Is Your Restaurant in Trouble?
By Nancy Caldarola
Reality TV has been bringing the stories of troubled restaurants into our living rooms for several years.Â As professionals in this industry, have we learned anything from watching the misfortunes of our brethren? Have we seen ourselves in these shows? And is your operation a candidate for rescue?
We all have to admit, restaurants have good days and not-so-good days. We thrive on the good days when business is constant, when the kitchen hums like a well-oiled machine, when the staff is efficient and effective, and every guest leaves both sated and glowing with praise for their experience. Still, there are those days when things are not as smooth and effective as we would like. Hopefully, you have many more good days for your team and your location than those â€˜can we just forget this all happenedâ€™ days.
The restaurants we see on television reality shows have hit bottom and need to be rescued to stay viable. However, your restaurant doesn’t have to be in trouble. You can be your own rescue team by stepping outside your management role and adopting a different viewpoint â€” examine your operations continuously to see how you can improve.
The reasons that often cause restaurant problems can be divided into four main groups: People, Product, Facilities, and Controls. Itâ€™s important to understand how each of these groups impacts the restaurant. But first, letâ€™s start with one problem thatâ€™s not in any of the four groups.
Mixed Message to Customers. We are all products of our experiences and backgrounds. When most guests think of a BBQ-themed restaurant, they do not envision an upscale location with subdued lighting and classical music, nor would they expect haute cuisine in a western-style chuckwagon setting. We must be sure that when a guest enters the restaurant, the first sights, smells and sounds are a match to our name and offerings. The mixed message confuses, while tired and dated restaurants drag down sales opportunities.
Revisit your business plan and original theme for your operation. Does it match where you are today? Have changes in look and menu moved you from a focused approach to a muddled management headache? The messages we send to guests must connect the look and feel of the physical facility to the menu offerings and the service received to generate guest satisfaction and loyalty.
Now, on to the other reasons that can cause problems for restaurants.
Disconnected Servers, Bartenders and Kitchen Crew. Hiring the right people is key to the success of a restaurant. The owners cannot do it alone, and putting the right people into various positions must be a top priority. Cardinal rule #1: All employees must want to be in the hospitality business. Management should have frequent discussions with employees about what hospitality means in your restaurant â€” your style of hospitality and how the front of house team should display it.
Watch and evaluate employees on the job. Do performance appraisals at 30 and 90 days for new hires, then at 6- to 12-month intervals. People like to know how they are doing on the job, so use a formal process to let them know.
If there are disconnected employees in any role in your operation, they are dragging down the rest of the teamâ€™s morale, efficiency and productivity. You need to remove the cause of discontent. Good hiring practices are essential to the development of a winning team. Interview carefully and select the best candidates to enhance your service and kitchen crew.
Menus for the Masses. If guests are presented with a menu as thick as a textbook, you are trying to please everyone and it may not be working. Large and varied menus require too many inventory items in stock, too much money tied up in inventory, too many items for the kitchen to consistently and correctly prepare and serve, and a muddled theme for the operation. Large menus tend to happen over the years when new offerings are added but nothing gets taken off the existing menu.The result is like a Russian novel with many possible endings and none in sight.
It is important to analyze sales and determine the biggest-selling menu items currently offered. A sales analysis provides information about how many of each menu offering were sold and what day and time they were sold. This list is often printed from the POS system and should be a standard management tool. Drop all slow and low selling items. If it isnâ€™t 4-6 percent of sales, dump it. It costs more to prepare and serve than you are making in profit.
Try to offer items that allow maximum usage of a key ingredient, like the same 3.5-ounce chicken breast made several ways to have both a standard menu item and daily specials. Then, only one size breast is purchased and inventoried.
Unattractive or Dated Dining Rooms. Donâ€™t be fooled, guests see all the flaws and dirt when they visit your restaurant.
Look critically at your dining room from the guestsâ€™ viewpoint â€” are there simple fixes that can be done to refocus the theme and feel of the location? Can a simple fix, such as a good house cleaning and a coat of paint, brighten the look of the restaurant? Will removing dated dÃ©cor and window treatments simplify the look and add needed light? How about the floors â€” when was the last time the rugs were steam-cleaned, repaired or replaced?
