How to Deliver Quality and Service in Your Restaurant
How to Deliver Quality and Service in Your Restaurant
When guests come to your restaurant, you should treat them as if
they are friends visiting your home. Treating your guests with care
and providing an exceptional place for them to enjoy a meal is part
of the reason they will come back to your restaurant again.
Exceptional Quality
When customers come through your doors, they expect quality in
every aspect of the restaurant. Guests are looking for a value in
the things they see, taste and touch, and so providing them with
exceptional quality will certainly leave a good taste in their
mouths.
Food Quality
Food and beverages are probably the biggest indicator of quality
that a customer notices. Food quality is not only important to the
customers' impressions of the overall restaurant experience, but it
is important for the their health, as well. Guests' health should
never be compromised. Although not all restaurants can boast the
best quality food in town, they can still take measures to ensure
that food is stored and prepared safely. Take the following
considerations when assuring food quality in your restaurant:
Be sure to follow proper first-in, first-out (FIFO) rotation
with all food products.
Properly label and date all food products.
Never serve food that has expired.
Prepare products safely, avoiding cross-contamination with
dangerous bacteria or cross-contact with allergens.
Wash hands before and after handling food products.
Prepare and serve foods at proper, safe temperatures.
Quality Atmosphere
When guests enter your restaurant, they should feel as though
they are in a special, comfortable place. Try these suggestions to
create a superior ambience in your restaurant:
Make deliberate choices with lighting. Consider your concept,
and be sure the strength of the light suits the tone you wish to
portray to your guests.
Choose music carefully. Make sure the volume of your music is
audible but not distracting. Music should help create the ambience
rather than overwhelm it.
Decorate appropriately. Decorate your restaurant with a special,
unique theme or focal point.
Keep the restaurant spotless. Even a quick-service restaurant
needs to demonstrate a high standard of cleanliness for customers
to feel good about the quality of food.
Maintain the temperature. Maintain a comfortable inside
temperature in your building. 70F is usually acceptable. Minimize
drafts or hot spots from lights as much as possible.
Memorable Service
Perhaps even more important than food quality is the service the
customers experience from the time they enter the restaurant until
the time they walk out the doors. Although restaurants thrive
because of sales, the sale should never be put before the
customer's needs.
How to Speak with Customers
In any restaurant or food service environment, speaking to
customers should always involve the utmost respect and courtesy.
This goes for all workers, from drive-thru attendants to servers at
fine dining establishments. This is rather idealistic. However,
restaurant workers should follow these general guidelines when
speaking with customers
Use respectful titles, such as "sir" and "ma'am."
Be optimistic, and speak with a smile.
Never interrupt or talk over guests' conversations if you can
help it.
Know your menu so you can speak intelligently to educate
guests.
Listen with respect and care to what the customer has to
say.
Be sure you ask questions to clarify a customer's order if there
is any confusion.
Be honest and straight-forward with customers at all times,
especially if there is a problem.
How to Answer the Phone in a Busy Situation
When answering the telephone in a busy restaurant, never answer
with "Thanks for calling, hold please," as this immediately
belittles the person on the other end.
1. If the phone rings while you are helping another guest,
politely ask the guest to excuse you for a moment, then answer the
phone.
2. After greeting appropriately, let the person on the other
line know you will be able to help them momentarily.
3. Finish helping your current guest and come back to the phone
within the next minute if possible.
How to Serve and Clear Food
Serving etiquette varies depending on the restaurant serving
type. The restaurant types where this matters the most are upscale
or fine dining restaurants. Managers should train their servers in
proper table etiquette if they are unsure of how to proceed in a
serving or clearing situation. The following tips describe the
basics:
Serve in the appropriate order. Service order is usually an
important standard upheld in fine dining restaurants or formal
banquets. In these dining establishments, it is appropriate to
serve the guest of honor first, then the female guests and then the
males. In less formal restaurants, it is acceptable to simply serve
women before men.
Serve and clear food from the left. Servers should serve and
clear food from the diner's left side. Some formal restaurants
advise serving with the left hand for these tasks. Serving from the
left is best since most diners are right-handed. Politely excuse
yourself if you find that you are interrupting or reaching.
Serve and pour beverages from the right. Serve or pour beverages
from the diner's right side since that is usually where the glasses
are set on the table.
Serve the correct order to each guest. When serving food,
servers and food runners should not call out entres to see who at
the table claims the dishes. Servers and food runners should have a
system to identify which plates correspond to which guest without
having to mimic an auction house.
Never rush a party to finish. Good service extends beyond the
meal to the entire length of time the party is inside the
restaurant.
Clear all plates at the same time. Unless otherwise requested,
clear all plates and empty glasses at the same time, and before
presenting the check.
Speed of Service
Speed of service is an important phrase in most quick-service
and fast-casual restaurants. These restaurants capitalize on
convenience and speed. They often have a speed of service goal
built into their policies. See the examples below:
A fast-casual pizza place might have a speed of service goal of
10 minutes from the moment the order is taken to the moment the
guest receives the pizza.
A smoothie shop or coffee house might have a more aggressive
goal of three minutes, since these drinks require less assembly and
preparation.
Speed of service is integral to a positive dining experience no
matter the restaurant service type. A guest will likely form
expectations as to how long they should wait for the food,
depending on the restaurant. The guest will be annoyed if his
two-dollar cheeseburger took ten minutes to serve, but in a fine
dining restaurant, that guest will probably not get upset until he
has waited half an hour or more for his entre. Make it your goal to
accommodate all guests with the same quality food within the same
time frame at all hours of the work day.
Caring for Upset Customers
Now and again there are bound to be problems. A customer may be
dissatisfied with his meal or may find the quality to be below his
standards. Sometimes guests will find the need to vent anger or
annoyance before the problem can be resolved. Be sure to train
servers the proper ways to handle customer complaints. Retaining
upset customers can be a challenge. When you put in the effort and
respect to recover distressed customers, you may be able to
convince them to return to your establishment in the future. Learn
MoreCustomer Comment Cards
Customer comment cards are a great way of evaluating the
customer experience. Customer comment cards are typically set out
on the table or delivered by the server at the end of the meal.
Customers can rate qualities of the restaurant, such as food
presentation, menu pricing and server friendliness. Learn
MoreCaring for Upset Customers in the Restaurant
Even if all food service personnel do their best to please the
customers that come through their doors, not every customer will
find satisfaction with the service offered. Guests usually have
their reasons for complaining, but it is up to the restaurant staff
to rectify the problem and make a positive lasting impression.
Why Customers Complain
Occasionally, customers will find something that offends their
taste and bring it up with the server or manager. This is typically
due to one of the following:
Slow service, Rude servers,,Inattentive servers,Incorrect
orders, Dirty dishes,Dirty facility
Poor quality food and drinks
1. Listen and Acknowledge
When a customer has a problem, they tend to bring it up with the
server, or an employee working in the Front of the House (FOH)
first. It is this employees job to listen attentively. He or she
must find out, as politely and compassionately as possible, what
seems to be the problem. This employee should take the time to hear
out the issue completely before determining what can be done.
Sometimes the customer just wants to be heard, and having an
employee acknowledge the issue is all it takes to settle the
problem. In other cases, however, it is helpful for a manager to
get involved.
2. Apologize
The next step is for both the server and the manager to step in
and apologize. Even if the offense was not intentionaland it hardly
ever isthe apology will set the guests mind at ease and help to
dissipate the negativity.
3. Rectify the Problem
From here, the server or manager must do what he or she can to
fix the problem. The goal is to go above and beyond the expectation
so that the guests distaste is transformed into contentment. This
can take many forms, depending on the complaint.
The meal is remade and comped
The meal is replaced and comped
The guest is given a dessert on the house
A new server is assigned, if needed
A coupon for a free meal is given to the guest
It always helps to compensate, or comp the food in question.
However, this is no substitute for top-notch customer service. Even
if a meal is compensated for a guest or a free meal coupon is
given, it takes sustained attentiveness, politeness and positivity
to recover the customers trust.
4. Thank the Guest
Finally, it is important to thank the guest for giving you the
opportunity to repair the problem. Training your servers to always
thank the customers simply for coming in will do wonders.
5. Correct the Situation
After all is mended, the manager should take the time to debrief
the team tactfully, so as not to place blame. Communicating the
circumstances helps to assess the situation, preventing the same
thing from happening in the future
How to Develop a Restaurant Employee Handbook
The employee handbook, or employee manual, is one of the most
important documents your restaurant will produce. It is one of the
most effective ways of training your employees to do things
correctly. The handbook establishes the policies, procedures and
other components that ought to be present in any business. This
article provides guidelines for creating an employee handbook for
the first time, or assessing and updating your old one. No matter
how you make it, always consult with an employment lawyer or
restaurant human resource professional before finalizing and
publishing your handbook.
