Bobby Mullan's Restaurant Survival Guide

Robert MullanA concise, practical guide on how to succeed in the restaurant business. Hands-on best practices for restaurant managers and entrepreneurs.

N i n e G a b l e s P u b l i s h i n g , S a n t a C r u z C a l i f o r n i a

Bobby Mullan’s Restaurant Survival Guide

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Bobby Mullan’s Restaurant Manager’s Survival Guide

Legal Disclaimers, Copyrights, and End User Rights

© Copyright 2014 Robert Mullan and Colin SmithFirst published 2015 by Nine Gables Publishing, Inc.Santa Cruz CaliforniaAll rights reserved

Table of Contents

Introduction....................................................................................................4

Chapter 1 - The Hospitality Business..............................................................5Steps of Service:......................................................................................................6The 2-Minute Rule...................................................................................................8The 5 Hospitality Best Practices..............................................................................9Pre-Shift Meetings..................................................................................................11See your restaurant as your customer does..........................................................12Create fond memories...........................................................................................13

Chapter 2 - General Management Principles................................................14Lead by Example...................................................................................................1580/20 Rule..............................................................................................................18Have a Vision - know what you want to achieve....................................................22Constant review of what’s going on.......................................................................23

Footnotes......................................................................................................24

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Bobby Mullan’s Restaurant Survival Guide

IntroductionA 40-year veteran of the hospitality business, Robert Mullan started work-

ing at Mr Jiffy’s restaurant in Chicago at the age of 17 and hasn’t looked back since. His meteoric rise in the industry has been propelled by his unique ability to focus on profitability and his ability to see the “35,000 foot” view of the hospi-tality business. After Mr. Jiffy’s,he rose quickly from roles in the front room as Master bartender and server at TGIF’s to being responsible for opening a new TGIF concept restaurant in Florida (Dalt’s). This was followed by 18 years work-ing for aLa Carte Entertainment in Chicago as general manager and corporate management trainer for a chain of  22 restaurants and bars including the Snug-gery, Excalibur and Magnums, among others.  Robert then spent time as man-ager for Lone Star Steakhouses and working for RMS Touch Point-Of-Sale Sys-tems before becoming the Director of Operations for the Cubby Bear sports-themed restaurants in Chicago where he worked for 10 years, helping to suc-cessfully expand the franchise to 5 venues.

Currently, Robert resides in California where he works for Ovations Food and Beverage Management Company as Director of Operations for the Mountain Winery in Saratoga, CA, a venue which encompasses a renowned soundstage, vineyard and wine sales, several restaurants and bars and event spaces for cor-porate and private events. He also manages sports-related services for the Oak-land Coliseum, Salt river flats in Scottsdale Arizona,and Santa Clara Fairgrounds among other national stadiums in the US.

This book is a distillation of the best practices that he has developed over the years at these businesses. It is intended as a reference book for both large hospitality chains and smaller restaurants and bars. It is a hands-on practical look at how to be successful in the hospitality business based on lessons learned over the years in the business.

Its focus is on the bottom line. Its purpose is to help businesses avoid the pitfalls that drive many restaurants and bars to an early demise. It is a book that can be taken off the shelf for quick inspiration for the restaurant or bar manager as well as to help in troubleshooting what is going wrong when there are issues in the business, whether they be related to employee management, financials or customer relations.

The book is designed to be easy to read and fun.

Enjoy.

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Bobby Mullan’s Restaurant Survival Guide

Chapter 1 - The Hospitality Business

The restaurant business is part of a broader general category of business - the hospitality business - which encompasses hotels and lodging, nightclubs, resorts and entertainment venues among others. In this book though, we’re focusing on restaurants. In this business, unsurprisingly, the most important key to success is, yup, you guessed it, hospitality.

In a nutshell, if you want to succeed you’ve got to embrace the hospitality paradigm. This means caring about giving good service to your guests and it starts with a hospitable attitude. If you’ve been to a business that doesn’t give good service, you can recognize it

immediately. You feel uncomfortable, not quite welcome and seem to be always trying to get someone’s attention. On the other hand, a hospitable business makes you feel welcome and seems to be always thinking about what you might need next. We’re going to look at what I consider to be the most important factors in bringing the hospitality attitude to your restaurant. We’re going to be examining the following:

Steps of Service – The rules for attending to customers that makes them fell welcome and well served in your establishment.

The 2-Minute Rule – Makes sure your guests aren’t waiting around.

The 5 Hospitality Best Practices – Secrets of top-level customer service companies that you can apply to your restaurant.

Pre-shift meetings – The secret to jump-starting your employees before every shift

Seeing your restaurant as the customer does – Using customer-oriented perspectives to spot trouble areas in your restaurant and to

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“Hospitality: noun friendly and generous reception of guests or strangers.”

maximize the customer experience.

Creating fond memories – This is the secret to building customer loyalty and a great reputation for your business.

