Restaurant Tip Reporting 101

Did you know tips your servers receive are taxable in the United States? But it’s not just the employee’s responsibility to track their hard-earned tips and report them as part of their taxable income. As a restaurant owner, tip reporting plays into your job, too; you have to make sure you know how much cash is flowing in and out of your business — whether it’s through regular wages or from tips.

Here’s the lowdown on tip reporting for both employers and employees.

Are restaurant tips taxable?

The short answer: Yes. 

The IRS requires every tipped employee to report those tips to their employer. Generally, a “tipped employee” regularly earns over $30 a month in tips, so this likely applies to most of your waitstaff. Tips include any cash tips and tips added to credit or debit charges on a bill. If your server received it, it counts as income.

There’s one exception. This does not include service or mandatory gratuity charges you’re already adding to a check — that counts as regular wages.

Who is responsible for reporting tips to the IRS? 

Both restaurant employers and restaurant employees are responsible for reporting tips to the IRS. The majority of the work, however, falls on the employee, and should be a part of their regular clocking out routine. We’ll talk more about what that looks like in a moment.

How do you report cash tips?

The way you report your cash tips to the IRS differs based on whether you’re a restaurant employee or the restaurant owner.

Your servers must:

  • Keep a daily tip record using Form 4070A, Employee’s Daily Record of Tips. This must include their legal name and signature, address, social security number, workplace, time period covered, and total amount of tips.
  • Report all tips to you by the 10th of the following month, unless the total is less than $20 per month 
  • Report all tips on their individual income tax return using Form 4137, Social Security and Medicare Tax on Unreported Tip Income
  • While unlikely in a restaurant setting, the IRS also requires them to record any non-cash tips you receive, such as tickets, passes, or gift cards, and note the value in their individual income tax return

Employers must also report tips to the IRS. That means they need to:

  • Retain a copy of all tipped employees’ daily tip record
  • Withhold taxes based on combined wages and tip income and report those withheld taxes as part of Form 941 in your quarterly tax returns
  • Include tipped income as part of Form W-2, in Box 1, 5, 7, and 12

What is the FICA tax tip credit?

The FICA tax tip credit gives food and beverage business owners a tax break on employee earnings from tips. You still need to pay the FICA taxes (currently 7.65%) up to the federal minimum wage, but after that, you would be eligible for the credit. Talk to your payroll or accounting team, and learn more about it here.

Note: This is different from the FLSA tip credit, which you can opt-in to in order to save money on your minimum wage obligations. Essentially, it’s the difference between the federal minimum wage and base pay for tipped employees. For a full overview of the FLSA tip credit, click here.

5 tips for tip tracking and reporting 

Tracking tips can be challenging, especially if you have multiple locations or more than one or two employees. Here are a few ways to make it easier:

  1. Trust your accounting team. While the tip process can be tricky, it’s common practice in restaurant payroll. If you haven’t already, it may be worth investing in an accountant or accounting agency with food and beverage experience you can trust so you can focus on the day-to-day restaurant operations.
  2. Use technology to your advantage. Depending on what you’re using, you may already have a built-in way to record tips at the end of every shift. Many restaurant POS systems do this, or you can look into apps like Just the Tips, ServerLife, or Tip Counter.
  3. Set a reminder on your calendar and/or use your email service provider to send an automated email to your employees every month. You need the full log of the month’s tips by the 10th of the following month. Make it easy to get that information from your team by setting a calendar reminder or putting together an automated email through your email service provider you’re already using.
  4. Include tip reporting training for your employees. If they’re new to the restaurant business, or they’re working for you as their first job, they may not know that tips count toward taxable income. Include information on how to do this as part of their employee onboarding or put it on the agenda for your next family meal.
  5. Use Kickfin to pay tips instantly. Track tips and pay out through direct deposit with Kickfin, so tracking and reporting are easy come tax time.

Track your tips more easily with Kickfin

Kickfin gives you 100% visibility in tip payment history — by individual employee, by location, or as an entire organization. Get a demo here to see Kickfin’s tip tracking and reporting in action!

The Best Podcasts for Restaurant Owners in 2022

If you run a restaurant and you’re not yet a restaurant podcast junkie: Your time has come.

For those restaurant owners and execs who have blissfully ignored the recent podcast wave — we get it. Every time you turn around, it seems that someone’s launched their own show. It can be hard to separate the treasure from the…well, the other stuff. 

But there are some real gems in the hospitality podcast world. If you follow the right folks, you’ll get unprecedented access to seasoned, successful (sometimes famous) restaurant pros. And they’ll lay it all out there for you — from unbelievable war stories to operational insights to crazy, never-before-shared growth hacks that actually worked. And of course, some that didn’t.

So: the next time you’re commuting to work, or traveling, or washing dishes, or trying to tune out your toddler’s tantrums (just us?), grab your AirPods and add these podcasts to your must-listen list. 

The Best Podcasts for Restaurant Owners

Food on Demand // Tom Kaiser and Nick Upton

Food On Demand is a monthly podcast that covers the latest news “at the intersection of food, technology and mobility,” with a heavy focus on the future of delivery and off-premises operations. Most episodes feature a specific topic or trend — e.g., drone delivery, virtual kitchens — as well as interviews with experts and operators who are driving the evolution of foodservice. Past guests include David Bloom, Chief Development and Operating Officer of Capriotti’s; Don Fox, CEO of Firehouse; and Fred Lefranc of Results Thru Strategy.

  • About the hosts: Tom Kaiser is the editor of Food On Demand, a media brand for restaurateurs, foodservice professionals, restaurant technology suppliers, and catering and delivery providers. Nick Upton is the Restaurants Editor for Food on Demand and Franchise Times. In addition to the podcast, Food on Demand also publishes a weekly e-newsletter and hosts an annual conference.
  • Catch an episode: Episode 20 of Food on Demand features Meredith Sandland and Carl Osbourn, authors of “Delivering the Digital Restaurant.” Listen here

FULL COMP: The Voice of the Restaurant Industry Revolution // Josh Kopel

Created in partnership with Yelp for Restaurants, FULL COMP is a weekly podcast that explores the past and future of the hospitality industry. Host and Michelin-rated restaurateur Josh Kopel interviews both renowned hospitality professionals (ever heard of Wolfgang Puck?) as well as thought leaders from outside of the industry — many of whom offer smart new perspectives on an old business.

  • About the host: With more than 20 years in hospitality under his belt, Josh created FULL COMP to help restaurateurs “survive the present and thrive in the future.” He also hosts Restaurant Marketing School, and he’s currently the president of the California Restaurant Association. 
  • Catch an episode: Episode 160, “Offboarding Yourself,” features Michele Hecken, an executive coach who helps business owners get out of their own way so they can foster growth and empower their team.

Hospitality Hangout // Michael “Schatzy” Schatzberg and Jimmy Frischling

A production of Branded Strategic Hospitality and Foodable Network, Hospitality Hangout is a podcast devoted to all things hospitality, technology and capital. The “Restaurant Guy” (Michael Schatzberg) and the “Finance Guy” (Jimmy Frischling) explore the latest trends and breakthroughs in hospitality tech — which includes everything from digital marketing to kitchen robots. While the two lively hosts bring plenty of personality (and smarts) to the show, most episodes also feature conversations with industry leaders who know a thing or two about restaurant innovation.