Components of an Employee Handbook:
Disclaimer and Acknowledgement Employment Policies Work Hours
and Payroll Benefits Appearance Standards Behavior Expectations and
Policies Cash Handling Policies and Procedures Operating Policies
Harassment Policy Drug and Alcohol Policy Health and Safety
Emergency Procedures Company Property and EquipmentWhy Your
Restaurant Needs an Employee HandbookThere are several reasons why
creating an employee manual is critical to your restaurant's
success. This document is home to your specific restaurant
policies, local and federal laws, employment standards and working
procedures for all areas of the restaurant. Check below for
specific ways the employee manual will make your life easier.
Enhance professionalism.The employee handbook shows your staff
that you are serious about your restaurant, and more importantly,
their performance. You have taken time to create it and your staff
needs to take serious time to read and understand it.
Answer employee questions before they ask.Many employees want to
know what they need to do and how to do it. A good employee
handbook will cover this, so you will spend less time answering the
same questions over and over.
Improve employee confidence.Restaurant employees do better work
when they are confident of their job requirements and the specific
procedures. This translates to better customer service as well.
Elevate level of consistency.When you have the policies written
out, you can consistently train every employee. Conversely, if you
need to take disciplinary action with someone, the employee
handbook gives you written documentation of procedures in case of
any messy legal action.
Writing the Employee HandbookHere are a few tips for writing the
employee handbook that will make it as useful as possible for your
restaurant staff:
Write multilingual handbooks.If necessary, make up employee
handbooks in different languages to accommodate any non-native
English speakers on your restaurant staff.
Write so employees can understand.No need to write the employee
handbook in unfamiliar jargon or legal terms. Write simply and
clearly so any of your employees can understand it. After all, they
are your main audience.
Produce specialized handbooks.Depending on your restaurant, you
may find that handbooks for every type of employee make the most
sense. In full service establishments, job descriptions can be very
different and may require separate policies and procedures. Limited
or quick service restaurants often function just fine with one
universal employee handbook.
Add information as needed.New situations come up, and you may
need to make additions to your handbook in order to cover
procedures that you feel are important enough to be in the
handbook. To avoid publishing new handbooks every time this
happens, print off the new procedures and hand out copies with the
next round of employee paychecks.
Essential Components of an Employee HandbookAll employee
handbooks will look slightly different due to variances in concept,
layout, service type, location, hours and specific policies
enforced by the owner or manager. Despite differences in content,
the following components are important in any restaurant employee
handbook.
1. Disclaimer and AcknowledgementThe disclaimer and
acknowledgement section of your restaurant's employee handbook
establishes that employees have read and understand the policies,
procedures, expectations and benefits outlined in the handbook. It
also asserts that the handbook does not act as an employment
contract. This is especially important for states with "at-will"
employment laws, which are laws delineating that an employment
relationship can be terminated at any time, by the employer or
employee, without cause or liability.
2. Employment PoliciesA section on hiring policies helps outline
any state laws that apply to interviewing, hiring and otherwise
bringing people to work in the restaurant. An employee handbook
needs to cover any applicable state or federal employment law,
including the commitment to Equal Opportunity Employment. Handbooks
may also include information on the following:
Recruiting
Interviewing
Applications
Background checking
Finding the right people Learn MoreTerminationInclude policies
on dismissing employees from the restaurant. Be sure to cover both
voluntary and involuntary termination and what behaviors will lead
directly to termination. Learn More3. Work Hours and PayrollIn this
section, discuss any labor laws that were not covered in the
previous section, and to outline the expectations and procedures
for employees while on the job. Include the following concepts,
tailored to your restaurant:
Labor laws.Labor laws differ from state to state. Include
information about age requirements, work permits, overtime pay
procedures or information about what work employees can safely
perform while on the job. Learn MorePayroll.Employees will want to
know when and how they will be paid. Let employees know when
paydays occur, how they will receive their wages and if direct
deposit is available. Learn MoreScheduling.Discuss how the schedule
will be created and how often. Include procedures for asking for
time off, missing a shift and otherwise changing the schedule. You
may want to cover what happens when an employee misses a shift
without notice. This information will often require extra
enforcement and communication in person. Learn MoreBreaks.Most
state labor laws also include directives for employee breaks and
meal periods. Employees must be aware of their rights according to
area labor laws. They should also be aware of how to clock out for
a break, where they can spend the break and how many breaks they
are allowed in a given shift. Learn MoreTip reporting.This applies
mainly to servers. Make sure the tip-reporting policy in your
restaurant is clearly communicated and enforced. Include
instructions on how to fill out a tip reporting sheet and potential
consequences for inaccurate reporting. Learn MoreWorkers'
compensation.This section should have information on employee
injuries or illness as a result of working at the restaurant. Make
employees aware of their rights and educate them about how to stay
safe on the job.
4. BenefitsEmployees want to know what benefits they are
entitled to while employed at your restaurant. Make sure they are
aware of any of the following benefits your restaurant offers:
Employee meals.Employee meals are a common benefit in many
restaurants, in which restaurant employees receive one free meal
for each shift worked. Learn MoreTime off.Businesses are typically
required to provide time off to their employees when they are sick
and during holidays. Restaurants, however, may employ unique
policies regarding time off. Be sure to clarify your restaurant's
policies, including the following circumstances if applicable:
Holidays
Sick Days
Vacation Time
Overtime
Bereavement
Maternity Leave
Jury Duty
Insurance and 401K.Although a less common benefit, some
restaurant managers and workers are eligible to receive medical,
dental and vision insurance as well as 401K packages. Learn More5.
Appearance StandardsBe sure to identify the proper uniform and
appearance standards for every job position in your restaurant.
This includes the following:
Shoes
Uniforms
Hair
Facial hair
Nails
Jewelry
Tattoos
Piercings
Uniform requirements will differ in just about every
establishment, so make it clear what your specific standards are,
including the following aspects of employee appearance: Learn
More6. Behavior Expectations and PoliciesIt is essential that a
restaurant handbook define acceptable and inappropriate behaviors
in the restaurant. When employees know their expectations and their
limits, there will be fewer problems in the workplace. Learn
MoreTeamwork.Emphasize teamwork in your employee handbook. Make
sure that you foster an environment of trust and cooperation as
much as possible.
Customer service.Depending on your restaurant layout and service
style, you may have several different employees interacting with
customers for every order. Make certain that all employees are
aware of your restaurant's customer service goals and how to
exemplify them.
Evaluations.Let employees know that their performance will be
periodically evaluated. These evaluations can even lead to
increases in wages, if your restaurant is in a position to offer
this.
Rewards and discipline.Establishing a rewards policy and a
discipline system in the restaurant will help employees understand
the consequences of their behavior, whether good or bad. Identify
unacceptable behaviors, as well as those that result in immediate
termination, such as harassment. In addition, clarify those
behaviors that will make the employees stand out as leaders. Learn
MoreConflict resolution.When employees show their superiors or
their coworkers disrespect, the whole atmosphere of the workplace
can turn sour. Have behavior standards and resolution practices in
place for conflicts that do arise. Learn More7. Cash Handling
Policies and ProceduresMany restaurant employees will be handling
cash while at work, either as a server, bartender or cashier.
Having cash handling policies in place will help instruct employees
on the proper way to handle money to minimize loss and maximize
security and accuracy. Learn More8. Operating ProceduresThis
section of the employee handbook includes any operational
procedures that you feel are necessary to communicate to your
employees. This can include opening and closing procedures, proper
ways of operating equipment or supplies, special safety procedures
and service guidelines. Generally, the more details you provide in
this section, the better.
9. Harassment PolicyHave a stringent policy on workplace
harassment. Provide information about sexual harassment and other
forms of workplace harassment, as well as instruction for how to
avoid it, how to identify it and how to report it. You may even
want to include a statement of acknowledgement for every employee
to sign, stating that they have read and understand the
no-harassment policy. These can be kept in employee files. Learn
More10. Drug and Alcohol PolicyDrug and alcohol abuse can occur in
any restaurant. Not only is it harmful to the employee, but it can
be dangerous to those around him or her. Be sure your policies are
clearly defined. This especially applies to restaurants that serve
alcohol and allow employees to drink after their shifts have
ended.