Bobby Mullan’s Restaurant Survival Guide

Steps of Service:

I look at the steps of service as the process of making sure the guest is taken care of during their entire visit. They are the details that must be adhered to. It’s very important that staff knows these steps of service and also knows that they are expected to carry

them out consistently for every customer, every day. Here they are:

1) Greet the guest upon arrival within 2 minutes by saying “Hello, welcome to (name of restaurant)”

a) If no seats are available, give an estimated wait time and then show them to the waiting area.

b) Seat the guest. Ask their preference of seating if choices are available.

c) Present them with menus. d) Tell them the name of the server and tell them he or she will

be right with you.2) Server approaches the table within 2 minutes and intro-

duces themselves to the guests. “Hello my name is _______, I’ll be your server this evening.”

a) Server offers beverages and/or appetizers. “Can I get you started with a drink?” Take orders for beverages and say “I’ll be right back with your drinks”

b) Server delivers the drinks and takes appetizer and/or soup or salad orders.

c) Place the order in the kitchen. If there is special timing for the order, communicate it with the order. (e.g. Appetizer before soup)

3) Serve the appetizer or soup or salad. Always ask if there is anything else you can get the guest at that time. (e.g. bev-erage refill, condiments, etc.)

a) Check back within 2 minutes for soup/salad/appetizer accep-tance. Say “Hi, is everything OK, is there anything else I can get you?”

4) Take the main course order. Come back to the table about 5 minutes later and ask if you can take the main course order at that point.

a) Submit the order to the kitchen.b) Remove any plates and check to see if any silverware needs

replacing. If so, replace it.

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“The steps of service are the foundation of a good customer experience”

5) Serve the main course. Ask if there’s anything else you can get them while you’re there (drinks, condiments, etc, etc.)

a) Check back within 2 minutes (2-minute rule) for main course acceptance. Check on drink refills.

6) Take Dessert order. When main course is finished, remove plates and offer dessert and/or after dinner drink.

a) Take dessert and/or after-dinner drink order and place it with kitchen or bar.

7) Serve dessert and or drinks.a) Check back after 2 minutes to be sure they’re happy with it.8) Present the Check. Check back and ask if there’s anything

else you can get them. Remove any plates, silverware, or glassware if possible, and present the check. Tell the guests that you will take their payment.

9) Collect payment within 2 minutes. It is important to collect payment on a timely basis.

10) Thank the guests and invite them to return.

If you do these basic steps every time then your guests will be well taken care of.

A good way to ensure that the staff follows the steps of service is to put them in abbreviated form right in the order book. Here’s an example of how to do that:

You can print the steps of service right on the back of the order book for easy reference by the servers. It also helps to post them on the wall in the servers’ area out of view of customers.

In my experience it is always good to reinforce the message of the expectations regarding the steps of service with your staff. Remember that this is a high turnover business and you may have servers who are not yet fully trained or who are filling in on a part-time basis. Having the

Steps of Service

Greet guest within 2 mins- Introduce yourself stating your name

Describe today’s specials Take drink order - upsell if possible

- Place order with bar Take appetizer order Serve appetizer Check back within 2 minutes for guest acceptance Check for drink refills Take entree order, upsell if possible Place order with kitchen Serve soup or salad Check back in 2 minutes Before serving entree, clear table Serve from left, remove form right Check back within 2 minutes

- remove any glassware or plates Take order for dessert and/or after dinner drink Present check Collect check as soon as guest offers payment

- Check on it within at most 2 minutes A important item to remember is that people usually

like their table clear, so every time you approach the table remove any used silverware, plates, glasses, or condiments.

steps of service in black and white on the order book where they can be easily read will help keep everyone mindful of them. Remind servers that this is a win-win for everyone: the customer is happy, the tips are better and the restaurant maintains its good reputation.

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The 2-Minute Rule

Pay attention to what I call The 2-minute rule. You’ll notice that right in the steps of service there are points where the server must check with the guests after 2 minutes. Nothing pleases guests more than attentive service. Make it a rule in

your establishment to stick to the 2-minute rule which says that you must not keep guests waiting for more than 2 minutes at the crucial stages of the steps of service. They are:

When the customer first arrives at the door greet them as soon as possible. 2 minutes at most.

Whenever food or drink is delivered. Always check back within 2 minutes to be sure the guest is happy with what they have received. If there is an incorrect item, a condiment is needed or a dish is at the wrong temperature, then you do not the customer to be waiting a long time while others at the table are already eating their meals!

When you’ve delivered the check, make sure to return within 2 minutes to accept the payment. My pet peeve in a restaurant is when I’m ready to pay and leave and the waitperson seems to have just forgotten about me and I have to try to get their attention just to get my check paid. If the customer has not yet prepared the payment then you need not say or do anything.

“The 2-minute rule”Guests must never wait more than 2 minutes at crucial steps of service.

The 5 Hospitality Best Practices

When Steve Jobs was setting up the Apple Stores, he looked for guest relationship best practices in the hospitality industry to bring to the Apple Stores. He hit upon the following best practices from the 5-star hotel industry1. I think these apply pretty well to restaurants too. Here they are:

Remember, we’re trying to set a tone in the restaurant that is a sort of philosophy that everyone follows. It’s common to any business that deals face-to-face with

customers. Think of the experience in an Apple Store and how you feel as a customer. (If you haven’t experienced it, please try it.) Let’s go through the best practices one by one and see how they work to make the customer experience a great one.