  • About the hosts: Michael Schatzberg and Jimmy Frischling are co-founders of Branded Strategic Hospitality. Michael is also the managing director of Branded Restaurants (which Jimmy co-founded), and he has over 35 years of hospitality brand development, management, and marketing experience. An entrepreneur and finance professional, Jimmy has over 30 years in the financial services, capital markets and hospitality industries. He serves as partner and finance director at Branded Restaurants, and he’s a principal at Oak Branch Advisors as well as a trio of municipal bond data and technology companies.
  • Catch an episode: Season 5, Vol. 2 features Carissa De Santis, chief information officer at Dickey’s Barbecue Restaurants, who talks about building their virtual brand, international expansion, and more.

Restaurantopia // David Ross, Brian Seitz, and Anthony Hamilton

Restaurantopia is a podcast all about restaurant management and operations. It’s heavily geared toward independent restaurants — but really, there’s something for everyone. Episodes feature a wealth of tactical content, and it’s a great podcast to follow if you’re looking for information specifically around cost control, marketing, management and personnel issues. Interviews focus on real-world learnings and successes from guests like Ken McGarrie, founder of Korgen Hospitality, and David “Rev” Ciancio, a hospitality marketing executive.

  • About the hosts: David Ross is a sales pro and the COO of Hillcrest Foodservice, which sponsors the show. Brian Seitz, a member of the Hillcrest management team, has a background in operations, law and finance. Chef Anthony Hamilton is a graduate of the Culinary Institute of America and has more than 20 years of restaurant and hospitality working experience, ranging from quick-service outlets to full-service catering to fine dining. 
  • Catch an episode: Episode 66, “Restaurant KPI Benchmarks and What to Make of Them,” breaks down specific numbers around common (and uncommon-but-useful) industry benchmarks.

Restaurants Reinvented // Jen Kern

The Restaurants Reinvented podcast spotlights industry leaders and change agents — both the seasoned pros and the up-and-comers you need to know. Host Jen Kern brings a strong perspective to the show, asking her interviewees insightful questions around brand building, guest engagement, and revenue-driving strategies. The knowledge and experiences shared here inspire listeners to approach historical challenges in new ways — and they can expect to leave each episode ready-to-implement tools and tactics for their own operations.

  • About the host: Jen is the CMO of Qu, a centralized restaurant tech platform that goes beyond POS to connect on- and off-premise ordering, loyalty, and production experiences for restaurant chains. A long-time CMO, Jen leverages her business acumen to draw out stories and insights from her guests that resonate with restaurant owners on every level.
  • Catch an episode: In Episode 9, Jen interviews Greg Creed, former CEO of Yum! Brands. Greg shares insights and lessons learned from his time leading some of the world’s most well-known brands. 

MP TV // Matt Plapp 

MP TV is an “in-person video podcast” — but unless you really want to put a face to the voice, listening in is usually sufficient. Host Matt Plapp interviews restaurant and brewery owners and operators about their successes and failures in the business. Matt isn’t afraid to ask tough questions about wins and losses, and he likes to go deep on topics like building and retaining a strong team, brand development, and customer loyalty. In addition to business owners/operators, he’ll often bring on industry vendors and advisors — like food distribution execs and CPAs with a hospitality focus.

  • About the host: Take one look at Matt’s website, and you can tell he’s a busy guy. In addition to running MP TV, Matt is the founder and CEO of America’s Best Restaurants, an industry consultant for major franchise brands, and three-time author. He’s kind of the “king of content” for restaurants; if you’re ready to take your business to the next level, Matt’s probably got a resource for you.
  • Catch an episode: “Crunching The Numbers With Chris Rogers” features the CEO of AEH Accounting, who shares advice and ideas about restaurant marketing and finance.

BDO To-Go Podcast // Jeff Tubaugh and Dana Zukofsky 

BDO To-Go is a monthly podcast hosted by Jeff Tubaugh and moderated by Dana Zukofsky. Each episode features subject matter experts who explore industry trends and best practices. The conversation often revolves around the impacts of ongoing consumer and economic shifts — and how to leverage constant change to achieve meaningful growth and success. 

  • About the host: Jeff is a partner at BDO and Dana is a director in the firm’s National Restaurant Practice. Both Jeff and Dana have deep expertise in restaurant/hospitality accounting, compliance, and other financial aspects of the business.
  • Catch an episode: “The Scope of Restaurants Today: Supply Chain and Labor Shortages” features Mark Bromberg, the president at Apex Restaurant Group, which focuses on chain restaurant improvement, management, and rejuvenation.

Keys to the Shop // Chris Deferio

There’s a special niche in the podcast world just for coffee shop and cafe owners (and plain old coffee-lovers). Chris Deferio’s podcast is a definite stand-out. Keys to the Shop provides coffee retail professionals the insights and tools they need to grow their business or advance their coffee careers. Chris, an expert himself, leans on fellow industry vets to deliver actionable advice around management, leadership, and personal development. At the time of this publication, Chris has produced over 300 episodes. 

About the host: Chris has spent more than 20 years in the specialty coffee retail industry. His roles have included barista, trainer, multi-unit cafe operations manager, consultant — and of course, podcast host. His clients range from small-but-growing cafes to large, well-established brands. 

Catch an episode: In episode 314, “The 6 Essential Qualities of Coffee Shop Leaders,” Chris discusses the things leaders develop in succession that allow them to lead people sustainably.

Are we missing your favorite podcast?

If you listen to (or host!) a show for folks in the restaurant business — give us a shout on LinkedIn and we’ll add it to our list! 

How to Prevent Restaurant Theft

Ask any seasoned restaurateur, and they’ll tell you the same story: Restaurant theft is a problem in the hospitality industry. 

The nature of the restaurant business — and all-too-common messy accounting practices — open many restaurants up to everything from inventory theft to skimming to full-blown embezzlement. It’s not uncommon for restaurant theft to go unnoticed for days, weeks or even years — which can have a major impact on your bottom line.

While “inside jobs” account for a lot of the issues, you can’t assume that every employee is out to get you. (Of course, it’s never a bad idea to revisit and refine your hiring practices.)

But you should safeguards and policies in place to protect your business and your people from restaurant theft. Here’s what you need to know.

A rundown of restaurant theft statistics you should know

The best defense against any type of fraud is data. Here’s what you need to know about restaurant theft:

  • 75% of employees have fessed up to stealing from their employer — and up to 30% of business failures may be due to this kind of employee-based fraud. (U.S. Chamber of Commerce)
  • Restaurant theft causes up to $6 billion in lost revenue for restaurants annually. (Forbes)
  • Theft accounts for up to 4% of food costs (National Restaurant Association)
  • 95% of all businesses suffer from theft in the workplace (California Restaurant Association)
  • 75% of inventory shortages happen because of restaurant theft (National Restaurant Association)
  • The average employee steals 4.5 hours of work each week from their employer. (Connecteam)
  • 80% of white-collar theft occurs at companies with fewer than 150 employees, and 50% occurs at companies with 25 or less. (Hiscox)

Who steals from restaurants: 5 different types of restaurant theft

Restaurant theft takes several different forms — not just making off with cash from the safe in the middle of the night. You may also experience:

    1. Food and inventory theft: This could be as innocuous as snacking or drinking outside family meals, taking leftover food home or delivering “free” meals to friends or family stopping into the restaurant. But it could be much more serious, like swiping supplies off of delivery trucks.
    2. Point-of-sale (POS) theft: This kind of theft is much more serious, from taking cash out of the register to inflating tips, or improperly ringing up items and pocketing the difference. 
    3. Accounting fraud: This can be a lot harder to spot, especially since you may have outsourced your accounting to a bookkeeper. This looks like underreporting earnings, skimming cash, setting up fake accounts, or manipulating the books in some way — and if caught, can lead to jail time for embezzlement.
    4. Intellectual property theft: You’ve likely spent years fine-tuning your recipes and cultivating just the right ingredients or processes. If you have staff that work in multiple restaurants — or a chef that leaves to start their own thing — you may find eerily similar recipes or techniques popping up at other spots in your neighborhood.
    5. Time theft: This is common for any kind of clock-in system, and can often happen just by accident if an employee forgets to punch out. This looks like taking unscheduled breaks, arriving late or leaving early, “buddy punching” (when a coworker punches in for you, to cover), or doing some generous rounding on time sheets.
  1.  