11. Health and SafetyKeeping your restaurant staff safe on the
job should your highest priority. Be sure to provide consistent,
thorough training to all employees through regular staff safety
meetings and on-the-job coaching. Have proper labels and posters in
place to remind employees of hazardous chemicals or potentially
dangerous procedures. Also check out the Health and Safety Section
of the FoodServiceWarehouse.com Education Center for more
information.
12. Emergency ProceduresIn the event of an extreme weather
emergency, power outage or burglary, your restaurant staff needs to
be prepared with the proper precautions and procedures. Educate
your staff about the importance of awareness and security when it
comes to crisis situations. Learn More13. Company Property and
EquipmentSome restaurant employees have access to computers,
vehicles or other equipment belonging to the restaurant. Make sure
employees are aware that they need to respect restaurant property
of all types.
Fundamental Up selling Strategies for the Restaurant
Up selling is essentially a practice of embellished suggestions
aimed at getting the guest to spend more money. It is a valuable
marketing strategy in any restaurant, but it must be trained and
practiced in order to be effective as a sales technique. Restaurant
servers, cashiers and kitchen staff who have contact with the
customer should know appropriate and effective ways to up sell menu
items. These useful methods for up selling in the restaurant will
help increase sales and tip money.
How to up sellUp selling is the art of enticing customers to buy
something extra without them knowing you are selling something.
Offer Multiple Suggestions
Workers can up sell whether they work in a quick-service
restaurant or a swanky lounge. Here are two prime examples:
At Wendy's, the worker at the cash register will usually ask the
customer if he would like to "Biggie size" his order. This means
getting a bigger drink and bigger order of fries for a few extra
cents. The customer often feels as though he is getting more bang
for his buck, even though he probably did not want the bigger size
to begin with.
A guest asks the bartender for a vodka martini. Rather than
simply taking the order, the bartender asks, "Which type of vodka
would you prefer? We offer Grey Goose and Sky vodka." The bartender
brings up two of the most expensive varieties of vodka in order to
up sell to the guest, or get him to pay more for his martini.
Use Embellished Descriptions
Servers and restaurant workers can up sell by describing the
ingredients, cooking process or presentation of a dish as a means
to entice customers and convince them to buy. Often, servers will
not actually ask a question but simply launch into descriptions to
whet their guests' subconscious appetites. Make the items sound
exciting by trying the following methods:
Suggest an appetizer by explaining the ingredients and
preparation with vidid language. For instance, say "You will find
our appetizers especially intriguing, including the broiled
goat-cheese quesadillas which are sprinkled with pepper and thyme
and served piping hot."
If a diner is already sure of what he wants, ask him if we would
consider any sides to go with his meal. To a diner ordering chips
and salsa, a server might say, "A side of our fabulous guacamole
would complement your chips and salsa, since it is prepared with
fresh avocados and tomatoes, as well as our signature spices."
Describing the side as a smart attachment to the meal is a great
way to make the meal seem incomplete without the extra
purchase.
Five Keys for Up selling Dessert Items
Wine Pairing
Wine can provide an excellent complement to a meal. Hence, wine
pairing is a great way to up sell to your customers. However,
satisfying the customer's palate with a well-paired wine requires
training, experience and extensive knowledge of both the food and
wine menus. Taking the time to learn about food and wine pairings
can improve the customers dining experience and make even more
sales for the restaurant.
Desserts in particular are lucrative but challenging items to up
sell. The guest is often satisfied from the main entre and may not
ask for dessert directly. Listed below are five popular strategies
for up selling desserts:
1. Present dessert menus after lunch or dinner. Bring out
dessert menus for each diner after clearing dinner plates. Seeing
the descriptions and ordering from a menu may make the guests feel
more in control of their choices.
2. Use vivid descriptions. Describe a few of the dessert
specials using vivid imagery to appeal to the guests.
3. Bring out the dessert tray. Utilize a dessert tray to show
guests how tasty the desserts look.
4. Offer low-calorie options. Do not forget to offer low calorie
dessert options, which may sway diners who are trying to watch
their figures. Also suggest coffee or tea.
5. Show off your desserts. When someone does order a dessert
item, be sure servers or runners carry it at table level. This way,
other diners can see and smell the dessert and may be convinced to
order one of their own.
How to Integrate Up selling Strategies into Training
Sessions
Up selling does not always come naturally. Make up selling part
of the training regimen by offering tips and suggestions to
restaurant workers and servers at the start of every shift, as well
as during initial training sessions. Managers and lead servers can
help their staff learn to up sell by following these
suggestions:
Allow servers to taste menu items. Provide opportunities for
servers to taste menu items, including daily specials.
Train in menu knowledge. Make menu knowledge a priority, so
servers can speak intelligently about the preparation and quality
of food.
Suggest vivid descriptions. Offer ideas for how to use colorful
language when describing dishes. For example, avoid simply offering
"a slice of chocolate pie" and instead up sell "an exquisite slice
of delicate chocolate mousse pie with a drizzle of caramel." The
second description makes a big difference.
Role-play with servers. Role-play with servers to demonstrate
how to ask questions or offer more items
Provide rewards. Hold contests and offer incentives for servers
who sell the most dessert or daily special, giving food or gift
cards as prizes.
Breaking the Language Barrier: Training and Managing a
Multilingual Restaurant Staff
Approximately one third of workers in the quick service
restaurant industry are non-native English speakers.1 With an
increasing population of multilingual food service workers, the
importance of communication and management styles geared toward
non-native speakers is paramount to a smooth operation. Consider
these guidelines to create a culture of acceptance and make the
most of your non-native speakers skills and talents.
Tools for Employees
When working with non-native English speakers, or even those who
barely speak English at all, it helps to have materials translated
into the appropriate languages so these employees can learn the job
as well as a native English speaker.
Multilingual training materials. Bilingual or multilingual tools
like booklets, quick-reference cards, employee manuals and menus
are helpful when training someone new.
Multilingual POS system. Many operators overlook simple business
components like the Point of Sale (POS) system. Instructions for
clocking in and clocking out should be in English, Spanish and any
other language frequently spoken in the restaurant.
Audio or video tapes for employees. Some restaurant chains will
provide audio or video tapes to employees to help bridge the
language gap.2 The tapes include important words and phrases to
help non-native speakers with typical English restaurant
terminology.
ESL classes. On occasion, a restaurant or company will offer
education as part of the benefit package. This allows employees the
means to study English as a second language on a deeper level,
improving confidence and skills in the restaurant or any other
workplace.
Visual tools. These can include posters that outline the proper
step-by-step procedures for cleaning an area or color-coded
bilingual labels to identify chemicals.
Tips for Management
Although non-native English speakers and other bilingual
employees often need extra training, some real benefit comes from
managers who take the time and make the effort to incorporate an
understanding of other languages and cultures into the
workplace.
Training materials. Many chain restaurants or large companies
offer training classes for managers to learn enough of a language
to communicate with their non-English speaking employees. Even a
few functional words help communication as a whole, especially
between kitchen managers and kitchen workers in a busy
restaurant.
Learning the culture. Managers who learn about their employees
cultures as well as their languages will often be better able to
accommodate any differences in communication styles. For example,
some communication difference that vary by culture may include:
Volume of speaking voice
How close one stands to another while holding a conversation
If people look directly at one another while
speaking3Opportunities for advancement. Improvement in English can
be perceived as excelling in the job itself, and any significant
improvement in the workplace should be rewarded with a promotion
both in job responsibility and pay rate.
Appreciate diversity in the workplace.Bilingual and multilingual
skills are often an important addition to the workplace. Many
people go out to eat, and it helps when you can provide exceptional
service to all of your guests, especially non-native English
speakers in the area. Some restaurants look specifically for
qualified job candidates who are able to speak a language other
than English to help drive business in a multi-cultural area.
Diversity Efforts
Although linguistic and cultural differences can form a barrier,
diversity can enhance the workplace environment in many ways. In
2002, Nation's Restaurant News and the Multicultural Foodservice
& Hospitality Alliance jointly delivered a Diversity Study. Of
about 150 responses from companies within the food service
industry, almost 40 percent responded that they have programs in
place to hire and retain qualified non-native English speaking
workers.4 These programs include the following:
Management succession plans
English language classes
Support networks
Initiatives like these help promote diversity. They capitalize
on the skills and talents of people who often fall under the radar
because of a language barrier. On the whole, diversity can be a
positive concept for a restaurant. Diversity in the workplace shows
and encourages cultural acceptance both for employees and
guests.
Basic Restaurant Accounting
The key to any successful business is simple: profits.
Restaurant businesses need to make money to survive, and in order
to make money, restaurant owners, operators and managers need to
know basic restaurant accounting systems to control cash flow,
reduce losses and maximize their profits. Keeping track of your
finances will put you in a good place to monitor your cash flow and
make the most of your business in the long run.
