Restaurant operations management. 6 hacks to overcoming operational issues in restaurants
March 2, 2020 • 13 minutes
Restaurant leaders can be unsung heroes of the trade. Stress, chaos, and surprises are a normal part of your routine. ‘In the weeds’ is a common phrase we have. It’s when everything is happening all at once and you are too busy taking care of customers to even come up for air. During this time several things can go wrong that impact operations and customer experience. Yet each day you have to put on a smile, go in front of your customers, and make sure all is well.
We asked Dan Paulson, a famous business coach, to share lessons he learned when he worked as a VP of Operations for a restaurant chain. Those are the ways to make your restaurant management team’s day a little smoother.
Read on and follow Dan’s six critical hacks to operations management in the restaurant industry to make sure when your team is in the weeds it is running like a well-oiled machine.
Keep your head above the weeds
If you are a successful restaurant you are going to be busy. Remaining successful is how you handle peak times and surprise bumps in volume. Your customers can’t feel like things are out of control or that their needs aren’t being met. There are many actions you could take but leveraging those six top secrets to successful restaurant operations will help.
I learned those hacks when I was in charge of restaurant operations at a small restaurant chain. Some of them may not be a big surprise for you, but they worked for my team. What I want you to take away is in a restaurant execution is everything. Before you write off any of these I suggest you have a third party take a look to see if you are getting the results you expect.
1. Pay your people well
In an industry where margins are tight and labor cost directly impacts the bottom line, it may seem counterintuitive to increase wages. Here’s my argument why you should do it. Today’s labor market is at an all-time low. Front line jobs are harder to fill than ever before. Cost of training plus the time to do it directly impacts the customer experience. Higher wages can help you to reduce attrition and lower indirect costs.
I worked in a quick-serve restaurant chain that employed a high percentage of high school and college students. On top of that our business was seasonal and the bulk of sales came in the spring and summer months. Nevertheless, we were able to maintain a relatively low turnover rate compared to the rest of the industry. To reduce employee turnover we followed those three restaurant operations management principles and practices:
Paid above market rate.
Put together a robust training program.
Created a great work environment.
I consider all of these to be parts of the ‘pay’ structure. Money is one of the ways to entice people in. However, as part of the total compensation it quickly becomes an intangible thing. Further, people want purpose, they need to feel valued, and want to belong. Money may bring them in but it won't keep them. This is where most restaurateurs lose out which is why it becomes so difficult for them to retain good people in the team.
2. Keep it simple
Four-page menu? Ditch it. Poor layout in the kitchen or the drink station? Fix it. More is not always better. Complex menus lead to more questions from patrons and become difficult to navigate in your restaurant POS system. Poor layouts have your team tripping over each other to get orders out on time. Streamlining each area of your restaurant operations management increases efficiency and reduces costs.
For example, one of the first tasks I had to do for our restaurant chain was reducing food cost. When I joined the company the menu in our restaurants was too complex for a small chain. On top of that, there were a number of ingredients that were only used in a couple of items. So our first step towards a lower food cost was simplifying the menu. We made a research:
Analyzed the items to find what sold and what didn’t.
Spoke with customers to learn what dishes added to the experience.
Did industry research to determine what products fit our concept.
In a short time, it allowed us to significantly reduce food cost and simplify menu items while maintaining an adequate number of choices for our customers. Simplifying the menu allowed us to reduce the workspace and the number of people needed in the station and made it possible to change our layouts.
As the next step, we reviewed the layouts avoiding making structural changes to the building that might have a high cost. We reviewed product placement to simplify the range of motion. Combined our results reduced food cost by close to 5% and we probably found another 5% savings in production time. We also were able to reduce labor during peak serving times as well.
As an owner, you should review your procedures at least annually with spot checks quarterly. Menu items are also an opportunity Review sales regularly. 80/20 rules usually apply because 80% of your sales come from 20% of your items. To this day I cringe when I go into a restaurant and see large menus in the fine print. I can almost guarantee the food cost is too high with too much waste.
Doing time studies can also be very valuable for knowing how to manage restaurant day to day operations efficiently. Having employees make products while timing them and observing the range of motion can help you see opportunities for improvement. This is one of the most insightful operations management techniques in the restaurant industry.
Workstations need to have a linear flow as much as possible. In the quick-service atmosphere, I was able to get things down to the point where one cook could work a moderate to heavy rush alone. Only under heavy to extreme volumes did we need to increase staff here. Every situation is different which is why analysis is critical to overall success.
3. Routine matters
Many restaurants have basic routines set that belong to the best practices in restaurant operations. Opening procedures, mid-day, and closing. I find these are not reviewed often enough and as times change aren’t updated. Everything should have a system. Every system should be documented and followed with the precision of a military dress parade. Shortcuts lead to breakdowns in service and put employees’ and customers’ safety at risk. It compounds itself when real issues are slow to develop or procedures don’t impact daily operations that much.