How to prevent theft in your restaurant

The good news? You can prevent restaurant employee theft by putting safeguards and policies in place, including investing in the right kind of technology:

Pay your employees well and on time

Don’t be that boss. 

One other type of theft we haven’t talked about is wage theft — when employers hold out wages, or don’t pay their workers in full — and it’s increasingly common. In fact, 34% of workers reported an increase in wage theft since 2020. Viral stories like this waitress who only received one cent for six weeks of work illustrate the gap in trust between employees and employers. 

The best way to prevent theft is to make sure that your employees feel like they’re being treated fairly, and that means paying them well, on-time, and including benefits like transportation stipends, health insurance, or paid time off.

State expectations and policies up front to employees

A lot of restaurant theft isn’t actually done with malicious intent — things like comping meals, snacking, or taking breaks are rarely done in an effort to hurt the restaurant — but they do add up. Make sure when you’re training your employees that you include a session on expectations with employee policies like this, so that everyone is on the same page (and so if they do violate the rules, you’ve at least warned them once.)

Build an open, fulfilling work environment

Creating an open, accountable working environment is the biggest way to prevent employee theft. You may still have a bad actor in your midst, but if your team trusts one another, it’s much more likely that you’ll hear about it. Instead of wondering where that extra cash went, you’ll be able to address the deeper, underlying issues if someone does engage in restaurant theft (for example, it could ironically be the only way for them to put food on the table — restaurant workers are twice as likely to experience food insecurity compared to the rest of the population.) 

For your part, don’t assume that your employees will automatically steal from you. The more trust and empowerment you give them, the more likely they’ll respond positively. 

Use technology to your advantage

It’s a lot easier to cook the books if there isn’t an AI humming in the background, looking for fraud patterns. Installing accounting software can alert you to potential mistakes (or worse, embezzlement) while a POS system can help keep receipts, cash-outs, and payments on track. 

Back-of-house, inventory management systems can check what goes in and what goes out, and there’s nothing wrong with installing an old-fashioned security camera at key points in the restaurant, like above the register, at the delivery dock, and upstairs in the offices.

If you’ve already experienced this problem, it may also be worth investing in a more rigorous background check for your employees. If someone is lying on their resume, hiding a previous conviction or employee fraud incident, or otherwise untruthful, you don’t want them serving your customers anyway.

Reduce cash on premises

One easy way to help with theft is to simply reduce the amount of cash you keep on premises by using software like Kickfin. We help keep businesses safe by minimizing cash touchpoints, increasing visibility into tip payments and tracking, and eliminating the need for managers to make bank runs late at night — keeping your employees safe from theft, too.

Restaurant Menu Planning: Strategies and Tips to Optimize Your Menu

When diners first step into a restaurant, there’s a lot to take in: the decor, the layout, the guests and employees, the overall “vibe.”

But for 99.9 percent of restaurants, it’s the menu that really matters to your guests — and to the success of your business. Your menu doesn’t have to be fancy or even unique: Whether you’re offering quick-service burgers or fine dining at its finest, strategically planning out your menu is a critical factor when it comes to restaurant profitability. 

And even if your menu was thoughtfully planned: it’s wise to constantly evaluate what you’re offering, how it’s performing, and why it belongs there. Here’s what to think about when you’re planning (or revamping) your restaurant menu.

Menu planning overview

Menu planning starts with your restaurant concept. The best menus have a sense of creativity that feels true to a restaurant’s brand, whether that’s an homage to a childhood favorite dish or a masterpiece that took months and months of tinkering with flavors to create.

Planning your menu requires three steps:

  • List out all of your menu items, including descriptions of each item.
  • Categorize your items into different areas, like appetizers, entrees, or seafood.
  • Set prices for each item.

Sounds easy, right? Not so much.

Why is menu planning important?

The menu planning process is actually one of the most complex you’ll go through as a restaurant business, because it combines business analysis (profit margins and cost/benefit analysis) with creativity (what inspires you) and design (what it looks like on paper or on your website). That’s a lot!

But it’s one of the most important processes your restaurant undergoes, especially if you rotate your menus with the seasons and suppliers. Menu planning, done right, evokes a feeling, harnesses your back-of-house skills and creativity, and flows together so that every diner leaves your restaurant happy and satisfied — and you turn a profit.

5 factors to consider when planning a menu

As you build out your menu, keep in mind:

  • Length. Your menu should probably be smaller than you think! Unless you’re the Cheesecake Factory — known for their 21-page, 250-item coffee table-sized menu — you’ll want to come up with a short list of items that truly represent the best of what your kitchen has to offer. In fact, small menus are back in style — not just for fancy bistros but for well-known spots like Applebee’s, Red Robin, and iHOP, which have all downsized their menus in the last year.
  • Quality. Every kitchen has strengths and weaknesses. Acknowledge where your staff is at and what they do well…and what doesn’t always hit the mark. If timing is an issue for a particular dish, cut it. If your customers complain about your breadsticks, cut them. Focus on what you do spectacularly well, and that’s what you’ll become known for.
  • Costs. Prices have gone up, up, up this past year for everything from kale to cardboard boxes, shrinking already slim profit margins. Do the math for each menu item and cut the ones that don’t help you break even.
  • Delivery. With takeout and delivery a core part of any restaurant model today, consider how each menu item handles transit time. Maybe now isn’t the time to debut too many fried or saucy items that don’t hold up well. Consider how you’ll package each item, too.
  • Names and descriptions. You don’t order a double cheeseburger at McDonald’s — you order a Big Mac. While you don’t have to trademark every item you make, think about common mouthwatering descriptors to use for your menu items, like crispy, crunchy, fresh, hearty, smoky, or juicy. Keep your descriptions brief and specific so customers know exactly what they’re going to get when they order it.

How to develop a more profitable restaurant menu

The secret to a more profitable menu isn’t just about the food.

It’s about psychology. The average diner spends only 109 seconds looking at your menu. That mean they’re probably not reading it like a book; they’re skimming and scanning — often distracted by fellow guests, or servers coming and going — so you’ve got a short amount of time  to make an impact. Whether you’re using a physical menu or putting it all online using QR codes, the way you design and lay out the menu matters just as much as what’s on it. 