Cash Flow Management
Managing cash flow means tracking all the cash that is coming in
and leaving your restaurant. With sales and expenses always playing
a balancing act, estimating future cash flow can be a guessing game
until you get the feel for your restaurant's business patterns, or
when the money comes in versus when it goes out. Essentially,
restaurants strive for more income than expenses. When a restaurant
is able to bring in more money than it spends, it maximizes its net
income, and the overall profits grow. Learn MoreKeeping Record
Recording your cash flow, including income and expenses, is
critical to your restaurant's accounting procedures. Your income
includes all cash, credit card and check sales received. Outgoing
expenses should be recorded with the help of receipts and invoices.
Your Point of Sale (POS) system typically keeps track of all credit
card and cash sales, and all receipts should be filed and recorded
in a Profit and Loss document (P&L). It is also essential to
keep a close eye on your inventory counts.
Taking Inventory
Your restaurant's inventory includes the supplies, products and
ingredients you have on hand to prepare and serve food and
beverages. Inventory is an important factor in managing restaurant
accounting, because it represents an investment in food and
supplies that are needed to make a profit. You should always
consider your inventory as cash in a different form, and count it
consistently and thoroughly. Learn MoreProfit and Loss Statement
(P&L)
A restaurant's profit and loss statement, or P&L, is much
like an income statement for the restaurant. This document serves
as a report to summarize income, expenses and inventory,
illustrating a restaurant's total profits and losses over a period
of time. It is best to prepare a P&L each week if possible.
This makes it easier to track numbers and comparing reports from
month to month and even year to year.1 A P&L statement includes
information relevant to your cash flow, including sales and labor
expenses. Learn MoreAccounting Software
Although large chain restaurants may have an in-house staff of
accountants available to do the leg-work, many restaurants use
computer programs to help record their financial information. The
best software includes a Point of Sale (POS) system, financial
software, and the software to integrate the two. Fully-integrated
systems like these can take the burden off operators and help them
fully analyze their financials by running comprehensive reports.
Learn MoreThe Restaurant Profit and Loss (P&L) Statement
A restaurant's profit and loss statement, or P&L, is much
like an income statement for the restaurant. This document serves
as a report to summarize income, expenses and inventory,
illustrating a restaurant's total profits and losses over a period
of time. Most P&L statements involve two major sections:
1. The section first specifies any sources of revenue, including
food, beverage sales, merchandise sales, catering, and any other
source of income important to the restaurant. This section also
includes the usage cost associated with the sales, known as the
Cost of Goods Sold (COGS). Learn More 2. The other section involves
all operating expenses in the restaurant. This includes payroll,
rent, utilities, and repairs, among others
The difference between the revenue and the expenses determines
whether the restaurant reaps a profit or suffers a loss at the end
of a given period.
Restaurant Revenue
All sales income is recorded on the P&L statement. There are
usually separate lines on the statement for the different sources
of income, including the following common sources of restaurant
revenue:
Food and beverage salesThe most obvious means of income in your
restaurant is food and beverage sales, since this is the reason
most people come to your restaurant in the first place. Food sales
will likely be your major source of income. However, this depends
on your restaurant concept. If you run a juice bar, juice will
constitute most of your sales.
MerchandiseMerchandise is another method of boosting profits.
Merchandise includes souvenirs, gifts and other retail items unique
to your establishment that can increase sales, especially from
tourists or holiday shoppers. Merchandise includes the
following:
Gift certificates or gift cards
Cookbooks
T-shirts
Hats
Mugs
Prepackaged food or beverages
CateringAnother method of creating income is by catering, or
engaging in other off-site selling opportunities. Catering parties
and events for customers is a great way to increase daily sales and
reach out to people who have never tried your restaurant. Limited
service restaurants can offer a catered lunch option for
surrounding businesses. Smoothie shops can sell smoothies at local
high schools and sporting events. It pays to learn about your
surrounding area and how you can take your sales outside your
restaurant's walls.
Restaurant Expenses
There are many expenses involved in operating a restaurant.
Restaurant owners or operators can include whatever expenses they
like on their P&L, as long as it helps them to stay organized
and aware of the costs they face. The following are commonly
included on restaurant P&L statements:
Cost of Goods Sold (COGS)Cost of Goods Sold (COGS), also known
as Cost of Goods Used or simply usage, is the cost of the products,
or goods, that your restaurant sells. Essentially, this is the
money spent on inventory. This is usually denoted just below total
sales on the P&L report. To control usage and make the biggest
profit, the restaurant must purchase enough products to serve your
customers without running out and without having too much left over
going bad on the shelves. Learn More
PayrollAlso called labor cost, this is one of the most important
expenses in your restaurant. Part of your business's income must go
to salaries and hourly wages in order to provide paychecks for your
employees. This is considered a controllable cost, however, since
the manager can determine how many hourly employees to schedule,
and can manipulate the number of people on a shift at any time. The
trick is to balance labor in order to provide great customer
service without scheduling more workers than you need. Learn
More
Operating ExpensesThere are several daily expenses incurred
while running the restaurant, such as purchasing or replacing
china, flatware or glassware, as well as any linens or paper
products that may need to be cleaned or replenished. These can be
lumped into operational expenses on your P&L.
Occupancy CostsKnown as occupancy costs, rent or mortgage,
property taxes, water and sewer taxes, gas and electric, insurance,
and repairs all fall under the restaurant owner's responsibility.
These are typically known as fixed expenses since restaurant owners
usually have to pay a steady amount on these costs every month.
When to Prepare a P&L ReportIt is best to prepare a P&L
each week if possible. This makes it easier to track numbers and
compare reports from month to month and even year to year.1 The
main reason for the P&L report is simply to track these profits
and expenses to see how well your business is doing. When you know
the numbers and trends, you know what changes you can make to
improve your business profits.
Sample P&L Statement
The categories listed on the P&L, including all the line
items in each category, are dependent on the information the owner
needs or wants to analyze. P&L statements will look different
for each restaurant, depending on the type of food product, the
required occupancy expenses, and the operations costs unique to the
establishment. Look below for a sample restaurant P&L:
Download a sample Profit Loss Statement (xls)
Restaurant Cost of Goods Sold (COGS) Made Simple
Cost of Goods Sold (COGS), also known as "cost of goods used" or
simply "cost of usage," is the cost to your restaurant of the food
and beverage products your restaurant sells. Since your goods
pertain to your food and beverage inventory, COGS is determined
with the following equation:
The beginning inventory means the amount of product that you
have in your kitchen and storage rooms at the beginning of a
period, usually the beginning of the week. For instance, if Monday
is the start of your business week, and you have $5,000 worth of
food and beverages on your shelves, $5,000 is your beginning
inventory.
Purchases means the amount of inventory you purchase in food and
beverage orders in that period of time. If an order of another
$3,000 worth of inventory arrives on Friday, this would be
considered the purchase.
Ending inventory, then, is the amount of food product you have
left when the work week is over. Although you purchased product
during the week, but you will have less inventory at the end of the
week since you sold the food to your customers. For example, at the
end of the work week, you have $4,000 worth of inventory
remaining.
For example, if your restaurant has $5,000 worth of inventory on
hand on Monday, and then purchases another $3,000 of food and
beverage product, you have a total of $8,000 worth of inventory at
the beginning of the week. The following Monday morning, you arrive
at the restaurant and count $4,000 worth of inventory. This gives
you a usage cost, or COGS, of $4,000. This means that you sold
$4,000 worth of inventory. The equation looks like this:
INCLUDEPICTURE
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\* MERGEFORMATINET Adding Transfers to the Numbers
To be even more accurate, you can use the equation below:
"Transfers out" include any products that you send out of the
restaurant to another area in your restaurant (such as from the bar
to the kitchen) or to another restaurant altogether (often another
restaurant in the same chain). Thus, "transfers in" are products
that you transfer from another restaurant to your own. If you have
no transfers in or out, simply leave these parts of the equation at
zero value. It is important that any transfers are recorded because
any items coming in or leaving your kitchen will affect your
inventory count.
INCLUDEPICTURE
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\* MERGEFORMATINET
INCLUDEPICTURE
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\* MERGEFORMATINET
INCLUDEPICTURE
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\* MERGEFORMATINET Referring back to our example from above,
imagine the following scenario: due to the unanticipated celebrity
of your weekend special, chicken with exotic fig sauce, your
restaurant is about to run out of exotic figs. Since you are a
chain restaurant, you are able to phone another location and ask if
you might be able to use some of their exotic figs. It happens that
the other location has excess inventory of figs and can transfer
one box of figs to your restaurant. You drive over the following
morning to pick them up. One box of exotic figs costs $85.00.