Donâ€™t forget chairs and tables; they also need regular cleaning and a coat of paint or varnish. No one likes to sit on a torn banquette seat cover or at a table with chipped Formica edges. Get the restaurant in shape with ongoing maintenance and repairs (M&R), and be sure there is a line item and accruals on the income statement (P&L) to cover these expenses. All restaurants must plan on M&R for the entire restaurant facility â€“ exterior, dining room, kitchen and restrooms.
Restrooms that Scare Guests Away. We can all think of a time when we entered the restroom of a facility, saw the condition of the room, and had to decide to stay or to leave. Do guests do that when they enter your restrooms? Will they let their children use the restroom? There is a direct connection between what a guest thinks about the restrooms and what they then assume about the kitchen and the rest of the facility. So if restrooms are an afterthought, your facility is in trouble with your guests.
Is the room well-lit and safe? Are stalls in good repair and do door slide locks actually work? Is there hot and cold running water? Is the trash container covered and large enough to hold used towels or other trash? Is there graffiti or other marks on the walls and stall sections?
Kitchens That are Just Scary! Cleanliness is essential in the food business. All kitchens and the people who work in them must be clean and work with this mentality. Employees must understand the food code rules and use these as their work practices not as exceptions. Management must measure what is expected and should audit operations manuals and observe kitchen behaviors to ensure that there is compliance.
Are employees wearing clean uniforms and practicing good personal hygiene? Do employees prevent cross-contamination when handling raw and cooked foods? Are cooks properly cooking, cooling, serving and storing foods? Does the kitchen staff understand the Temperature Danger Zone and their role in preventing foodborne illnesses?
When is equipment turned on in the morning â€” are you wasting energy? Does the dish machine reach the correct temperature? Are the hand-washing sinks stocked and functional? Do employees wash hands frequently? Are all clean pots and utensils stored correctly? Are foods on the correct shelves in the walk-in cooler so there is no contamination?
What We Fail to Measure Will Hurt Us. Many restaurant owners depend on their bookkeepers or accountants to tell them if they are making money. This is bad practice and can result in disaster. All business owners must know how to create, read and apply an income statement or Profit and Loss statement for the operation. If you depend upon being told where you stand fiscally by another person, you are at risk. You need to have a clear financial picture of your operation and how it is performing in relation to your business plan. Is food cost within targets? Is hourly labor in line? Are all taxes, marketing, maintenance and other fees and expenses within budget? What are sales per hour? Bar sales per bartender? What are sales per square foot or any other measures you have established?
Restaurant owners and managers find many excuses to explain away not taking inventory on a regular basis. Inventory is the basis of food cost control management, and not completing at least a monthly inventory can adversely affect food costs.
Food cost is the first area that is investigated when there are financial problems with a restaurant; we should not be immediately trying to cut labor costs. Inventory controls will help cut waste, thefts and spoilage. Inventory is tied to the menu, so good menu management should affect and help ensure good inventory management.
Another area where there is a lack of measurement is in recording employee meals. Are these meals accounted for in food cost? They should be. If you give discounted meals to employees, then these are recorded in sales with the discount part applied to the food cost. This process is the only way to ensure correct accounting for all food-related activities in the restaurant.
The List Goes Onâ€¦
Although our list or reasons for restaurant problems can continue, the items mentioned above can get management started in self-rescue efforts. We are all continually challenged to operate excellent eateries, and the good days should outnumber the not-so-good ones. By classifying issues in the four categories, you start to systemize your efforts to regain control and solve problems. And remember to use your resources in the NRA and GRA to assist you.
Itâ€™s been said that guest complaints are gifts to management, and that problems are merely opportunities for improving the way things are being done. By realistically and systematically approaching your restaurant problems, you can turn your current realty into a smoothly operating dining experience.
Nancy Caldarola, PhD, RD, is aÂ consultant to the hospitality industry. Her group, Concept AssociatesÂ Inc., offers operations improvement projects, training programs, food safety training and audits, menu engineering andÂ nutritional analysis, and profitability improvement consulting.