Although our locations were some of the cleanest in the industry that doesn’t mean we didn’t have operational challenges in our restaurants. Some scheduled cleaning was not well documented and because of that employees missed some steps from time to time.
The best example I can relate to is the ice machine. Harmless enough, right? How often do you open the door and see what looks to be pristine ice in the bin? The machine is working fine so no problem and we weren’t cleaning it often enough. Approximately every three months you should do a thorough deep clean of your ice machine. In my opinion, this should be done more often with ice bins. If you don’t, a bacteria can build up which could make people sick. When it wasn’t part of the routine our employees forgot to clean it.
This is why procedures need to be well documented and linked to a calendar. Technology is wonderful because you can schedule less frequent procedures and set reminders. It is up to the leadership team to follow them and hold the staff accountable. Do not take shortcuts here! Never be too busy to do the right thing. Procedures, restaurant checklists, and schedules help streamline critical tasks that will either be missed or create more costly problems in the future.
4. Lead don’t manage
Nothing is worse than having your management team stuck in the weeds with your staff. They need to be free to observe workflow and be proactive. Your leaders can’t do that if they are not taught how to lead and communicate. Nor should they be treated as a glorified worker. Leadership is the difference between profits and going out of business.
Look, working in a restaurant can be stressful enough. Customer demands, the ebb and flow of business, and challenges of food prep already add to the stresses of work. The last thing any of your employees need is a manager who is yelling at them and making their life more difficult.
In our restaurants, our primary product was frozen custard. It was a choice for a customer to come in and buy a premium product that was not required as part of your daily nutritional intake. We were supposed to be a fun environment. Our management team was coached on simple things like communication, customer experience, and operations.
The behavior side was what we hired. We wanted fun, friendly, and energetic. It was tied to our core values. Our management team was supportive of the staff. We worked side by side. Even as a senior leader there were many times I rolled up my sleeves and worked on the production side. The goal was always to make our stressful environment as fun as possible.
Most hire managers for their background in the food service industry. In my opinion, that is a consideration but should not be a priority. I advise you to focus on individual behavior over technical skills. More important is how a leader will align with your core values and treat others. The rest could be taught. Therefore, knowing your values is critical. They are the anchors to your culture and produce the experience that is unique to you. It also makes it easier to coach others on their performance. Make sure you hire the right people and the rest will take care of itself.
5. Control the flow
Things can happen to you or because of you. One you are a victim, and the other you are in control. Restaurant owners and their teams should know how to handle conflict, communicate effectively, and be prepared to control interactions between coworkers and customers.
Victim mentality is common. We didn’t expect that rush. The delivery showed up at the wrong time. That customer was rude… You should admit that you are the only one that can control your own actions to your environment. At our restaurants, we routinely held meetings to get people focused. Daily huddles for each shift were mandatory and logbooks with valuable information were accessible to all.
The most important thing is to condition everyone to be prepared for everything. Treat every day like it is going to be your busiest, and have a contingency plan if it is not. Most breakdowns happen as a result of poor communication. As a leader, it is up to you to make sure information flows freely. Technology can help with this. Internal web pages, text messaging, and group chats are all tools that can be used to help manage information.
6. Safety is number one
What is most important in restaurant operations? Following safety standards. This seems like a no-brainer and yet it amazes me how often this is neglected. When you are swamped it’s natural to look for shortcuts. However, shortcuts lead to injuries or food contamination. Neither of which will help you manage your already tight bottom line. Have clear safety protocols and follow your HACCP guidelines.
Recently a restaurant in Milwaukee, Wisconsin, voluntarily closed for a couple of days when it was found they had a bug problem. It appears the bugs came in through one of their suppliers, but it was also due to not following guidelines close enough. Had they followed the proper protocols they may have avoided the problem in the first place. Could your business afford to be shut down for a couple of days? What about the negative public impact it would make on a future business?
Food safety is only one aspect to be concerned about. As I mentioned earlier, there are a number of less frequent protocols that need to be followed to avoid food safety problems and I will not bore you with them here. Instead, I’ll just emphasise that you should follow other safety guidelines as well.
We are often working in wet, greasy, slippery areas while moving at a fast pace. Slips and falls are another big issue that you should be concerned about. What procedures do you have in place to minimize accidents? Cleaning materials need to be close at hand but secure. Chemicals should be in special spots away from food. Employees must wear the correct shoes. All these can help you prevent lost time, incidents, or lawsuits.
Maybe these hacks seem like common sense to you. When learning how to improve restaurant operations, remember the law of nature is to take the shortest, easiest path to our goal. Sometimes this works. Other times shortcuts turn into bigger issues that can have lasting effects on sales and profits. The key to all this is spending time working ON the business not IN the business. Doing so will help you grow your operation into a thriving, profitable place your customers and employees will want to be!