Keeping with the same numbers as above, your COGS equation would
look like this:
The other restaurant operators would do the opposite; that is,
remove $85.00 worth of inventory from their kitchen and subtract it
from their beginning inventory numbers.
Food Cost Percentage
One of the most important numbers restaurant managers and owners
look at is food cost percentage. In food service, this percentage
represents the portion of sales spent on food. Since you reap sales
from the inventory you use, you can determine the food cost
percentage by money you spent on food sales (COGS) by your total
food sales. The following equation may help clarify the
process:
Using the original example, one would determine the food cost by
taking the COGS dollar amount and dividing it by the total sales
for the week. So, let's say the sales for the week were $12,750.
Your new equation would look like this:
INCLUDEPICTURE
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\* MERGEFORMATINET In this case, about 31% of sales were spent on
food and supplies. This is a fairly typical food cost for a
restaurant.
Categorize the Cost
It is very helpful to break down your food cost into all the
types of foods and beverages your purchase. For instance, a 31%
food cost may be broken down into the following food
categories:
INCLUDEPICTURE
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\* MERGEFORMATINET
INCLUDEPICTURE
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\* MERGEFORMATINET
INCLUDEPICTURE
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\* MERGEFORMATINET
INCLUDEPICTURE
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\* MERGEFORMATINET If food cost is high, categorizing like this
will help determine where the money is being over-spent. Operators
can keep a much better tab on food cost when they know exactly what
percentage of the total cost they are spending on each category of
food.
Determining Gross Profit
The COGS equations are essential for figuring the restaurant's
gross profit:
Gross profit is calculated by deducting money you spend on food
and beverages from your total revenue. Using the ongoing example,
you would subtract your COGS ($4,000), from your total sales
($12,750) in order to find your gross profit. The example looks
like this:
INCLUDEPICTURE
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\* MERGEFORMATINET Although gross profits may be included in your
Profit and Loss (P&L) statement, the important number to look
for is the net profit. Net profit, or actual profit, is the gross
profit minus all operating costs such as labor, rent, repairs, and
marketing costs, to name a few. This is your restaurant's true
profit after all is said and done. Learn MoreMaking profits is the
restaurant's number one goal. In order to do this, the manager
needs to simultaneously bring in revenue and control costs in the
restaurant. This is one of the biggest challenges, but also one of
the manager's most important responsibilities. Maintain a steady,
profitable food cost by adhering to all recipes, assessing
purchasing procedures and properly conducting inventory in your
restaurant. Basic Tips for Creating and Using an Annual Budget in
Your Restaurant
Creating an annual budget involves estimating about how much
money you will spend in different areas of your restaurant. For
instance, you know there will be expenses associated with running
the business, but it will help you enormously if you can anticipate
those expenses and stay within a financial plan from one month to
another. An annual budget gives you goals to reach and limits to
beat. The budget is also essential to plan for the restaurant's
future spending. Here are a few tips for creating a budget that
works for your restaurant.
Plan by Month or Period
Most restaurants use a system of 12-month or 13 four-week
periods to track their annual budget. By breaking the budget down
into these types of sections, it is easier to see when money is
moving in and out of the restaurant.
Determine Your Projected Sales
Ascertaining your projected sales, also known as a sales
forecast, helps you figure out how much your restaurant will make
in sales during a given period. There are many ways to determine
your restaurant's projected sales. It comes down to making an
educated estimate about the customer traffic and resulting sales
your restaurant generates.
Anticipate Your Costs
In the restaurant, budgeting is often a game of balancing costs
and income. In fact, a budget is much like a profit and loss
(P&L) statement extended over a longer period of time. Be
prepared to account for the following costs in your annual
budget:
Rent or mortgage payments
Taxes
Insurance
Labor/payroll
Utilities
Loan payments
Operational supplies
Repairs and maintenance
Marketing
Training
Food service professionals suggest that you plan to spend about
30 percent of your budget on food, 25 percent on labor, 10 percent
on rent or mortgage, and 3 percent on utilities.1 The rest goes in
small parts to operational expenses, marketing, taxes, maintenance
and other variable costs. These are simply estimated guidelines to
follow, as every restaurant's expenses and budget are different.
Look below for a graphical representation of these suggested
expenditures:
Know Your Breakeven Point
The breakeven point is the volume of sales needed to cover all
expenses without making a profit. It is the bare minimum amount of
sales the restaurant operation needs to bring in to survive. It is
important to know your restaurants breakeven point so that future
financial decisions can be made in hopes of making a reasonable
profit.
Analyze Your Financials Every Period
Examining your P&L and your budget on a weekly and monthly
basis will help you keep your bases covered in terms of realizing
your expenses and income. Evaluate your budgeted operating expenses
and your actual expenses, as well as the net profit you anticipated
and what your restaurant actually made. Make a note of any areas in
which your expenses exceeded your budgeted amount.
When budgeting for the year, especially if you are doing so for
the first time, it helps to have a budget worksheet. Download a
sample budget worksheet (xls) to your own back office computer.
How to Price Menu Items in the Restaurant
Books on restaurant management will tell you that pricing your
restaurant menu items is somewhat of a vague process. You can
figure out how much you are paying for food supplies and simply
charge three times as much. You can try to out-do your competition
by lowering your prices, or you can guess and hope your customers
will pay the prices you apply.
The options above, although not unheard of, probably incur too
much risk. After all, your menu, pricing included, is one of the
main reasons your customers come through your doors. They want a
quality product and they want to pay your operation accordingly.
Your prices will influence how your restaurant is perceived by the
public. Prices directly affect your restaurant's profitability, so
it is important to spend the time required to get it as close to
perfect as possible. Although there is no exact formula, the
guidelines in this article will help demystify the process so you
can gain the most benefit from your decisions.
Things to Consider Before Pricing
There are a variety of aspects that affect restaurant menu
pricing methods. Consider the following influencing factors and how
they affect your restaurant before you begin pricing or changing
menu prices.
Direct costs. These are the ingredient costs associated with the
food item itself. This also involves the food cost, how you portion
the servings, and how much is spilled, overcooked, thrown away or
otherwise wasted during the preparation process.
Indirect costs. Indirect costs are those that do not include the
actual ingredients that make up a dish, but the aspects of your
restaurant that add perceived value or quality. These provide
significant basis upon which to charge higher prices.
Preparation and labor. The labor to prepare a menu item is
considered an indirect cost. Menu items that require time, effort,
artistry or talent to prepare merit a higher menu price than
something that simply requires heating and plating.
Overhead expenses. Overhead costs for items such as dcor,
product presentation, amenities and marketing efforts. Although
slightly less common, these can create added value and validate
higher menu item prices.
Volatile food costs. Many raw commodity food items, or basic
ingredients with minimal quality variance, may fluctuate as often
as daily. For instance, flooding in Texas could wipe out a tomato
crop, causing supply to drop and demand to increase. You may want
to set your menu prices slightly higher for items that tend to
swing in price, especially for when food costs increase
unexpectedly. This way, you will avoid losing money even when
paying slightly more for those products.
Competition. Check out your competition on a regular basis. You
might even go out to eat at your rival restaurants and take
advantage of the opportunity to see what you can improve about your
own operation.
Service type. Prices will undoubtedly change depending on
whether your restaurant is a fast-casual restaurant or a fine
dining restaurant. Be sure your prices represent the service value
your customers receive. For instance, full service restaurants can
always charge more for their hamburgers than quick-service joints,
because full service restaurants are also providing greater
ambience, better service and often better ingredients than the
quick-service alternative.
Pricing boundaries. Determine your boundaries. Every restaurant
situation is different and prices will vary depending on location,
preparation and simple supply and demand. Figure out the very least
you can charge while still making a reasonable profit in your
business, and then determine the highest price your market will pay
for your items. Gather information about demographics and average
income levels in order to find out the prices people in your market
area will pay.