Approach your guests with a warm welcome. Remember that the first interaction with your guests sets the tone for their whole experience. Whether you have a host or maitre d’ or it’s the wait staff that will be the initial point of contact, they need to be friendly, smiling and welcoming. Remember the 2-minute rule as well. They should not be left wondering if they’re going to be served.

Anticipate unexpressed needs. This is a bit of an art, but if you can do it, it will go a long way towards building solid long-term customers. For example, sometimes at the Cubby Bear in Chicago I would see a customer who still had their coat on at their table. I’d take a look to see if there was a door open or if the thermostat was set too low and adjust it. If guests were coming in for a business lunch, then we’d seat them in a quieter area of the restaurant so they wouldn’t be disturbed by too much noise.

Here’s how the Ritz-Carlton’s Diana Oreck, vice president in charge of the Ritz-Carlton Leadership Center describes anticipating unexpressed needs.2

“The 5 Hospitality Best Practices”1. Approach your guests with a warm welcome.2. Anticipate unexpressed needs3. End with a fond farewell 4. Own the relationship5. Reset the internal clock

[“The secret to Ritz-Carlton’s customer service mojo” Customer Service Investigator. http://csi.softwareadvice.com/the-secret-to-ritz-carltons-customer-service-mojo-1101012/ ]

Q. One of the Ritz-Carlton gold standards is "anticipate unexpressed needs." Why is this important to customer service and how do you train employees to recognize and act on these unexpressed needs?A. It’s very important because legendary service is about surprise and delight. It’s not robotic; it’s not scripted. And the way we teach it is through a class called “Radar On – Antenna Up.” We actually provide our team scenarios. One might be about a young couple that comes into the restaurant with a two-year-old baby. What should you do? You bring a high chair, you bring crayons, you bring our stuffed lion, Roarie. We do this because we know that it’s going to be through the unique, memorable and personable experiences that our customers are going to be fully delighted and engaged.

End with a fond farewell.  The customer must leave with a warm feeling about your restaurant. There needs to be as much warmth and caring about the departure of your guests as there is about welcoming them into your establishment. A fond farewell begins with timely delivery of the check and letting the customer know that there is no hurry to pay the bill. However, once they have presented their credit card or other forms of payment, then please pay attention to getting the payment processed quickly. Use the 2-Minute Rule.

Own the relationship.   I think this might be one of the most important best practices that you can instill in your restaurant. To the Ritz-Carlton it means that any time that a guest approaches an employee with a question or a problem, that employee “owns” the relationship with that guest until the question or problem is resolved. In a restaurant it might go something like this: A customer asks the server if a menu item has gluten in it, or what kind of spices might be in it, instead of saying I am not sure they might go ask the Chef to visit the table to provide a expert’s explanation of what is in the menu item. Also, if a guest asks for a substitution of a simple item like rice for potatoes or an alternative vegetable, servers should be

empowered to make those decisions, within reason, without having to go consult the kitchen.

Reset the internal clock.  This is about altering the customer’s perception of a long wait time. If it’s taking a long time for food to come out of the kitchen, then you can “reset” the clock for the customer by bringing them a free appetizer (often referred to as an amuse bouche in higher-end restaurants) or drink. At a minimum you should tell the customer how much longer of a wait they can expect. This is always better than doing nothing. It let’s the customer know they haven’t been forgotten and that you are concerned about the wait time. Sometimes, that’s all that’s needed to reset the clock. When there are children or elderly members of the party you should pay special care to make sure they are taken care of

Seeing your restaurant as your customer does.

I try to sit in every seat in the restaurant so I can see what the customer sees. Some tables might have a draft from the air conditioning or a view of an unsightly cleaning closet or just be somewhat

claustrophobic because they’re in an isolated corner. By sitting at the tables these things can be noticed and rectified. I also like to be served by the wait staff just like I was a regular customer to see what their experience is, both in terms of the service and the food.

I remember one of my old bosses, Freddy Hoffman from The Snuggery in Mt. Prospect, Illinois. He ordered a hamburger just like a regular customer and when it came to the table the lettuce and tomato beside the burger were wilted from being under the heat lamp and the burger itself was lukewarm. He walked back into the kitchen and flung the plate back through the serving window. He said, “What the fuck? Get your heads out of your asses and pay attention to details! Hot food should be hot and cold food should be cold. Every time.” It was, after that. But had he not done that, the customers would have continued to be served wilted sides and cold burgers - not the way to succeed in the restaurant business. I now remind my kitchen staff, “Hot food hot, cold food cold”. I tell them the story about Freddy Hoffman. They generally get it right.

“I try to sit in every seat in the restaurant so I can see what the customer sees.”

Creating fond memories

You want to create an environment where people want to celebrate events in their lives. Promotions, birthdays, mother’s day, valentine’s day. TGIF wrote a birthday song, people would come just to hear that song. But not just that, the meal

experience itself should be memorable, even if only in small ways. People remember that your restaurant was hospitable and want to return to celebrate. Use it as a barometer of your success. If your customers want to return to your restaurant to celebrate special occasions then you’re doing something right.

“You want to create an environment where people want to celebrate events in their lives. Promotions, birthdays, mother’s day, valentine’s day.”

