasonal change. But it isn’t that easy for every restaurant owner. Sometimes it’s just a bump during the holidays or a small dip in the summer. But it affects your business. Are you ready to learn how to forecast sales effectively and identify your seasons?

Let me walk you through it step by step. In doing so I will break it up into three distinct sections: History, Plans for the New Year and Projecting Sales.

History
The first thing to do is gather as much pertinent data from your records as you can, especially from your last 12 months in operation. This data should include the following five reports:

  1. Sales history by day for each month by category like food, liquor, merchandise, gaming or vending sales.
    2. Customer counts and average ticket.
    3. Sales log with: sales by period, total daily sales, customer counts or covers sold by meal period, weather, events, comments, item-by-item sales mix reports by sales category, catering events and sales

Plans for the new year
The second thing you must do is take the time to put into writing what you are going to do differently next year that will impact your business, whether positively or negatively. Then you should ask yourself the following questions:

  1. Will I be changing any menu items?
    2. Will I be raising my prices for food or liquor?
    3. Will I be implementing any new marketing campaigns?
    4. Will I be adding or removing any seating – new patio, etc.?
    5. What type of revenue do I think we will do in banquets and catering events?
    6. What outside factors am I expecting that can affect my sales – construction to the road, etc.?

Projecting Sales
Now finally you get to use the data you have collected on your past history and your future plans to project sales for next year. Here are the steps to follow:

  1. Edit item-by-item sales mix reports with new prices and menu items for each month.
    2. See what the percentage increase is for each month.
    3. Add 100 points to percentage increase and multiply each day’s sales for each category.
    4. Using your past customer counts, recalculate what your average ticket is now with new prices and mix.
    5. SWAG (Scientific Wild-Ass Guess) your estimated increase customer counts due to new marketing plans.
    6. Multiply additional customer counts by average ticket to project additional sales.
    7. Adjust numbers based on catering and events from historical date as well as projected data.
    8. Finally, put into writing the assumptions you used to create next year’s sales forecast so you will be able to make any needed adjustments or wholesale changes to your forecast as the year goes on.

This process not only requires quantitative historical data and projected data, it requires you use your intuitive or qualitative skills to interpret the numbers and create your projected figures.

Putting in the time and effort required to evaluate your sales forecasts and budget puts you in position to be a proactive restaurant owner and will ultimately ensure you make money, not waste it.

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/rdspos.

 

How to Plan for the Holidays in the Restaurant Industry – Gearing Up

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By David Scott Peters

www.therestaurantexpert.com

Gearing up and gearing down

The difference between making money and losing money in the restaurant business depends on how well you gear up and gear down. Proper planning truly has a major impact on your profitability.

Take into account the “season”
Restaurant owners and managers throw around a common phrase to explain their fluctuations in business – “we’re in season” or “we’re out of season,” and they’re not talking specifically about winter, spring, summer or fall. They’re referring to the time of year when they have the most, or least, customers.

Every restaurant has its own season. For restaurants in high tourist areas, being in or out of season can account for huge swings in customer counts and sales. In fact I have members in resort towns that have in-season sales increases as high as 300 percent. There are also areas of the country that have a large influx of winter visitors with customers trying to escape their cold climate in exchange for warmer weather. These situations pose some serious staffing challenges for restaurant owners.

The Importance of gearing up
Proper planning is the key to profitability. You have no chance of hitting your target numbers without knowing what kind of sales to expect on a daily basis. Projecting sales allows you to staff and purchase product properly. It allows you to best manage your cash flow. It allows you to hit your budget. And most of all it allows you to make money.

Generally restaurant owners tend to be reactive in nature instead of proactive. Let’s say you’re a restaurant owner in an area that is affected by large increase in customers for a portion of the year. For example, you know that when it starts to snow in the Midwest, like clockwork every year, your sales volumes will start to triple. If you run your restaurant reactively, once winter visitors come, lines will start to form at your door and then you start to search for help to handle the sales volumes.

The problem with this scenario is the missed opportunities. It’s not just about having enough help; it’s about having enough well-trained help. If you don’t have enough people on the floor, you miss out on sales. If you don’t have enough people in the kitchen, you have long ticket times and frustrated guests. Both represent lost revenue for that day and the future, because you’ve sent customers to your competition for the rest of the season. Even if you have enough staff, if they aren’t trained well before the season is upon you, you might as well be short-staffed because a poorly trained team can create the same scenario.