Common Menu Pricing Methods
Your restaurant concept, that is, the type of food, service and
ambience has a lot to do with the different challenges a restaurant
owner might face when pricing menu items. There are other methods
of pricing menu items, but below are some common suggestions for
how some restaurant owners choose to proceed:
Ideal Food Cost Pricing MethodThis method calls for an owner to
consider the actual cost of a menu item, then consider his or her
ideal food cost percentage. Ideal food cost percentage varies, but
typically lies somewhere between 25 and 30 percent. The two are
divided and voila, you have a menu item price. See the example
below:
Using the ideal food costing method method, the chicken entre
should be priced at $14.16. To use this method, you need to know
the cost of all the ingredients in the recipe for Lemon Rosemary
Chicken, from the half cup of lemon juice to the pinch of fresh
rosemary to the chicken itself. You also need to account for any
side items that come with the entre, and factor that into the menu
price as well. Every food item on the plate matters. Since $14.16
is not a typical menu item price, you may want to lower it to
$13.99; that is, if you cannot think of an inexpensive way to
increase the perceived value of the plate enough to raise the price
from $14.16 to $14.50.
Did You Know?
Items like fryer oil, salt and pepper and condiments can affect
your overall food cost. You should account for a variance of about
4% to keep from losing money on these indirect costs. For instance,
if you are shooting for a food cost percentage of 32 percent, you
should actually try to hit 28 percent to account for those extra
costs.1 Learn More
However, since factors like indirect costs, price volatility and
competition are important to consider, this may not be the most
reliable pricing method. Applying a price markup to all items in
one fell swoop like this may inaccurately and unreasonably over- or
under-price some of your items. And finally, it is always important
to pay attention to the market and see what the customers in your
area are willing to pay.
Competition Pricing Method
The restaurant owner using this method assigns prices to items
based on the general market price or the prices assigned by the
competition. Usually, the owner will either price the item to be
the same as the competing prices, price it slightly lower to get
those looking for a bargain, or price it higher to attract those
looking for higher quality. This means that a restaurant has to
work within a certain price, including labor and preparation,
potentially putting a strain on the chef.
Beware of Price Gouging
Food service operations in ballparks or stadiums tend to charge
people more for their food and goods, since guests do not have the
option to leave and get food somewhere else. However, some places
take this too far by charging more than what is considered
reasonable. Be careful of those upper limits and be fair to your
customers.
For instance, if the owner prices the Lemon Rosemary Chicken at
$14.00 because that is just under the current competition's prices,
and the ideal food cost percentage is 30 percent, the chef needs to
make sure the kitchen is producing this item at no more than $4.20.
This can be complicated.
Demand-Driven Pricing MethodThis concept is based on the
economics of supply and demand. For instance, restaurants in
airports or concession stands at sports stadiums can get away with
charging more for their food items because it is the only source of
food in the vicinity. The demand for food is greater than the
supply, so people are willing to pay more for it. Restaurants that
offer specialty menu items or a unique and exciting ambience can
get away with charging more since it reflects both the food and the
experience.
Study your market and your customer base before pricing your
menu items. You will most likely know what prices are simply too
high, and the last thing you want to do is drive your customers
away. Make your prices competitive and reasonable, and make sure
you are offering the value appropriate for higher cost items.
Evaluate Current Profitability
When you know which menu items are the highest grossing items
(meaning they result in the most profit before any other expenses
are considered) then you know which items to promote. In the chart
below, you can see by looking at the last column that the king crab
legs are the most profitable item on this seafood menu. Even though
the food cost is greater for the crab legs, the gross profit is
higher as well. To many operators, it is the gross profit that
matters most. To maximize your profit, you might consider raising
the price of the other fish entres slightly, or simply train your
serving team to upsell the crab legs.
FishFood CostSelling PriceFood Cost %Gross Profit
Halibut$2.75 $12.79 21.50%$10.04
King Crab Legs$7.50 $20.79 36.40%$13.29
Salmon$6.42 $18.99 35.60%$11.57
Increasing Profitability
Raising menu prices is a delicate issue. Many restaurant owners
are unsure how to handle it because of how it might negatively
affect their consumers' perception of the restaurant. Try the
following suggestions to increase your restaurant's
profitability:
Promote your value. Marketing your brand and your best products
can communicate your value to potential customers. Use coupons,
advertisements, and other marketing strategies to start making more
money.
Make your profitable items stand out. Filler items are those
that take up space on your menu pages but do not offer much in the
way of gross profitability. Make sure you make your highest
grossing items stand out on the menu.
Add appeal to basic menu items. You can make your menu items
more flexible and add value by creating a more attractive name, an
intriguing sauce or dressing or a special theme to the food. For
instance, taking a normal hamburger and drizzling it in a spicy
honey barbeque sauce might add a little pizzazz and appeal, giving
the public more incentive to try it and the owner a reason to
slightly increase the price.
Change prices in small increments. Small increments are less
noticeable when you need to increase prices, and small amounts of
revenue can add up to a large gain in profit. Additionally, items
ending in odd numbers such as .95 or .99 are less off-putting than
whole numbers. 2Use specials to fuel guest interest. Full-service
restaurants are able to create occasional specials that guests can
order off the menu. Although specials can be created from the food
you already have in your inventory, they should not be concocted
from week-old leftovers. Menu specials are a great way to create
new, exciting menu items to entice your customers. If the special
goes over well, you can certainly consider adding it to your menu
to start making a consistent profit from it.
Top Ten Tips for Controlling Food Cost in the Restaurant
Food cost is one of the highest costs in the restaurant. In
order to keep food cost percentage, also known as Cost of Goods
Sold (COGS) at a manageable rate, follow these tips:
1. Keep an eye on your profits and losses (P&L).When you
know what profits you are bringing in as well as the fixed expenses
affecting your business, you can better evaluate your options and
see where you can cut costs. Learn More2. Conduct inventory
consistently.Regular and thorough inventory counts will help you
stay in control of your usage and the costs associated. This is
especially important for high-cost items such as meat and liquor.
Learn More3. Price menu items properly.When you price your menu
items reasonably, your customers will continue to pay you and you
will make a profit on your products. Learn More4. Portion food
correctly.Be sure to serve food in portions that will not over- or
under-fill plates. When customers are finished eating, look at the
plates as they come back to the kitchen. If there is a lot left on
the plate, or you are consistently wrapping up take-home
containers, you may be over-portioning your meals.
5. Handle food properly.Enforce first-in, first-out (FIFO)
rotation for all perishable foods. Keep foods at proper
temperatures and cook all foods correctly to avoid waste and
prevent contamination. Learn More6. Rethink the garnish.Garnishes
often consist of fancy fruits or layers of fresh lettuce which add
visual appeal but are rarely eaten. Use less expensive food items
or remove garnishes entirely to save on food costs.
7. Keep a record of all food waste.Use a waste chart to write
down any foods that are made incorrectly, thrown away or spilled.
Failing to record this "usage" will skew inventory reports and
throw off your food cost percentage.
8. Be consistent with food purchases.Consistency with food
purchases comes with time but can help you to anticipate expenses
from week to week and keep your food costs steady. Learn More9.
Create a rapport with suppliers.Once you are in business a while,
your suppliers will get to know your regular food orders and you
will become familiar with the cost of your purchased goods. Be sure
you stay in communication with your suppliers in case of any
problems with food quality or any issues with food prices. Learn
More10. Train employees to care.When your employees see how your
inventory represents potential profitsas well as their
paychecksthey are more apt to stay aware of waste, portioning and
overall food quality.
How to Control Labor Costs in the Restaurant
Operating a restaurant involves many expenses. Essentially, you
incur labor costs when you have employees working for you. Labor is
an operational expense in just about any restaurant, predominantly
including hourly wages for staff members.
Labor Cost Awareness
Labor costs are typically understood as a percentage of sales.
To figure your labor cost, use this equation:
Many restaurants hope to run a labor percentage below
approximately 20 percent. When the costs begin to climb, anxiety
levels rise as well. Still, simply paying your employees less will
not solve labor cost issues. The keys to controlling labor costs
are improving workplace productivity and scheduling your employees
wisely.
Control Your Labor Costs with Improved Worker Productivity
Increasing productivity improves your overall operation by
building employee skills and confidence. Take time to provide your
staff with sufficient training and communication.
Cross-Train Your Staff
Cross-training is beneficial to both the employee and the
business, since the worker will have a wider range of skills and be
able to help in multiple areas of the restaurant. This allows the
manager to schedule fewer workers while still being able to achieve
the same production and service standards. Some suggestions for
cross-training include:
Train your prep cook to handle the grill
Train your hostesses to work as back-up servers
Train bussers to help run food to customers
Conduct Frequent Staff Audits and Reviews
Another great way to help improve productivity is to perform
regular audits. Take the time to watch and assess your employees
performances. If you find that a large portion of your employees
work days includes inordinately long breaks or downtime, it might
be wise to revise your schedule. Conducting face-to-face reviews
with each member of the staff will help communicate your thoughts
and concerns.