Chapter 2 - General Management Principles

Good management is the key to running your restaurant. Management sets the tone of the business and creates the atmosphere in which the guests and the staff operate. The buck stops with management. Nothing is more important to your success. You can have wonderful food and a great location, but if your business is not well managed you’ll go down in flames. This section lays out some management best practices to keep in mind every day in your business.

Be ethicalLead by exampleUse the 80/20 ruleShare your visionKeep your finger on the pulse

Be Ethical

I can’t overemphasize the importance of sticking to ethical practices in business. This is what will create and cement your reputation. Good business ethics creates trust between management and employees and between your business and your customers. It also creates a good working relationship between you

and your suppliers and bankers. Good business ethics is worth real money. There is even an accounting term for it. Goodwill, in accounting terms, is the excess value of a company that is not attributable to its assets or income. It is, essentially, the company’s reputation for service and quality. Violate ethical principles at your peril. Once employees, suppliers or customers feel that you are acting unethically, your business will suffer almost irreparable harm. Especially today in the age of social networking, it won’t take long before the message gets out!

Here are 10 Ethical Principles for Hospitality Managers. They were developed by the Josephson Institute of Ethics. Keep these in mind at all times and bake them into your business.

Honesty . Hospitality managers are honest and truthful. They do not mislead or deceive others by misrepresentations.

Integrity . Hospitality managers demonstrate the courage of their convictions by doing what they know is right even when there is pressure to do otherwise.

Trustworthiness . Hospitality managers are trustworthy and candid in supplying information and in correcting misapprehensions of fact. They do not create justifications for escaping their promises and commitments.

Loyalty . Hospitality managers demonstrate loyalty to their companies in devotion to duty and loyalty to colleagues by friendship in adversity. They avoid conflicts of interest; do not use or disclose

“I can’t overemphasize the

importance of sticking to ethical practices in business. This is what will create and cement

your reputation.”

confidential information; and, should they accept other employment, they respect the proprietary information of their former employer.

Fairness . Hospitality managers are fair and equitable in all dealings; they neither arbitrarily abuse power nor take undue advantage of another’s mistakes or difficulties. They treat all individuals with equality, with tolerance and acceptance of diversity, and with an open mind.

Concern and respect for others. Hospitality managers are concerned, respectful, compassionate, and kind. They are sensitive to the personal concerns of their colleagues and live the Golden Rule. They respect the rights and interests of all those who have a stake in their decisions.

Commitment to excellence. Hospitality managers pursue excellence in performing their duties and are willing to put more into their job than they can get out of it.

Leadership . Hospitality managers are conscious of the responsibility and opportunities of their position of leadership. They realize that the best way to instill ethical principles and ethical awareness in their organizations is by example. They walk their talk!

Reputation and morale. Hospitality managers seek to protect and build the company’s reputation and the morale of its employees by engaging in conduct that builds respect. They also take whatever actions are necessary to correct or prevent inappropriate conduct of others.

Accountability . Hospitality managers are personally accountable for the ethical quality of their decisions, as well as those of their subordinates.

Also crucially important is to have zero tolerance for violation of ethical principles in your business. Your employee manual must make clear that such violations will not be tolerated and it is a good idea to get employees to sign a statement to that effect when they are hired. I have seen acouple of great practices in this area that I would recommend for adoption by

restaurants:

At the Mountain Winery my boss __________ has a policy he calls the “Third Party Rule”. It states that if there is a discussion among employees that is critical of another employee who is not present (“the third party”), then the discussion must stop. It can only be resumed if the third party is present.

At the Cubby Bear we had a policy that bartenders would have a meeting with management where they all pledged publicly to follow strict rules of conduct. That way, they all became responsible to each other and to management to follow the rules.

Lead by Example

The way you present yourself to the guests and employees will set the tone for your business. You need to embody the principles of hospitality and ethics from the previous chapter so your employees will have a role model to emulate.

Leading by example means behaving towards your guests and employees the way you want them to behave before

the guests and each other. Be professional in attitude and appearance. Have a sense of urgency about yourself, and instill it in your employees. Since you deal with a lot of perishable products, this is important. During the course of the day, there are things that must get done now... Just do it... get it done now.

“The way you present

yourself to the guests and employees will set the tone for your business. You need to embody the principles of hospitality and ethics so your employees will have a role

model to emulate.”

80/20 Rule

I have constantly found in running a restaurant that the 80/20 applies to almost all aspects of the business. In brief, the 80/20 (aka the Pareto effect) rule says that 80% of the effects comes from 20% of the causes. In business, it can mean, for example that 80% of your profits come from

20% of your sales, 80% of complaints come from 20% of your customers and so on.In the restaurant business I have observed that 80% of your sales come from 20% of your menu, 80% of sales are generated by 20% of your staff, 80% of profits comes from 20% of your clientele, 80% of your productivity comes from 20% of your activities.

With a POS system, you can go into your sales figures by server. I have observed that, for example, at the Mountain Winery we have 46 servers. Of those, I have 7 top performers who are responsible for sales of over $50,000 each. That’s about 20% of the servers generating 80% of the sales.

Why is this important? Once you have identified these top performers, you can reward them with higher pay, recognition and so on. Also, use them to train other staff, since they have demonstrated that they have what it takes to generate profits for you. Once you have identified these individuals, treat them well so they will stay with you and help your business grow.