Here are a few steps to follow for a more profitable menu:

  1. As you evaluate your menu item ideas, create a grid with profitability on one axis and popularity on the other. Ideally, you want to maximize both profitability and popularity (the top right quadrant), as that’s where your big money-makers are that your customers love. Sort each item into the different quadrants, so you can identify your hits…and your duds. This is sometimes called menu engineering.
  2. Once you can see everything on one chart, you can start to take action. Cut anything that’s low in popularity and low in profitability, and then evaluate cost-saving opportunities for anything that’s popular but not very profitable. Your customers obviously love ordering that item, but can you make an ingredient swap that won’t impact the quality, but may help your margins? For anything that’s profitable but unpopular, consider a social media promotion, asking servers to talk it up at tables, or running a discount. Maybe your customers don’t know about it — or maybe your prices are a little too high.
  3. Think about how you’re putting your menu together to maximize your high profitability items. In vertically arranged menus, for example, the eye tends to gravitate toward the first and last items in a list, so any dishes in those spots will be big sellers. Another sweet spot? The upper right corner.
  4. Use visual cues like boxes, graphics, or typography to highlight big-ticket items and maximize space for your layout.
  5. As you work on your menu planning, test your menu designs and items and don’t discount customer feedback. If you have customers clamoring for a pastrami sandwich (or you’re known to have that as a “secret” item), offer it!
  6. Similarly, if you receive negative feedback on a specific menu item after more than one service, then you know you need to revisit it. Test out different menu designs, ask your customers what they think, and have fun with it — your menu is what makes you stand out!

Optimize your restaurant operations with digital tip payments

If you’re revamping your menu, it might be a good time to revamp your tip payment process, too. Digital tip payments cut your labor costs, eliminate bank runs, and reduce the risk of theft and error — all while helping you hire (and retain) more workers. See Kickfin’s digital tip payment platform in action! 

Hot Tips & Takes: Hospitality Coach Monte Silva Talks Work-Life Balance for Restaurant Owner-Operators

Monte Silva has spent 40 years in hospitality.

He’s done every job that exists in this industry: dishwasher, prep cook, line cook, busser, server, bartender, DJ, bouncer. But the majority of his career has revolved around restaurant management and operations.

He’s been a GM for Wolfgang Puck, and he’s also managed a $18.5 million revenue restaurant, where he oversaw a team of 13 salaried people and over 100 employees.

To say Monte is qualified to coach other restaurateurs is an understatement. And the ever-elusive, oft-forgotten concept of work-life balance is one of his favorite areas to focus on. Here’s what Monte has to say about living your life while successfully scaling your restaurant. (Yes, it’s possible.)

What’s your restaurant coaching philosophy?

It’s about mindset and habits. It takes 67 days to develop and keep new habits. But we tend to abandon behaviors before they become habits. And that’s the crux of why I started doing 90-day coaching.

The people who hire me are owners, often owner-couples. They run a restaurant, usually one to three locations. Maybe they’ve got kids. And ultimately they want to know: how do we grow our business and make sure we’re successful without having to be “in it” every day?

What does life look like for the typical restaurant owner “couple?”

Well, it’s busy. If they’ve got kids, there’s lots of daycare, after-school programs. Figuring out who’s picking up the kids and a million other logistics. Who’s handling chores and repairs and general maintenance at their house. Who’s going to be at the restaurant when.

It’s really, really tough for a married couple. They’re at the top of the line. It falls on them to share challenges with each other — they don’t want to take worries and complaints down to employees. They act like business associates, and a lot of times, they don’t know how to create a boundary between that relationship and their personal one.

"You can have success in this industry without sacrificing your whole life. You don’t have to choose."

What are the consequences of making your restaurant business the center of your universe? Of always being in “go mode”?

I had a client in LA; she and her husband had not taken a vacation in 7 years. Seven years! The wife had been in that restaurant every single day because she felt like no one cared as much as she did.

The mindset of a restaurant owner is full-throttle, full-sprint — constantly. And yes, there are times when more is required: New Year’s Eve, Mother’s Day. Sure, there are going to be longer hours.

But it doesn’t have to be that way all the time. You can have success in this industry without sacrificing your whole life. You don’t have to choose.

When a couple opens a restaurant, they usually want to create revenue streams. They want to work for themselves. And usually there’s a level of passion there. But the thing is: if you let it take over, this lifestyle will burn you out.

In our business, if you don’t figure out some kind of work-life balance, it inevitably leads to mental health issues and things like depression, divorce, drug abuse, suicide. It’s a huge risk to yourself, your family and your business if you don’t put systems in place that allow you to breathe.

What are prevailing myths or misconceptions about the restaurant business that you have to help your clients “unlearn?”

There’s a big myth about restaurants not being profitable. The average person doesn’t get into this business thinking they’ll be printing money. They come into it assuming margins will be low. But that’s wrong, and part of that problem is driven by an outdated operating model.

For example: Currently, everyone talks about your P&L and keeping your controllables between 60 to 65 percent, and your non-controllables around 10%. That’s the old model. So yeah, profitability of restaurants isn’t great when you compare it to other investment opportunities, but that’s because the P&L was set up a really long time ago.

Another big myth: You have to work 70 hours a week to be successful or to see major growth. Again, that’s no longer true.

And then there’s this myth that if you underpay people, you’ll have more profit.. That’s a big one — because you get what you pay for. Think of your people as an asset versus a liability. You get owner-operators with no experience, and they’re trying not to pay much, so they bring on unseasoned management, and it becomes a problem.

Ok. So if you’re looking for profitability and growth, but you don’t want to work 70 hours a week, where do you start?

Time management is so important. We tend to multi-task all the time, and that’s not always good. It leads to mistakes and jobs that are only halfway done.

Less multitasking, more focus. It’s little things — like if you’ve got people in a meeting, make sure they’re in the meeting. Not checking phones, working on their laptops. Everyone needs to be engaged, which ultimately saves time because things don’t have to be repeated and nothing gets missed.

Stop multitasking during business hours. Block off time to get work done before the doors open — because once that happens, your guests should be your only priority. You shouldn’t be in the office writing schedules, or holding counseling sessions, or placing your produce order — you should be fully engaged in execution on the floor.

When you’re trying to focus on a million things at once, the hospitality aspect of your business is going to suffer.

If you get the right people — people you really trust — then you give yourself a whole new level of freedom. You can work on growth and expansion. You can take care of your family. You can take a vacation.

That makes sense — but it’s also easier said than done, isn’t it? Given the fact that it’s so hard to hire and retain staff, it seems like owners have no choice but to take more on.

Everyone is talking about the worker shortage. But I haven’t had issues during Covid, and my clients haven’t had issues.

If you create a great culture, and you become the kind of boss you’d want to work for, you’ll be the employer of choice. People will gravitate toward you. And once you’ve got a few great employees — well, they say eagles fly with eagles. Tell your top employees, “I need another you,” and have them bring you more great employees. Then cut them a generous referral check if those new employees make it through their trial period.

That’s far better than signing bonuses. Instead of saying — “Hey, we’re going to pay new people, but not you,” you’re showing your current employees that you value them, and they become your ambassadors.

Or: instead of paying someone a signing bonus, pay them an extra dollar an hour instead. That’s going to take 90 days before you pay $500 extra. So if someone isn’t working out, you save money. And if they’re doing a great job, then they’re worth that extra dollar.

The idea is that if you get the right people — people you really trust — then you give yourself a whole new level of freedom. You can work on growth and expansion. You can take care of your family. You can take a vacation.

What do you tell your clients to look for when they’re hiring?

Again, you want to hire people who you can trust so that you don’t have to micromanage, you don’t have to babysit.

Talent and skillset are important. But not as important as mindset. Find an employee who really cares, who’s responsible, who is self-managing. You can teach them the skills later.

How do you hire for mindset?

I worked in a Nashville steakhouse. I had 250 applications for 25 spots. A 10 to 1 ratio. I put them in order of experience level. At the very top, the servers had around 15 years of serving experience in high-end establishments, and at the other end of the spectrum they had less experience at lower-end restaurants.

I interviewed them in that order — but the interview itself had nothing to do with experience or skillset. It was all about mindset. What was their family like? What do they like to do in their free time? It’s like a sports team: yes, you want the skillset, but you need to bring on players who can play together.