Control Labor Cost With Precise Scheduling
Make sure you have constructed a budget to help keep track of
your annual sales and expenses like labor. Through your budget,
allow a percentage of your sales to cover labor expenses. Then,
create a staffing schedule to reflect your budgeted allowance for
labor expenses. The following tips elaborate these guidelines:
Break down your annual budget. Break down your annual budget
into monthly budgets to help divide the money into weekly sections.
This will give you a weekly budget, from which you can determine
labor costs and make an appropriate staffing schedule.
Design a new weekly schedule for all employees. Relying on a
fixed schedule week after week fails to acknowledge shifts in
projected sales, changes in the weather or other factors that can
affect your business. Adjust the number of staff scheduled each
week to keep compliant with weekly budget constraints. Learn
moreMonitor clock in/clock out times. After every shift, make sure
that all employees have punched in and punched out exactly
according to the schedule. Managers can usually use tools within
the Point of Sale (POS) system to monitor and alter this
information when necessary.
Discuss all schedule change requests in advance. Switching
shifts can create problems when people start to work overtime,
working more hours than the budget allows and potentially breaking
a law, if the workers are youths. Be sure a manager is constantly
aware of any proposed changes in the schedule.
Avoid Over-Staffing
It is often tempting to schedule more people than necessary in
order to ensure that the business runs without any kinks. The
reality is, however, that there will always be a few kinks in the
restaurant business. Scheduling too many employees will increase
your labor costs and reduce your overall profit, hurting your
business overall. If you find that you have over-scheduled, you can
send staff members home early. Train your people to work quickly,
accurately and efficiently while also treating guests with respect
and care. This allows you to operate at a high standard while still
hitting your target labor percentage.
See below for a useful worksheet recording employee labor hours,
pay rates and total labor hours per shift.
Restaurant Employee Wages and Benefits
Wages and benefits vary slightly from restaurant to restaurant,
even for the same position. If you are a manager hiring people for
the first time, or simply assessing wages in order to make changes
to your current payroll, check out the average national
statistics.
Restaurant Employee Wages
Median Wages for Restaurant EmployeesRestaurant worker wages are
different depending on the type of restaurant, the geographical
location, and the worker responsibilities. The chart below
illustrates several restaurant workers' average hourly and annual
wages, as well as the highest and lowest percentile wage estimates
for the jobs, according to the United States Bureau of Labor
Statistics:1Employee PositionHourly WageAnnual Wage
AverageLowest - highest percentileAverageLowest - highest
percentile
Food Service Managers:$23.39$13.58 - $35.61$48,660$28,240 -
$74,060
Restaurant Cooks:$10.56 $7.27 - $14.55$21,960$15,120 -
$30,270
Fast Food Cooks:$8.11 $6.34 - $10.34$16,860 $13,180 -
$21,510
Restaurant dishwashers:$8.20 $6.56 - $10.38$17,060$13,640 -
$21,580
Bartenders:$9.49$6.66 - $14.50$19,740$13,850 - $30,170
Restaurant Hosts/Hostesses:$8.54$6.54 - $11.34$17,770$13,610 -
$23,580
Waiters and Waitresses:$8.93$6.31 - $13.55(with
tips)$18,570$13,120 - $28,180
Minimum WageMinimum wage is the lowest rate businesses can
legally pay their employees. In the restaurant industry, employees'
salaries are often determined by assessing the national minimum
wage and raising it accordingly. As of July 24, 2008, the minimum
wage is $6.55 per hour.2 Minimum wages increase every year. Learn
MoreCommon Restaurant Employee Benefits
TipsTips are often considered a benefit of working in a
restaurant, but many servers and bartenders would most likely
consider it part of their income. These restaurant workers usually
work for a pay rate of less than minimum wage, but take home a good
deal more based on their tip income. Tips are sometimes distributed
among kitchen staff and bussers as well. Unlike other restaurant
benefits, tips are given by guests, not restaurant owners. Learn
MoreMeal BenefitsRestaurants often offer daily employee meal
benefits to their workers. These usually involves one discounted or
free meal from the restaurant menu per employee per shift. However,
each restaurant meal policy is different, depending on corporate
rules, food type and budget. Learn MorePaid Time OffRestaurant
managers may receive a certain number of paid sick days and
vacation days, depending on the restaurant's policies. Hourly
workers typically need to request time off in advance and do not
get paid for vacation days or sick days.
Uncommon Restaurant Employee Benefits
InsuranceRestaurant managers and other supervising positions are
often entitled to insurance benefits in the restaurant. Sometimes
these benefits are even extended to hourly workers, but this
depends on the company. Insurance benefits typically include the
following:
Medical
Dental
Vision
Life
Disability
401KA 401K is a tax-deferred retirement savings investment plan
sponsored by an employer. Employees who are offered a 401K plan
transfer a portion of their income to the 401K account each month
and plan to withdraw it after retirement. Much like insurance, 401K
plans are not offered by all employers, and when they are, they are
mainly offered to managers and assistant managers. Since many
restaurant workers are youths who may not be fulfilling their
careers in the restaurant, 401K benefits are not quite as common
for these hourly workers.
Stock OptionsStock options are a rare benefit, and one that
almost exclusively offered to restaurant managers or partners, if
ever. However, in 2000, the United States House of Representatives
passed a bipartisan bill amending the Fair Labor Standards Act
(FLSA). This bill allows restaurants owners to offer stock option
bonuses to hourly restaurant employees. According to the National
Restaurant Association, the passage of the bill was a major step in
improving restaurant employer-employee relationships.3 Stock
options are often seen as a way the employee can make money in the
stock market. Thus, a benefit like this may improve recruiting
results and employee retention in the restaurant.
How to Make a Restaurant Schedule
A restaurant schedule is essential to your operation. Not only
will the schedule delineate which employees will work the daily
shifts, the schedule is a crucial way to anticipate the daily
sales, control labor costs and ensure that all parts of the
operation have the help they need to run smoothly. The most
important goals of the restaurant schedule include guest
satisfaction and controlled labor costs.
Finding the Staffing Balance
Staffing your restaurant requires a certain finesse. A manager
has to keep in mind that a restaurant schedule needs to reflect the
business needs first. This includes the quality of service your
restaurant provides its guests, as well as keeping labor costs
under control. A big part of this balance is achieved by
appropriately scheduling staff members.
Some restaurants find it difficult to avoid the temptation to
overstaff. Overstaffing the restaurant can help provide improved
attention and service to guests, but can cause your labor costs to
diminish any profits you receive. On the other hand, understaffing
can appear to be a viable way to save money. However, this quickly
leads to employee burnout and diminished service standards, which
ultimately harms your business more than the few saved dollars.
Finding the balance and the perfect staffing levels for your
establishment takes practice and depends on the people you have
hired, your restaurants patronage, your budget allowances and other
variables.
Creating the Schedule
When making the schedule for your restaurant, keep in mind that
there are numerous ways to go about it. Make sure to keep in mind
that the simpler the better, since this can be a time-consuming
process. Project sales and labor data as best as possible to keep
within your budget, and plan for the unexpected when it comes to
the employees.
Use TechnologyThere are several ways of actually making the
schedule. Modern technology simplifies the process, allowing for
daily and weekly labor cost calculation as you plan. Some Point Of
Sale (POS) systems are so advanced that they will prevent staff
members from clocking in too early and record when they clock out
later than scheduled. This is an easy and effective way to maintain
your labor budget as well as your schedule.
Make PredictionsAs you work to create the schedule for each
week, try to predict customer counts and sales. Predicting the
amount of business you will do in a given week is one of the keys
to preparing an accurate schedule. After all, your goal is to
schedule for a well-functioning restaurant. Be sure to match these
predictions with the percentage of your annual budget and sales to
ensure that you are hitting your labor cost target.
Mindfully Schedule Your EmployeesCreating a schedule can be
time-consuming and even tedious. You must keep in mind the
availability of each employee, as well as their skills and talents
to make sure your restaurant has the people it needs to run
successfully. Scheduling a mix of strong team members and those who
need extra help can be a good strategy. It is also a good idea to
stagger employees hours, overlapping them during busy shifts such
as lunch and dinner times.
Finally, be sure to collect information from employees
beforehand, as far as their availability, vacation plans and other
needs. Of course, your main priority is to run the business, but
try to be prepared with this information so that you are not left
with the task of covering shifts at the last minute.
Often, a restaurant will create a schedule to show how all the
different areas of the restaurant will be staffed. This is often
called the Master schedule, and will reflect how the dining room,
kitchen, bar and any other areas of the restaurant should be
staffed in order to handle the service the restaurant expects. The
example below shows the positions, days, times and even the labor
costs of employing the staff:
Using the Schedule
Regarding scheduling, it is a good plan to have a set of
regulations regarding how it will be used, where it will be posted,
how it can be altered, and how often a new one will be made.