For menu items, once you can identify the 20% of menu items that are your most profitable, you can focus on these items to maximize the profitability. For example, see if you can negotiate better prices from purveyors or find different purveyors for the ingredients for those items. You can draw attention to the items by highlighting them on the menu as house specialities or moving them up on the menu so that they are easier for customers to choose. Also, servers can be encouraged to sell those items to guests.You might also consider eliminating some less profitable items unless there is a compelling reason to keep them on the menu such

“The 80/20 (aka the

Pareto effect) rule says that 80% of the effects come

from 20% of the causes.”

as they are choices for customers with special dietary needs such as vegetarians or those on gluten-free diets.

The way I use the 80/20 rule on a day-to-day basis is I ask myself “Is what I’m doing right now part of the 20% of activities that’s helping make 80% of the profit?” If not, is there some way I can either delegate or eliminate this activity so I can concentrate on something more productive? A question you should ask yourself once a day. Am I being Productive or just busy? This will help to keep you on track. Your focus should be on increasing sales, and decreasing costs.Analyzing profit and loss statements and the 80/20 rule

Use the 80/20 rule when looking at your P & L statements. Identify where most of your expenses are and attack them ruthlessly to see if you can reduce them. Apply the rule to each category of expenses. For example, if I saw that my most expensive utility was electricity (which it normally is in most of the restaurants I’ve been involved with) then I’d do an energy audit to see where we could reduce this expense. Can we install cold curtains on walk-in refrigerators, turn off some lights, install occupancy sensors for certain areas or improve efficiency of compressors by cleaning coils or servicing?

If we are generating a lot of profits in one area, is there any way we can increase our activity in that area. For example, if hosting business meetings is profitable, can we get more business clients to meet at our establishment by advertising or getting the word out to business in our area?

We’ll be looking at this more in the financials section wen we discuss analysis of profit and loss staements.

NEED TO EXPAND ON THIS P/L SECTION

WHAT DOES THE FOLLOWING MEAN? CAN YOU GIVE AN EXAMPLE OR TWO – COLIN

Do not fight inertia. Just know at times you will encounter a phenomenon that will make you crazy, like cell phones and employees. My advice: if the

inertia is too strong, find a way to make it work in your favor. WE NEED TO FIGURE OUT HOW TO PRESENT THE FOLLOWING IN THIS CHAPTER. HOW CAN EACH OF THESE BE EXPANDED UPON OR COMBINED?

Mix up your routine occasionally. I call this “MBWAA”, which means manage by wandering around aimlessly. Go into nooks and crannies. You will find some surprises, and you may surprise some of your employees.

If you are going to do a job, your goal everyday should be to leave it better than you found it. If you get to the point where this is impossible, it is time for a change.

Keep your head in the game. Remember that all creation begins with a thought.  So think about good results, seek out good news. Think about what you are thinking about.

I have some thoughts on this: Hard work, perseverance, due diligence, study, will help you to righteousness.

Have a Vision - know what you want to achieve

Spending some time creating a vision for what you ideal business will look like in one year, five years and ten years from now is an exercise that will benefit your business enormously. Begin with the end in mind. What do you want to accomplish? Is your business going to be the best

neighborhood sandwich shop or is it a high-end steak and seafood dinner destination? What level of sales do you want to achieve?  How much profit do you want? What kind of growth do you want to achieve? What kind of customer reaction would you like to create? What would you like your customers to say about your business? The more you can envision what the end result will look like, and get it down on paper, the more likely you are to be successful.  

As a restaurant manager or owner, you are the guardian of your vision. By keeping the end goal in mind at all times you can make the necessary course corrections to keep the goal on track. However, to achieve success you must also communicate and share the vision with your team. The restaurant business is a people-oriented business. You rely on your employees and customers to make the vision a reality. Share the vision with them. Make sure everyone who works in your business knows the ultimate goals of the business. Keep telling them about it; put up posters; create a mission statement; create an atmosphere that reflects the vision.

“Begin with the end in mind. What do you want to accomplish?”

Constant review of what’s going on

You need to constantly be reviewing your business and be aware of what’s going on. You need to have systems in place to monitor your business on a

regular basis. The most important is a good POS system. Today’s technology can give you up-to-the-minute information on how your business is doing. It should be considered an integral cost of your operation to have the best possible POS system you can afford. We’ll go into the

details of the POS system in a later chapter.The one crucial piece of information that you as a manager must

always have at your fingertips is: You must know your breakeven point. In most businesses it is good enough to look at this number on a quarterly or maybe even a montly basis, but in the restaurant business I think it is very important to analyze the breakeven on at least a weekly basis. You could even do it on a daily basis, though in some restaurants, the weekends are the busiest time and the numbers for the weekend will have more weight than the weekdays. This might not be true if your establishment caters to a lunchtime or breakfast crowd. It is extremely important to know how much revenue you must generate on a weekly basis to meet your expenses. It is worth reviewing this briefly here:

Breakeven Analysis

Your breakeven revenue on a daily basis is:

Breakeven revenue = Fixed Expenses + Variable Expenses

Fixed Expenses

Examples of fixed expenses are:

Fixed Expenses

“You must have your head in your business, have your finger on the pulse of your business”

Rent Insurance Utilities Professional Fees (Accountant, Lawyer) Property Taxes Equipment leases Loan payments Operating Permit fees Maintenance Etc.