Sometimes I ended up hiring someone farther down the line just because of the interview. I hired one guy who volunteers with the blind. That’s a person who cares about people. Another server was the oldest of three kids, his mom was a single mom, he took on a lot of responsibility to provide for his family. That’s a dude you want on your team.

Another source of heartburn for owners is turnover — maybe you get the right people, but they move on. How do you combat that?

Restaurateurs tend to not proactively search for people, and that’s a mistake. Two servers give notice, suddenly you’re scrambling. You hire the first person who walks in.

I encourage my clients to always accept applications. Always be hiring. Are there applicants who can raise the bar? Are there toxic employees you can remove? And are there super employees who you can help advance in their career?

So what’s the big takeaway for restaurant folks who feel like they are drowning?

You don’t have to do it all to be profitable, or even to experience significant growth. You just need the right foundation and a team you can trust. Getting all of those pieces in place is an investment on the front end for sure, but it’s the key to work-life balance in this industry.

Want to learn more about optimizing your systems, product and people to achieve work/life balance in the restaurant industry? Contact Monte to learn more about his service offerings at hashtagrestaurateur@gmail.com

What Are Multi-Unit Franchises (And How to Do It Right)

It’s not unusual for a restaurant franchisee to start small. While investing in a franchise can be a smart move, it isn’t risk-free, and it generally requires a hefty investment of time and capital. Jumping straight into multi-unit franchise ownership doesn’t make sense for everyone, especially if you’re new to the restaurant franchising game.

Multi-unit franchising can be a fast-track to growth and success, but it comes with a few “ifs” — if you’ve got the operating experience; if you’re working with an established, proven brand; if you’ve got the resources to do it right. And keep in mind: Transitioning from one unit to two (or three, or 10) typically requires big changes to your management team and staff, your operations and processes, and your role as the franchise owner.

If you’re thinking about amplifying your success through multi-unit franchising, here’s everything you need to know.

What is a multi-unit franchise?

A multi-unit franchise model allows franchisees to operate more than one restaurant unit in a given territory.

A franchisee may own the right to operate multiple units of the same brand or operate restaurants for several different franchisors. Guillermo Perales, CEO of Dallas-based Sun Holdings, operates more than 1,000 stores, including 293 Burger Kings, 150 Popeyes, 94 Arby’s, and 18 Krispy Kremes.

Multi-unit doesn’t necessarily mean thousands of restaurants like Perales. Today, 54% of franchises are multi-unit operations, compared to single-unit owners (46%). Breaking that down further, 30% own between two restaurants and 30. Only 5.3% of owners make it past the 100-unit mark.

As long as a franchisee is running more than one store, they qualify as a multi-unit franchisee.

How does a multi-unit franchise work?

Multi-unit franchises scale up operations from one restaurant to two (or many). Typically, this means a multi-unit franchise owner steps into a business development or strategic role rather than a hands-on manager of each restaurant unit.

This also means the multi-unit franchise owner is responsible for developing and running each unit themselves. While they may visit each location to meet with staff or check on operations, more likely they hire an experienced management team to run each location or several locations at a time.

What are the benefits of being a multi-unit franchisee?

Multi-unit franchises exploded in popularity in recent years for restaurant owners — from 2010 to 2018, businesses saw a 23% increase in entry-level multi-unit operators. It’s no surprise why, once you consider the benefits:

  • More income. More locations mean access to more revenue streams, especially when expanding into multiple brands.
  • Lower operating costs. The more locations you open, the more you can leverage economies of scale, sharing back-end staff like accounting, marketing, and operations across multiple locations and decreasing your overhead.
  • Diversified income. Separate locations in a given territory allows you to diversify your income streams and spread risk across multiple investments. If there’s construction in front of one location that decreases traffic, for example, your other units can pick up the slack.
  • Relationship-building: Without franchisees, major restaurant chains wouldn’t function. The more locations you open, the stronger relationship you build with a brand — so everyone wins the more profitable you are.

What is a multi-unit franchise agreement?

Franchisees expand in two different ways: starting with one unit and opening more franchise locations over time or signing a multi-unit franchise agreement at the outset. The multi-unit franchise agreement details the rights and obligations of each party (in this case, the franchisor and the franchisee.)

When you sign a multi-unit franchise agreement, you determine:

  • How you will open additional units. Are you taking over existing locations or building new ones in your territory, and if so, where? This is part of your area development agreement, which determines guidelines for choosing new sites and franchisor approval.
  • The timeline for opening additional units. Most multi-unit franchise agreements outline a prescribed schedule for opening subsequent units, often on an annual basis. How long will you be managing these units, and at which points will you open new ones?
  • Your territory. Franchisors grant a specific geographic area for your business to operate in. Some grant more than one territory, if that’s what you’re looking for, but most franchisees operate in one area at a time.
    Intellectual property. This includes training, menus, branding colors, guidelines for marketing and other materials, and what rights franchisees have to make changes. In many QSR agreements, the franchisor retains all rights to recipes and menu items offered and changes are not allowed.
  • Profit, fees, and insurance: The revenue-sharing model you agree to, what fees the franchisee must pay each year to the franchisor for the right to operate, pricing for menu items, and of course, insurance and other costs of operating a business in partnership together.

Franchisors legally have to give you 14 days to review any multi-unit franchise agreement, so read through it carefully with your legal team before making a commitment.

Types of multi-unit franchise agreements

There are two kinds of multi-unit franchise agreements:

  • Area development agreements: The more common of the two, this gives franchisees the right to open a certain number of franchise units in your territory over time
  • Area representative agreements: This creates a sub-franchisor relationship, which allows the franchisee to open and operate locations but also sell those franchises to others within that territory.

With multi-unit franchises, it’s less about the day-to-day restaurant operations and more about your overall business strategy. As you consider how you plan to expand your restaurant business, think about how many units you want to acquire, which brands you want to partner with, and what types of agreements make the most sense for you.

Opening a multi-unit franchise?

Whether you have one unit or 50, restaurant franchisees can use instant tip payment technology to minimize the risk, hassle, and hidden costs of paying out cash tips. If you’re not already using Kickfin, get in touch with us today for a free demo!

Hot Tips & Takes: Fabio Viviani Hospitality Shares Secrets to Restaurant Manager Success

Meet Ken and Shane of Fabio Viviani Hospitality.

You’ve probably heard of Fabio Viviani — Top Chef winner, New York Times bestseller, restaurateur extraordinaire (oh, and Kickfin customer!). Since 2005, Fabio has launched dozens restaurants across the country through Fabio Viviani Hospitality.

FVH owes a good deal of its success to Ken McGarrie and Shane Farzad. Ken, who founded the consulting firm Korgen Hospitality, has launched dozens of restaurants — both alongside Fabio and on his own — and Shane serves as Head of Operations for FVH.

When it comes to restaurant management, Ken and Shane are about as knowledgeable as you can get. They’re experts on how to be a great manager, and how to manage a manager. (Ken actually wrote a whole book on it.) Whether you employ managers, or you’re a manager yourself — read on for actionable tips and insights you can put into practice right now.

OK, we all know recruiting is a complete nightmare these days — but hiring the wrong manager can be worse than having no manager at all. What are some of the mistakes that employers make when bringing on new managers or GMs?

Ken: One of the things that often gets overlooked is that managing a new venue is much different than stepping into a manager role at an existing venue. For a restaurant that’s about to launch, or that’s recently launched, you can expect the first six months to be complete chaos. You have to be willing to handle whatever gets thrown at you and to get creative.