Consider these factors and communicate any pertinent information to
your employees. This type of planning can save a good deal of
headache for any manager.
Schedule FrequencySome businesses will create a new schedule for
each week, which can be a good way to stay abreast of sales
projections as well as staff needs or other variables. However,
this is up to the restaurant.
Employee AccessOnce you have created the schedule, hang it where
your employees can see it and make copies of their upcoming shifts
for the week. Some businesses have the ability to post their
schedules online so employees can access it at home, school or
work.
Altering the ScheduleNo matter how much time and effort you put
into creating the perfect schedule, no schedule is going to remain
pristine once tacked onto the staff bulletin board. A typical
manager is often approached with requests to change the schedule
with a multitude of reasons. An employee may become sick after you
have created the schedule for the week, and you need to cover his
or her shifts. An employee may want to take more shifts to make
more money. Another employee may have weekend plans and cannot work
the time you scheduled.
In cases like these, have a plan of action. Communicate to
employees that managers are the only ones allowed to make changes
to the schedule, and must notify a manager at any time they need to
change anything. Some employees are more responsible than others,
and it can be risky to let employees change things without
notifying a manager first.
How to Reduce Staff Turnover and Improve Employee Retention in
Your Restaurant
Hiring great restaurant workers is one thing. Keeping them is an
entirely different thing. Most restaurant operators realize that
their employees are not typically planning on a long-term career in
the food service industry. At least, that is the trend according to
research from the National Restaurant Association. Research shows
that employee turnover in a sampling of full-service restaurants
lingered just over an average of 78% in 1997.1 Almost ten years
later, another report showed that employee turnover had risen to a
rate of 107% for another sampling of restaurants.2 Although
comparisons between these two findings are not direct, the research
suggests that employee turnover in the restaurant industry is a
growing concern for owners and operators.
Reasons Employees Leave
There are numerous reasons for an employee to leave a job.
However, the reasons can become amplified by the high stress levels
and relatively low pay rates in a typical restaurant. Some of the
most influential reasons employees leave their jobs are listed
below.
Inadequate Pay Rate
Lack of Recognition
Not Enough Hours
Conflict With Staff or Management
Too Few Opportunities for Advancement
Lack of Employment Benefits
Best Ways to Encourage Employee Retention
Despite the numerous reasons restaurant staff leave their jobs,
there are ways you can work to retain them. Finding and training
new employees can be a time-consuming and costly enterprise, so
taking the extra step to keep your best workers around will improve
both your business and your peace of mind.
Offer Pay Raises
Studies show that about one third of all employees who choose to
leave the workplace leave for a better paying position elsewhere.3
You should not only offer competitive wages, but when you notice an
employee with consistently high performance, take the opportunity
to reward them with a raise. Even a small increase is important to
keep your best people onboard.
Offer Care and Benefits
Take the time to get to know your employees as people. Learn
about their families, pets, hobbies and passions. When you build a
relationship of respect and care, your people will feel better
about coming to work and likely return the sentiment. Another part
of taking care of them is offering them insurance. Whenever
possible, offer a benefits package.
Recognize and Reward
Hardworking, committed and ethical employees can be hard to come
by. When you find them, be sure they are appropriately recognized.
For instance, praise their work in front of their peers. This shows
the rest of the team that you like what you see. You might reward
an employees achievement with a gift card or some free movie
passes. Small gestures like these can let the employee know his or
her efforts are not going unnoticed.
Be as Fair as Possible
Employees are looking for someone who is fair to them,
especially when it comes to pay rates and scheduling. When
determining pay rates, pay fairly according to the offer given
during the hiring process. If the employee shows extra effort or
increased achievement, then consider discussing a pay increase.
Scheduling can be a difficult task, but attempt to assign shifts
based on labor budget requirements, positions needed and requested
time off. Remind employees that you need to run a business at all
times, and that your scheduling choices are made for the good of
the company. Learn MoreImprove Communication
Staff members may say they feel a lack of connection between the
rest of the staff and the management team. As a manager, be sure to
promote healthy communication whenever possible. If you give
direction, be sure to follow up afterward. Hold staff meetings
frequently. Greet and talk with each employee daily, or as often as
possible. Let staff members know what is happening in the business
and make them feel that they are a part of its successes.
Resolve Conflicts
Part of a managers responsibilities is to ensure that employees
can work together as a team, even when they do not especially like
one another. Speak to the whole team about cooperation and the
importance of running the business. Take further action if needed,
such as mediating a private conversation with just the staff
members involved. If the trouble is with your management style, you
might speak privately with the employee to see if you can resolve
it. You may have to respectfully acknowledge the difference in
opinion but still make it clear that you are in charge of their
paycheck when all is said and done.
Properly Train All Employees
From day one, all staff members in the restaurant should have an
adequate training program. This should include an orientation to
the position and the restaurant, as well as all necessary
information to perform up to standard, including safety training,
equipment training and customer service training, among others.
Employees who feel knowledgeable and comfortable in their
surroundings will more often feel successful and content with their
position.
Provide Opportunities for Advancement
Whenever possible, consider each staff member for potential
advancement within the business. For example, take note of
employees performance and interests, and offer training programs
for hostesses who want to become servers, or dishwashers who would
like to move up to line cooks. These types of advancements boost
morale as well as interest in the industry.
Restaurant Server Training Guidelines
Most fine dining and casual dining restaurants employ a
waitstaff to serve and care for the patrons. Servers are an
essential part of your concept; they deliver the positive attitude
and respect that create a memorable experience for dining guests.
Just as a manager should expect a top-notch server, servers need
solid training and ongoing support to succeed.
Initial Training
When servers first start in a restaurant, training is essential.
Even if the newly hired server has experience working in a
restaurant, they will need an orientation to the new environment,
new procedures and a new management team. They may even have
acquired some bad habits in their past jobs. Train your new servers
right from the start by educating new hires in the following
areas:
Restaurant concept. Inform your employees of the history and
other interesting facts about the restaurant. Often the restaurant
name, founder, owner or structure will have some special meaning or
interest value which can engage the patrons and make them feel like
part of the concept itself.
Restaurant layout. Servers spend their entire shifts on their
feet, moving quickly between the kitchen and the dining room floor.
Proper orientation to the layout of the restaurant, including
restrooms, emergency exits, storage rooms, kitchen space and dining
room arrangement are important to a servers speed and comfort in
the restaurant environment.
Menu knowledge. Managers often provide new servers the
opportunity to taste several items on the menu before serving them.
In order to sell the items, it is essential that servers sample as
much as possible so they can suggest a favorite or describe the
flavors of the special. Additionally, guests often want to know the
nutritional information of dishes, or how they are prepared.
Etiquette. Proper service etiquette is paramount to a memorable
dining experience. Servers must be adequately trained in
exceptional customer care before they begin working shifts. Provide
opportunities to practice proper serving techniques and etiquette
by engaging in role-modeling exercises, or by pairing more
experienced workers with new ones. Emphasize the desirable traits
in a restaurant employee.
For example, use the acronym S.E.R.V.I.C.E. to remind your
servers of how they should portray themselves.
Shadowing. Many restaurant owners or managers will require that
all new hires spend time shadowing, or following other servers
throughout one or more complete shifts. This allows the more
experienced server to model proper server etiquette, menu knowledge
and responsible behavior to the new hire, easing him or her into
the new role.
Instill the right behaviors. Throughout the initial training
period, instilling the correct behaviors in new hires is crucial.
One of these crucial habits involves writing orders down. This
shows a desire for precision and eliminates embarrassing, forgetful
moments. Other behaviors that deserve emphasis include:
Completing cleaning duties throughout the shift
Helping team-mates whenever possible
Leaving personal issues at the door
Ongoing Training
Though your experienced servers may not require intensive
training sessions, ongoing training can help improve skills and
address any recurring issues.
Improve suggestive selling skills. As servers become better
acquainted with the restaurant and the menu, they are able to
suggest the best appetizers, the most profitable entres and the
most irresistible desserts to improve their sales. Some ideas to
help guide employees in this direction include the following:
Becoming familiar with the menu
Learning which menu items are most profitable
Gaining knowledge of daily specials
Selecting favorite menu items
Suggesting wine pairings
Upselling menu items
Ignoring vs. smothering a table. When serving a table, it is
important to find the balance between ignoring the patrons and
spending too much time with them. Training a server to read the
attitude at a table is a good way to tell about ho