Variable Expenses

Food and BeverageWages and employment taxes

Therefore, for example, if you know that your fixed expenses are say $30,000 for the month, and you are open every day, then you must average at least $1000 a day to meet your fixed expenses.

From there you can start to get an idea of what your sales must be to cover your costs. Start with your labor costs. Let us assume that you have 2 salaried employees at $800/day for both and 8 hourly employees at $400/day for all 8. That’s an additional $1200/day meaning you must generate at least $2200/day to cover fixed and variable expenses and break even.

Now we can start to analyze how to structure the menu and what prices we need to charge for the menu items. We’ll go into menu engineering in more detail in a later chapter. For now we’ll keep it simple and cost out our menu at 30%. This means that the average cost of each menu item is 30% of the menu price. In other words, we make 70 cents gross profit on each dollar earned for a menu item. Of course, we will be spending money on buying food and beverage and these are also variable expenses, but we will be rolling these costs into the total price of the item on the menu as the 30% of the price that goes into buying the ingredients for the menu items.

This means that to cover our fixed and variable expenses of $2200,

we need to generate $3142 in sales each day ($2200 (Expenses) / 0.7 (70% menu profit factor)). It is crucially important that you know this number and be able to identify whether or not you have got to this breakeven number each day.

The most important message to this subject is you must have your head in your business, have your finger on the pulse of your business,   

MOVE TO OPERATIONS CHAPTER – COLIN

******* If you are in negotiating and your intuition tells you this is a bad deal, trust your intuition, get up and walk, no run, away. I have learned your UNconscious is much smarter than your conscious Mind.

Lighting - Fred Hoffman, owner of Ala Carte Entertainment- lights, music, atmosphere - no neon, lighting at comfortable level - yellow light in evening with enough light to read the menu. As evening goes on bring up volume, dim lightning.

Best Practice:  Plan for the unexpected. In this business environment, equipment will break down. Have a good preventive maintenance program established, and keep your environment clean and organized. [Maintenance software]

That being said I have, in restaurants I have managed, set up a bi-weekly shoppers service, to review the quality of service, food, beverage, atmosphere, and general condition of our facilities. The insights have been eye-opening. It is to your advantage to have a network of people who can provide you with feedback on their experiences relating to your business. Additionally you should try to look at your business periodically with a fresh set of eyes, what that may mean is if you are a man, try to solicit a woman's’ insight into your business, I have in the past for instance found out that our restrooms were very outdated, and needed remodeling, just by asking for feedback from some of our women guests. That being said I have always found providing comment cards a valuable tool for constructive feedback. On the comment card, you can provide an e-mail address, if they would feel more confident that their message made it to a person who would be empowered to respond. Now you can additionally get feedback from the website, “Yelp”. You would be well advised to periodically read the post’s regarding your business on that site. I feel that

people can be forgiving, if you respond to their input.

**************

Know the difference between principles and methods. Proven principles will get you to success faster than methods. Stay true to proven principles.

Balance is important in life. So that being said, use time off wisely. Get your rest, and regenerate your body. Additionally when looking at your career, it may be good advice to limit your social activities with your employees. If you are a customer in your business, be a model customer. If you feel the need to let some steam off, be sure you do it anywhere else, but not at your business.  

For a good idea to come into your mind you must have free mental space for it to occupy. What this means if you are worrying, at times it is wise to empty your mind, set down your issue in your mind, do not worry it will be there when you choose to pick it up again, more importantly, you will probably have a solution to your issue come to your mind.

Always improve, work on your communication within your operation. All successful relationships require good communication.

Chapter 3 – Managing Employees

Chapter 3 - Managing Employees1. Training - it’s not a department, it’s a philosophy2. Pre-shift meetings3. Keep your key employees happy4. People do what you inspect, not what you expect5. Performance reviews6. Management meetings7. Surveillance – an essential tool8. Shoppers Service9. Empower your employees10. Manage by walking around

Training – It’s not a department, it’s a philosophy

Training should be a standard operating procedure, not a department. Your business as a manager is to be always learning about your market and the restaurant business, and you should always be sharing what you’ve learned with your staff.

Always bear in mind that your business IS the people that work with you. Restaurants are people-oriented businesses. Yes, there is a building, kitchen and so on, but the core of the business is the staff. You are only as good as the people you work with. Keep them learning to be better at what they do and your business will be a success. Your job as manager – take every possible opportunity to train your people. Treat every interaction with an employee as a training opportunity. For example,

NEED SOME INPUT HERE

Cultivate your key performers

Remember the 80/20 principle with your employees? We saw in the last chapter that 20% of your employees generate 80% of your profits. When you are recruiting new staff, use these star performers as a resource - people tend to hang out with like-minded people. If you have a star server, it’s likely they have friends with similar skills. Ask them for referrals, and if the referrals are hired, give them a finder’s fee.

Keep your star performers happy. Give them recognition for doing a good job. Praise is very much appreciated by people and, conversely, lack of praise and appreciation by a boss is often a cause of great dissatisfaction. Be sure to give recognition of jobs well done and say thank you to employees who are doing a good job.