Some people do really well in that environment. But if you’re the type of person who wants to have mis in place — you need all of the kinks worked out, operations down to a science — you’re probably not going to make a great opening staff member.

Shane: There’s also this temptation to pull your star server and turn them into a manager. But those are two entirely different roles.

Which isn’t to say a server can’t be an amazing manager. A lot of managers started out as servers (or hosts, bussers, etc.) and they do a great job. But it takes a different skill set, so your experience as a server isn’t always going to translate.

So part of it’s finding the right fit — but isn’t training just as important?

Shane: For sure. One restaurant group I was with gave me a solid four weeks of training. I spent a week in the corporate office, a week in the flagship restaurant…they even put me in the kitchen for a week. The meals that guests were ordering — I had cooked those myself. I understood everything that went into every process.

Of course, that kind of program is hard to execute, and it’s expensive. It’s just not feasible for every restaurant. What’s important to keep in mind is that in order to be effective, training doesn’t have to be intense. It just has to be focused.

How should the approach to training managers differ from training hourly workers? Is there some overlap?

Ken: Restaurants do a much better job of hiring and training hourly staff than management, by far. At the hourly level, it’s a lot more straightforward. With managers, it’s like: Hey, surprise! You find yourself counting drawers, running reports, tipping out. No one taught you how to manage and coach staff. A month ago you were a bartender — now you have all these brand-new manager responsibilities.

Shane: You can’t just assume that managers know how to do it all; you’ve got to take the time to align on the key responsibilities, train them up on processes, and communicate frequently.

And in addition to regular training, you can incorporate wine training, do field trips, hold weekly education and menu tastings that keep people engaged and connected — both managers and hourly workers.

Why do you think turnover is so high for restaurant managers?

Ken: We put them to the grind. We add on more paperwork than necessary. We ask for things constantly that take them off the floor. They’re running reports at 2 a.m. It’s psychological warfare — and especially with the lack of staff, they’re having to fill in gaps everywhere.

What happens is that managers who are stuck in this grind will find other restaurants with better systems, more automation, easier solutions. Or they’ll just completely burn our and move away from the industry altogether.

Shane: We’ve seen much more of a revolving door of the management team especially during Covid. They had all this downtime, and now they’re coming back to this job that just wears them down. They really feel it now. So they’re questioning their whole career after they had this luxury of time and flexibility.

Ken: It’s a bummer because these people move into management actually looking for longevity. If we, as owners and operators, aren’t giving them a vision for how they can better themselves and move up, then they’re just going to leave.

And at the same time, managers also need to be advocating for themselves.

Talk a little bit more about that. What’s your best piece of advice for managers who want to succeed but are feeling the burn out?

Ken: Figure out why you did it. You probably moved into a job where you’re making half as much money for twice as many hours — so be honest with yourself. What do you want out of it? Do you want to be a GM? Do you want to run your own restaurant? Do you want to move into other leadership roles?

Being a manager is essentially a bootcamp. It’s skill development, and it’s a test of your capabilities. You probably don’t want to be there forever — the idea is that you will ultimately move on to something else. What is that for you?

How can managers “move up” quickly, if that’s their end game?

Ken: If you’re waiting for someone to recognize your talent and move you up, it’s never going to happen. Your boss doesn’t have the bandwidth or the time to focus on that. So a big chapter in the book I wrote is about being your own PR agent. It’s really the only way it’s going to happen.

Look for ways to develop yourself professionally. Learn new skills. Be an entirely different kind of manager, and then lobby for the role you want. Be vocal about it. Flood their inbox. Find ways to get on their radar over and over again.

That really goes for anyone on a restaurant team. Case in point: We had a busser who was so exceptional. He was the perfect busser. And to be honest, we didn’t need or want to move him because he was so great in that particular position. But he really wanted to be a server. If he hadn’t been lobbying for himself, we never would have made that change. Now he’s a great server, and he’s happy as hell.

Bottom line: Be your own advocate. It may not come naturally at first, but if you want to succeed in this industry and really turn it into a career, that’s what you’ve got to do.

Want more manager insights? Check out Ken’s book, The Surprise Restaurant Manager, for easy-to-execute strategies and real-life examples that will lead up your management game!

Hot Tips & Takes: Fred LeFranc’s Advice For Surviving (and Thriving) During Supply Chain Disruptions

If you don’t know Fred LeFranc, you should.

A true restaurant industry veteran, Fred has spent his entire career in hospitality. He’s earned a reputation as a passionate advocate, a change agent, and a trusted advisor to countless executive leadership teams and CEOs across the country.

Fred co-founded Results Thru Strategy in 2006 and currently serves as managing partner. RTS works with clients to identify their competitive edge, evaluate their operations, and develop strategies that achieve consistent, meaningful growth. Recently, Fred also became CEO of Engleman’s Bakery, a wholesale bakery operation based in Atlanta.

He and his colleague Briana Brenson, Chaos Coordinator at RTS, sat down with Kickfin to discuss the current state of the supply chain — an ongoing Covid-era problem with no end in sight. Here’s their take on the situation and some tactical advice for restaurants struggling with supply chain headaches.

How did we arrive at this massive supply chain disruption?

As we all know, when Covid first hit, everything shut down. Production slowed or even ceased for some goods. (Remember the toilet paper shortage?)

But pretty soon, we started seeing this surge in demand when everything began to reopen. The supply chain simply couldn’t keep up — and it still can’t.

It’s happening across every industry. Things overseas are a mess. We’ve got gigantic ships, full of containers, just waiting offshore to be unloaded. Part of the problem is that even when there are people to work (the longshoremen are there) these two-week quarantines are sidelining a lot of the manpower.

Food and beverage has been hit hard. It’s having a huge impact on restaurants.  Even major players like Chipotle and Starbucks are saying they can’t get their product.

What are you telling RTS clients who are in the thick of this mess?

It’s a nightmare. Too much business, plus supply chain problems and a worker shortage — it’s truly a perfect storm.

Fortunately, it’s not going to last forever. And to help them make it through the storm, we’ve been repeating this mantra to restaurants: “Less is more. More with less.”

Unpack that for us. What do you mean by “less is more?”

Less is more is about adjusting the menu to items that have appeal, profit and ease of production.

Menu creep always happens. Menus get bloated because we’re afraid to take anything off. Even the slowest selling item is someone’s favorite. People complain when menus change.

But if you’re intelligent about it, less really is more. Moving toward a smaller menu is going to allow you to be more efficient.

As an example: most restaurants have four stations. During a pandemic with a supply chain problem and a worker shortage, maybe try to revamp your menu so that you can move to three or even two stations.

The mono-concepts that focus on one product are already benefiting from this. Think about it — you don’t get a chicken wing at In-N-Out. Those concepts make even more sense now. As much as you can focus on a single product or concept, that’s going to help you reduce variables on the supply chain side, and it’s going to help you make it through this tough period of time.

And what about “more with less?”

Do more with less. That is, do more with fewer people.

Automation and robotics are helping to fill in labor gaps for a lot of restaurants. We’re seeing an increase in the use of “co-bots” — for example, a robot starts the pizza, then humans add the final element.

QSR especially is changing the way they’re doing things. The days of cashiers in QSR are essentially gone. And there’s more automation in the kitchen — technology like Chowbotics is making that possible.

There’s also the phenomenon of delivery and drive-through, and it’s really driving change in the fast casual space. For example, it used to be that if you wanted Panera, you had to drive over there. Now, with third-party delivery, there’s this ripple effect. People just want the food, and they don’t care where it’s coming from or how it appears in their hands.