Consider the opposite scenario. As a proactive owner, you know it takes six weeks on average to rehire and sufficiently train your seasonal staff. So two months out you put your recruiting program in place, update your training manuals and menus to be prepared.

Being proactive and prepared in advance of your season will increase costs up front because of the additional training wages and staffing up before the rush of winter hits. However, it’s pennies on the dollar compared to dealing with the nightmare of running your restaurant in a reactive nature.

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/rdspos.

How to Use a Waste Sheet to Increase Profit Margins

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By David Scott Peters

www.therestaurantexpert.com

When food costs rise, profit margins sink and restaurant owners must take action. Last week, I outlined one of two simple tools you can use to lower your food costs, the key item report. This week, I’m covering the waste sheet.

The waste sheet tracks waste in the kitchen.

When an ingredient or item is double ordered, over cooked, spoils or just can’t be used any longer for any reason, it MUST be recorded on the waste sheet. Use a new form each day.

To set up your form, create the following columns:

  1. Time
  2. Item/Description
  3. Amt/Qty/Wt
  4. Reason for Waste
  5. Employee Initials

Referring to the waste sheet, write in the time the product was wasted in the Time column. Write a description of the item wasted in the Item/Description column, such as an order of chicken wings or milk. Write in the amount, quantity or weight of what was wasted in the Amt/Qty/Wt column, such as 12, 1 pound or 3 gallons.

The next step, which is probably the most important, is to write in the reason for the waste. This will be huge to help identify operational problems that can be corrected with tracking. For example, if the list shows a three gallon loss of milk and the reach-in cooler is out of temp., it’s a worthy investment to fix the cooler. Or maybe it’s Sally the new server that double orders product, and needs more training. The waste sheet provides actionable solutions.

To finish the form, the employee writing in the waste will mark their initials.

This form needs to be used right away. As soon as it is wasted, write it in. I know what you are saying to yourself, “Right! On a Friday night when we are kicking out 300 covers, I’m going to stop everything so we can write that down.”

While I wish the answer to that question was yes, I know the reality of running a restaurant is never an ideal world. So here’s what you do… just place each of the items in a clear Lexan tray when the waste happens and then at the end of the rush, go through and record each item wasted.

To make sure the waste sheet is effective, your kitchen manager or chef will value out each item wasted and initial that they did so. This figure will be very important when comparing actual and ideal food cost at the end of the period.

It’s that easy, and can be put into place in the next five minutes. And next week, I will show you one last trick – how to use the key item report and the waste sheet together. See you then!

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/rdspos.

Selling the Ticket

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By David Scott Peters

www.therestaurantexpert.com

Why is the Expo so important?

The expo sets the pace and flow of your kitchen! The expo is critical to your shift running smoothly and making sure neither your front of house (FOH) nor back of house (BOH) falls down.

Keys to a great expo

  • The expo is the ONLY person who communicates with the wheel or lead line cook.
  • The expo needs to know fire times and line processes, or who does what and how long it takes.
  • The expo should follow the pace (courses) of each table and ensure servers are not rushing or lagging tables.
  • The expo needs to be organized and be able to project his or her voice.
  • The expo must be quick and deliberate and people have to be able to trust him or her. If there is no trust, efficiencies plummet.
  • The expo must be able to anticipate orders and notify food runners or servers before the food is ready so hot food is hot, cold food is cold, etc.
  • The expo must refuse items if they are not to specifications.
  • The expo is the eyes and ears for the kitchen and voice for the service staff.
  • The expo must be clean, organized and calm under pressure.
  • The expo must know all table numbers, person numbers and server sections.
  • The expo needs to remind servers of their duties.
  • The expo needs to have a proactive personality and be a problem solver.
  • The expo needs to push the team to move faster. A great expo knows when the kitchen can put the pedal to the metal and move faster when necessary.

If you want to take your restaurant to the next level and know that every one of your busy shifts will go off without a hitch, you need to identify FOH people who understand steps of service, know the menu inside and out, are neat freaks with strong organizational skills and are calm under pressure and then train them to YOUR standards. Next thing you know, you’ve got yourself a quarterback who makes both the FOH and BOH look good.

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/rdspos.