Give star performers more responsibility (if they want it) and pay them more. If you have someone who is a real asset to your organization then put them in a position where they can become role models. Give them a management role if possible.

Regarding your employees, you want to ask, periodically, if they are an asset or a liability. Are they adding value, or are they costing you business and/or money. I recommend doing this exercise with your management too.

One exercise I would recommend: Once a quarter have all managers bring a copy of their employee schedule and go down the list and collectively ask if each team member is adding value or taking value away. You will find this a very valuable exercise.

A good way to look at your employees is to keep in mind that all of them have the potential to be star performers. Your job is to help them get there. People thrive on recognition and appreciation. They resent criticism and neglect. The right way to approach employees is to constantly look for what they are doing right and to give them positive feedback immediately when you see it. It keeps them motivated, makes them feel appreciated and valued and, in the end, helps your bottom line.

Use the pre-shift meetings to reinforce positive behavior and to make clear the relationship of the good behavior to the benefit to the employee and the restaurant.

Cook - eye for detail. Prepare food - executive, sous, pastry chefs (prep - salads, desserts etc.)

Have a bonus plan for reaching targets of profitabilityBarback - to schlep stuff - train on how to lift heavy stuff - condition of employment - accept condition of employment.

Top 10 attitudes:

From Ovations - company memo

- Customer first- Golden rule- Listen- Think yes- Be professional- Positive attitude- 24 hour rule - get back within 24 hrs. to any voicemail or email- Everybody sells- Enthusiasm- Do it now. Sense of urgency

Pre-Shift Meetings

Another best practice that I think is very important for restaurants is to have a pre-shift meeting with staff before every shift. It’s sort of like a police roll call before hitting the streets in the morning. It’s a way to get

the staff energized and set the tone for service for the restaurant that shift. Most of all, it is a time when you can re-iterate the message that staff is there to provide hospitality and

reinforce the importance of the steps of service. Think of it as a mini-orientation for everybody. It’s an opportunity to do more training. If you think of training as a philosophy, not a department, then you will be constantly training staff in how you want your business to run. Reinforcing the message every day is a great way to do it. It’s also good for getting new staff up to speed. As a manager, I think of it as a way to both set a good attitude for everybody and a way to identify and head off bad attitudes that people may come to work with. It’s also an opportunity to make sure everybody knows the specials of the day, what particular items they may be able to upsell and if there are any special upcoming events that they might want to let guests know about.

“Pre-Shift Meetings are a time when you can re-iterate the message that staff is there to provide hospitality and reinforce the importance of the steps of service. Think of it as a mini-orientation for the shift.”

Managing by wandering around

You stumble on things that people don’t expect you to. Cubby Bear Lincolnshire - I was just cruising around. Rest was on a 5 acre plot of land - parking lot at back, behind that garbage dumpster. $0.50 cent beer can night (Cheap beer) Thursdays, and ladies night. DJ would come in , food specials etc. I went out to dumpster and saw two cases of beer sitting there. I sat where I could see the dumpster from the balcony. I ended up catching one of bar becks (support guy to supply bar) meeting one of his friends picking up the beer. Fired him on the spot.

Cubby Bear North - cleanup guy, Javier, who was responsible for cleanup - new bar area construction - Javier. I asked him to show me work when done. 4 hrs later - blown away by how clean it was.

Sanitation is very important in this business. Wash your hands often, and encourage the same from your employees....Hello   !!!Keep In mind you can create a thief of an honest employee if you have loose security with money and inventory. Have a security plan and zero tolerance if it is not enforced.If you have a safe in your office, always spin the dial when leaving the office.Your staff must be clean and well groomed, enough said.

When you have found a process that works, or is successful, you want to duplicate this process, as many times as you can.

Create checklists and policies for process that works - e.g. line check of food online. Mgr communication book - for communication between day and might mgrs. e.g. promotion, VIPs coming, regional mgrs might write new procedure in book.Whenever we had gm meetings someone took minutes and documented action items in the minutes and then in next meeting make sure there had been followup.Employee manual handbook - reviewed on annual basis - uniform, hygiene behaviors for termination etc, etc. Document it all - don’t assume that you can communicate it verbally.Bartender affidavit for bartenders - Stating I would never serve anyone underage, intoxi-cated, overpour drink, sign paper. To discipline - you signed this, didn’t do it, now I’m going to write you up for violation and you sign it. 3 times you’re out.

Orientation

When hire in the thick of it, then people don’t get the same orientation as in the beginning of the season - therefore, put the orientation on tape so new employees can see it

People will do what you inspect, not expect

“When you’re done, please come and find me so you can show me your excellent work”

Empower your people. “If someone’s not happy with their drink, don’t come and find me, just give them another drink”

Identify a person’s strengths so you can tailor their job to those strengths

It’s better to bring a mediocre performer up to very good or excellent than to bring inept up to mediocrity.

People will do what you inspect, not expect, so this means when you give someone an as-signment, upon their completion ask them to show you their work. This will prevent you from being disappointed, it will additionally provide an opportunity to correct and or praise ones work.

When managing people your job is to discover the person's strengths, and assign them a job where they can be successful. Encourage their success, and you will be successful too. No one succeeds on their own.