Shake Shake, IHOP, Cracker Barrel…you’ve got all of these brands reevaluating their physical space, and they’re experimenting with QSR, drive-thru, delivery.

We’re at a real inflection point in the industry. Covid is where the pivot started, but now that we’re on this path, we’re not going back.

So you’re saying that we’ll continue to see a trend away from dine-in, even post-Covid?

Demand for in-house dining is still high. And to be fair, independent restaurants were kicking the big chains’ butts before Covid when it came to dining-in. But now with the pandemic, the food you love can be brought straight to your home.

Which means if I decide to actually go to a restaurant, it has to be a truly great experience. That’s where the independents will always win, and the chains will struggle. But right now, the chains are the ones that have the resources to more easily survive the pandemic.

Everyone’s talking about the labor crisis. What’s your take? How can restaurants “win” at hiring right now?

If you’re hurting for staff, take a look at what other folks are doing. Sign-on bonuses, retention bonuses, tuition assistance, free iPhones. It depends on how bad your staffing problem is.

Personally, I think the hospitality employee is — in a way — getting revenge for years of being undervalued. And I 100% believe that people have a right to a living wage. But if you’re paying $15 an hour, you need to make sure the job they’re doing provides value and ultimately a good return. So here again, automation may make sense for certain types of service roles and functions. I also think we can figure out a way to balance out the economics — to charge a little more so that we can pay a little more, and create value for everyone.

I would stress that restaurants need to focus just as much on turnover as they do on hiring. Turnover is a hidden cost, but it’s a huge cost. And the churn rate in this industry is astronomical.

So we’ve got supply chain disasters, labor shortages, Covid surges…what’s your best advice for restaurants that are holding on for dear life?

Look, we’re more resilient than we thought we were. Yes, hospitality got hurt. The independents really got hurt. Some of them went out of business permanently.

But the good news is that if you’ve made it this far, there are things you can do right now to continue to stay afloat, and even achieve growth: Evaluate. Reduce. Maximize. More with less, less with more.

 

Interested in learning how Results Thru Strategy works with restaurant and hospitality concepts? Contact them here.

10 Ways to Increase Restaurant Sales in 2021

Even when we’re not in the midst of a pandemic, the restaurant business is one of the tougher ones. Competition is tight, and margins are too. Trends, technology and regulations are constantly changing. These days, it’s all a restaurant operator can do to keep things running smoothly and maintain status quo — much less increase restaurant sales. 

And for some restaurants, that’s just fine. But if your goal is growth: read on for 10 ways you can increase restaurant sales in 2021 and beyond.

1. Evaluate your technology

Hospitality innovation didn’t slow down in 2020; if anything, it picked up speed as everyone was forced to come up with creative solutions to keep diners and employees safe and satisfied. 

Many restaurants have tapped into tech that supports the major shift we’ve seen toward off-premise sales due to Covid. Think: online ordering, delivery, contactless payments, etc.

Assuming we return to (some semblance of) normalcy later in 2021: start thinking ahead as to how you’ll continue to leverage that new technology. Maybe you considered some of those investments interim solutions, but it’s likely that consumer expectations have changed for good. Patrons will continue to demand a more seamless and automated experience, whether they’re dining in or carrying out. 

And don’t forget about your employees — the backbone of your business. During the pandemic, prioritizing the health and financial security of your people has been imperative. That shouldn’t change, no matter what happens in 2021. Take advantage of tech that makes their experience better — e.g., team communication tools, scheduling platforms, and digital tipping software

2. Formalize your marketing plan (and your contingency plans, too)

Maybe you’ve never had a marketing plan before, or maybe you “waved the white flag” after getting blindsided by a pandemic and battling shutdowns throughout 2020. 

Repeat after us: the past is in the past. It’s a new year, which is a great time to put together a fresh marketing plan and budget that’s specifically designed to increase sales in your restaurant. 

While no one has a crystal ball, we’ve all got a much better idea of how Covid can impact our businesses, which makes it easier to put contingency marketing plans in place. That means if your city gets hit with another shutdown, you won’t have to hit the pause button on your efforts; instead, you’ll be prepared to change gears and pull the levers that will support your growth goals until things open back up.

Not sure where to start? Check out our post on building a marketing plan for your restaurant. As you’re mapping it out, think through how your messaging and channels might shift if circumstances change (again) due to Covid.

3. Strengthen your digital presence

Another by-product of 2020: your customers are more internet-savvy than ever before. If you don’t have a website yet, it’s time! You can set up your own (no coding skills required!) with a platform like Squarespace, or you can hire a freelancer or development team to create one for you. You’ll want to make it incredibly easy to find your menu, hours of operation, location, contact information for reservations or questions, etc.

Before you build all your functionality from scratch (like online ordering or payments), take a look at your existing technology; there may be out-of-the-box digital offerings or add-ons you can use to save time and money.

Of course, your website is just one piece of the digital puzzle. Evaluate your social media presence (particularly Facebook and Instagram) to showcase your food, location, and additional offerings, like take-out, delivery or catering. You’ll also want to use these platforms to share news and promotions. Photography is key: if you’re not great with your iPhone, find a team member who is. In fact, it’s a good idea to have a social media point-person who can lead the charge on sharing consistent, on-brand content with your digital audience.

4. Optimize your off-premise/delivery channel

If you currently offer delivery, make sure you’re making it as easy as possible for your customers to order, pay and have their food delivered to them. While third-party delivery apps are an option, fees are high, so it’s important to evaluate if this model is truly feasible for your business. Whatever direction you choose to go, make sure all of your processes — from customer service to staffing to food preparation — are as streamlined as possible to ensure a smooth, transparent experience for your patrons. (Not sure if you should use a third-party service or DIY? Download our free guide!)

5. Refine your recruiting processes 

Your people affect every aspect of your business: day-to-day operations, the customer experience, your company culture, and ultimately, your bottom line.

Even if you think things are hunky-dory with your team structure, take a look at:

  • Your org chart: Do you have the right people in the right places? Where do you foresee changes happening in 2021? When will you need extra support? Are there new roles you need to add to the team? (For example: maybe college-aged employees are planning to head back to campus when schools reopen, whenever that happens. Maybe tourist season won’t be quite as touristy this year, and you’ll need fewer hands. Maybe you’re ready to up your marketing game and you want to bring on someone to lead the charge.)
  • Your recruiting process: Once you have an idea of upcoming or potential needs, go ahead and optimize your recruiting processes. Identify and codify your ideal employee profile: what qualities does every person on your team need to have? What specific experience do you require for each role? It’s also important to consider how you’ll “sell” the job to candidates, especially in a tough labor market. Do you offer benefits? Is scheduling flexible? Do your employees get instant access to their earnings? Even small perks like free food are worth mentioning. (Check out our interview template for more tips!)

6. Reduce your turnover 

Once you’ve got the right people in place, how do you encourage them to stick around? Recruiting and training new candidates take time and ultimately cost you money, so it’s worth investing in the employee experience. 

Ultimately, that means making them feel cared for and respected, especially during a pretty intense time for hospitality workers. What can you do to keep them healthy and financially secure during a pandemic and the aftermath? Here are a few ideas:

  • Most importantly: keep the lines of communication open, so employees feel comfortable sharing any issues before they become major problems.
  • Be as flexible as possible when health or family/childcare needs arise.
  • Prioritize employee safety by enforcing sanitation procedures, social distancing regulations, etc. (that goes for customers, too!).
  • Give them financial security by providing instant access to tips and earnings.
  • If you’re in a position to do so, consider offering some level of benefits to your people
  • Help them stay in the know when it comes to government support for workers. 