MEETINGS

Lone Star - offsite monthly meetings with all mgrs in room. Competition, problem solving, no interruptions.

In meeting - ask managers to go down the schedule and say for each employee - liability or asset. Gives them a chance to both reinforce praise for good employees and possibly ad-dress issues with an employee that is not in the optimal job.

Stories,

Meetings- The best lesson I learned on meetings was the Lesson I had learned at Lone Star Steakhouse and Saloon. They Had a practice where they would have their Manger meeting at a hotel, the purpose for this was to conduct their meeting in an environment where the participants would not be disturbed. The meeting would generally be 2 days. The first day we would analyze each store's profit and loss statement. The regional manager would put the stores P&L statement up on a projector screen, and we all would analyze the contents, what I had learned was that no 1 person was smarter than the wisdom of the group. This was an extremely effective lesson to learn. Each person in the room added their unique in-sights and experience with p&L issues , I learned so much in this meetings because people would talk about problems they had encountered, and provided how they had solved the is-sue, and most often the discussions would lead to an even better solution to the issue.

MOVED TO MANAGING EMPLOYEES CHAPTER ******* When you train someone, your goal should be that they would become competent enough to replace you, have them raise your boat to higher waters.Reward results based performance. If someone accomplishes good results, reward them, and give them thanks. This small thing is important.Best Practice: Monitor employees to make sure they are doing their job, also, to help keep them honest. Anecdote: timeclock, break. Money

handling, etc.******* THIS BELONGS IN MANAGING EMPLOYEES SECTION – COLIN

Regarding your employees, you want to ask, periodically, if they are an asset or a liability. Are they adding value, or are they costing you business and/or money. I recommend doing this exercise with your management too.

One exercise I would recommend: Once a quarter have all managers bring a copy of their employee schedule and go down the list and collectively ask if each team member is adding value or taking value away. You will find this a very valuable exercise. When in negotiations, just before you end the meeting, and you have tentatively agreed, ask " is that  the best you can do?". Over the course of your career , this small question will pay big dividends.

AccountingStart with the end in mind..What this means know what all your fixed cost,s will be, e.g. utili-ties, rent, real estate taxes, insurance, food, labor, liquor, professional fees,licensing fees, maintenance, etc... then know 30 days of these fixed costs and divide by 30, and this will tell you what your minimum daily sales must be to break even. See your financial statement, commonly called profit and loss statement.

Try to keep bookkeeping and accounting not to complicated.Details are important, but know when they become a waste of your time

Never underestimate the value of your back bar. When deciding on products, have a time limit on how long it should take to sell this product. And pay attention to this.

Customer Relations

Mothers Day

John Dwyer was supervisor (aka JD), mentor.I was working for a la carte entertainment at The Snuggery in Edison Park, Chicago. We ran a radio blitz on a radio station for moms eat free - if you bring in your mom on mothers day then the mom eats free. Needless to say we got slammed. We should have offered limited menu, but we had 40 items. 200 people inside, big patio, it was a nice day 75 tables out-side. Right across street from train station, too. Nice local spot, popular because near train.My supervisor was there - you get front of house, I got back of house. Kitchen was

slammed. There were long waits for food. It went on for 1.5 hours. It got so desperate. I went and got all the gift certificates I could. Went to all tables and gave out gift certs. and told them the truth asked them to understand the situation and not judge us on that day. Gave out 100 gift certificates. Result was that it was a disaster for the day, but a lot of peo-ple came back to eat.

Snuggery mt prospect - upset customer, no toilet paper.

I THINK THE GRIPE O METER NEEDS TO MOVE TO OPERATIONS, RIGHT???? - Colin

Consumer Reports article in August 2014Gripe o Meterthe following are a list of items that people 1003 found annoying in a survey, I think you should be hyper-aware of these items76% Dirty utensils73% Dirty or ill-equipped restrooms72% impolite or condescending servers67% servers with sloppy appearance or poor hygiene66% meal or beverage served at in-correct temperature62% meals are not what you ordered61% feeling rushed to finish or leave by your server59% servers servers removing your plate or beverage before you have finished it.54% food does not look or taste as described on menu51% slow service50% Gratuities of 18% or higher automatically added to your bill (or if you had a buffet auto grat)50% table not ready within 15 minutes of reservation48% inaccurate calculation of your check38% poorly situated table (near door kitchen,cold air vent,etc.)30% diners nearby talking loud or texting on mobile phones24% servers referring to you by pet names such as honey or dear17% server confusion who gets what meal16% so much nutritional information that it is a turnoff to eatingAnd an item not on this list but I am sure you would agree any restaurant who is  using their mobile phone when they should be directing their attention to the guest.

Need Some Blockquote areas for your ebook? Then here is one you can fiddle with and use! It has been set using the “Quotations” style and from there it can be changed.” For the larger quotation mark at the beginning, you will want to adjust the

“Drop Cap” setting.“

Footnotes

1 http://www.forbes.com/sites/carminegallo/2012/04/10/how-the-ritz-carlton-inspired-the-apple-store-video/2 “The secret to Ritz-Carlton’s customer service mojo” Customer Service Investigator. http://csi.softwareadvice.com/the-secret-to-ritz-carltons-customer-service-mojo-1101012/

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