7. Improve employee training

Excellent, ongoing employee training is an often-overlooked way to increase restaurant sales. Aside from keeping operations running smoothly and efficiently, having properly trained employees improves the customer experience and ensures your people are confident in their roles (which contributes to employee satisfaction and retention).

Set up a training program for each new employee type, and try to make it templated so you don’t have to reinvent the wheel every time. Consider investing a bit of your time to develop an employee handbook that covers things like:

  • General expectations and company values
  • Dress code
  • Technologies in place
  • Daily operations and workflows
  • Cleaning checklists
  • Safety protocols 
  • Beginning- and end-of-shift processes (e.g., clocking in and out)
  • Payment and tip-out policies

Training shouldn’t just be a one-time deal. Consider setting up monthly or quarterly team sessions focused on areas where your people may need a refresher, or where you can introduce new tools or policies. Solicit feedback on the training so you can continuously improve your training program.

8. Launch a loyalty program

This tactic might be part of your broader marketing plan, but we felt it was worth calling out. We know, we know — everyone’s sick of talking about how “unprecedented,” “challenging,” and “uncertain” these times are…but suffice it to say, there’s no shame in going after low-hanging fruit to increase restaurant sales.

So while a big chunk of your marketing efforts may seek to draw in new customers, don’t neglect the captive audience you’ve already got. Loyalty programs are a great way to incentive patrons to return to your establishment over and over again. Typically, loyalty programs are based on a points system that tracks how many times customers frequent your restaurant, rewarding them with discounts on food and merchandise, buy-one-get-one-free coupons, and even free appetizers and desserts. (Here’s a little inspiration to get your own loyalty program started.)

9. Freshen up your menu

Perform a menu audit to determine which items are working and which aren’t, and rotate in some new options. It’s a great opportunity to experiment with flavors and capitalize on food trends that could help your restaurant bring in a broader audience. 

It’s also a good opportunity to communicate with current and potential customers. Consider surveying your VIP patrons about their favorite (and least favorite items). If/when you make changes, make a splash about it. Share photos of your new dishes to share on social, invite local reporters, influencers or food writers to stop by, and promote everything through your tried-and-true channels.

10. Think through your pricing

Now may not be the time to jack up prices, but it’s never a bad idea to take a look at your margins, your clientele, your competitors, etc. and see if it makes sense to shift your pricing around.

You certainly don’t want to upset loyal customers or catch them off guard. But it may be possible to increase pricing on certain items enough to significantly impact your bottom line without significantly impacting your patrons. If you do make changes, ensure you’ve updated your menu everywhere — not just in your restaurant, but also wherever it exists online. Communicate price changes with your employees, and train them on how to respond to any questions or concerns from customers. 

(If pricing makes your head spin, here are a few basic calculations that can help!)

4 Things to Know About Hiring a Restaurant Consultant

When it comes to restaurant survival, the numbers are rather grim: 60 percent fail in their first year, and 80 percent don’t make it past the 5-year mark, according to FSR Magazine. (And of course, in 2020, Covid-19 isn’t doing anyone any favors.)

Those stats won’t come as a shock to most people in the restaurant business. Restaurateurs understand the odds aren’t necessarily in their favor, but they forge ahead because they’re passionate about their work, and often they’ve got the talent, experience and resources to make a go of it. 

But even the sagest restaurateur can benefit from the help of a restaurant or hospitality consultant. Whether you’re opening up a new restaurant or looking to revamp your current concept, restaurant consulting services can provide valuable insights and guidance that can help you stand out from the competition, delight your customers and avoid costly mistakes.

If you’re interested in engaging a restaurant consultant, here are four things to know about their services so you can decide whether it’s the right move for you. 

1. What does a restaurant consultant do?

A restaurant consultant is a professional advisor you can engage to help you run your establishment more smoothly and profitably. They may operate independently or as part of a firm. They may be hired to identify and address specific issues or challenges with your business. Or they can provide general guidance around your operations, employees, financials and more, with the goal of making your business achieve sustainable growth and success.

Restaurant consulting services may include any of the following: 

  • Brand and concept design 
  • Financial planning and accounting services
  • Menu development and pricing
  • Establishing efficiency in staff hiring and training
  • Location and property selection for your restaurant
  • Assistance with franchising

2. Who needs a restaurant consultant?

Restaurant newbies, veterans and everyone in between can find a restaurant consultant’s services useful. 

For those who are launching a new restaurant (especially owners who haven’t ever opened a restaurant before), a consultant can guide them through the necessary steps and processes to ensure their launch is as smooth as possible. That could include developing a concept, building out your brand, staffing, selecting technology, and more.

For restaurateurs who are currently running a restaurant, a consultant can help them pinpoint areas that can be optimized or to resolve problems that could be hurting their business. For example: some restaurateurs struggle with high turnover; a consultant could help them to evaluate hiring processes and workplace culture to ensure they’re attracting and retaining the best talent (and staying competitive with your peers). A consultant can also help you identify ways to automate operations, cut costs, run more effective marketing campaigns and more.

3. What can you expect when working with a restaurant consultant?

If you’re already operating an established restaurant, the first thing a restaurant consultant will do is spend time observing your restaurant’s daily operations, both in the front and back of the house. Other ways the restaurant consultant will get a feel of how you are currently running your establishment is by sampling your menu and interacting with your customers, hosts, servers, bartenders, and staff.

Then the consultant will offer suggestions, depending on your area of need, from changes to the menu, interior design, brand and concept, spending, kitchen operations, customer service, among other aspects of your business. You’ll work with the restaurant consultant to establish and implement a plan of action. That could mean making big shifts — like rebranding or moving/adding locations — or less drastic changes, like retraining staff, implementing new technology, cleaning up financials, etc. Depending on the structure of your engagement, a consultant may simply deliver recommendations and hand them off to your team, or they may execute on those recommendations and ensure they’re successful.

If you’re launching a new restaurant and you’re planning to use a consultant, it’s wise to bring them on early in the process — i.e., well before the grand opening, so you’ll have time to lean on their expertise and act on their advice. Expect your restaurant consultant to talk to you about the ideas you have for your business, brainstorm ways to implement them, establish a plan, and check in with you periodically while you work to open your establishment. Your consultant will most likely check in after you’ve opened to ensure everything is running smoothly. 

4. How much does a restaurant consultant cost?

How much a restaurant consultant costs depends on their fee scale. There are a few options you can typically choose from.

Hourly, daily, or monthly retainer

While it depends on experience and what region of the country you live in, restaurant consulting fees generally range from $250 to $1,000 a day, or $40 to $120 per hour, if done on-site.  You can always negotiate the option of a monthly retainer fee if that’s easier. 

Project- or goal-based 

Restaurant consultants can also charge per project, or according to the goal you want to accomplish. You can ask the restaurant consultant to include in the proposal the estimated amount of time it will take to complete the project, and the hourly rate to be charged. Then an option will be included stating that if the project goes beyond the estimated time, the restaurant consultant will be paid hourly or per day for the remainder of the project. 

Many times, out-of-pocket and travel expenses are billed separately and should be included in the proposal. 

Be efficient with your restaurant consultant’s time

Remember that you’re paying for your consultant’s time. Make sure you give as much information about your needs as you can from the beginning so you won’t waste time having to redo missed steps necessary to achieve your desired end result.