Operating a Restaurant: How to Tackle the Challenges Effectively


By James D. Roumeliotis

Restauarant Operations Image

Whether you are considering starting or purchasing an existing restaurant or a turn-key national banner version known as a franchise, regardless whether a fast food, casual dining or fine dining, food service is a brutal business to get involved with which also requires long hours at the helm. There are many variables to contend with, let alone the primary one…staffing. What will make the operation additionally challenging is the lack of food service and/or hospitality experience. The food service business is quite competitive as you have to attract customers to dine and enjoy at your place more than they do in others restaurants so as to retain them.

From concept to reality and beyond

First and foremost, no one should consider embarking in the food service business, unless the person is a passionate about the business and a foodie. Once immersed, what is the business’s raison d’etre…its mission? The number one goal shouldn’t be profit. There are various types of restaurant concepts to consider. These include: 

  • Fast food;
  • Fast casual dining such as a café and a pub or a family style dining;
  • An upscale dining establishment;
  • Food trucks;
  • Open diverse portfolio of restaurants and/or bars in several strategic partnerships with hotels/resorts including event spaces.

Launching a restaurant methodically is crucial if it’s to succeed and survive in the long run. A study by Cornell University estimates that 60% of restaurants are closed in the first year.

One important factor is choosing the location wisely. This plays a pivotal role in your restaurant’s traffic and revenue achievements. An easily accessible area that is visible to the customers helps draw in customers with less effort. However, it begins with proper market research prior to finalizing the choice of location. The location should not only rely on the local community for diners. It should become a destination. That will be accomplished more by excellent reviews and word-of-mouth, with great food and commitment to service.

Operating a restaurant is difficult physically and emotionally, but especially in the beginning. It is also financially challenging. In a start-up, a good chunk of capital goes most into leasehold improvements, as well as equipment and furnishing. On-going expenses incurred include various fixed (rent, staff salary) and variable costs such as utilities, food ingredients, beverages, supplies and much more. Watching yields and food costs optimize margins to reduce these costs, though, without compromising on the quality of the food service offered. Strict fiscal discipline should be practiced and staff well trained to assist in this all important endeavor. Along with food cost, payroll costs should be carefully scrutinized with timely adjustments in staffing made taking into consideration the days and times of traffic patterns (peak and non-peak hours) but without compromising service. It’s a delicate balance to deal with. With inventory, a list of fast and slow moving food items should be well noted so as not to overstock any rarely used ingredients and other stocked items. Supplier payment terms or COD, with attractive discounts, should be taken into account for additional savings.

Expectations should be clearly communicated, following through and being organized are additional restaurant secrets to success. In addition, having systems in place for everything and continually enforcing them. Most importantly, adequate cash flow, the lifeblood of any business.

Management/Ownership and Staffing: Culture and value

A multi-talented ownership is imperative. If, for example, there are solely two partners, one should complement the other with one looking after the kitchen, while the other works in the dining room, acting as the Maître D and making certain food is properly and timely served. If there is no partner with much kitchen experience, one ought to be hired, paid well (perhaps offer some shares for loyalty). The menu should be creative and frequently updated.

Regardless if the food, decor and seating arrangement are impressive, it’s the staff that complete the entire dining experience. Hire for attitude and train for additional skills necessary to make a positive impact on the customers and colleagues alike. Front-line staff, must be courteous and dressed, as well as look impressive. Moreover, proper onboarding and frequent training of staff is a worthwhile investment. This should include a clear list of duties and instructions for each activity, educating staff to make the guests feel welcome through a polite behavior, neat dressing, and to know how to handle minor customer complaints, such as a soiled napkin or dirty glass, without always seeking management intervention.

Management should intervene when a customer is not happy with his or her dining experience. Displeasure may have been made on the spot, through a feedback form, or a negative review posted on social media. In those instances, addressing the issue(s) promptly can be done by actually speaking with the customer and getting to the bottom of his or her grievance(s) including apologizing and rectifying the missteps immediately. Compensation may include waiving off the bill, offering a free meal on the next visit, and/or sending a bouquet of roses or a box of chocolates.

Embracing Technology and Social Media

At this day and age, food service owners/managers should integrate their restaurant with technology if to remain on the top and run a successful operation. Expected by many clientele, this includes online reservations, available and complimentary Wi-Fi, and online/mobile ordering and payment or at least accepting orders via food delivery app services such as Uber Eats and Grubhub.

Today, every restaurant and bar should possess and fully utilize a POS (Restaurant Management System). It’s the hub of the business as it handles orders, tracks payments and cash flow, manages inventory, and provides robust reporting to assist in making decisions for front and back of house (i.e. kitchen). The POS is packed with data such as sales metrics, reports on the hours your staff have worked, and inventory counts. Knowing how to interpret this POS data, along with the powerful insights within it, can help make better, more informed business decisions for the restaurant. Furthermore, the system can and should integrated with accounting software, such as Quickbooks, a merchant payment system like Chase, and reservations systems such as OpenTable to name a few.

Along with a memorable name and attractive logo, a strong social media presence is more important than ever before. Prospective and existing guests use it before they decide where to dine as they want to see the food and much more before.  The look and ambiance of the restaurant should be “Instagrammable,” whether it’s a piece of decor or a place setting. It should catch the eye and look interesting.

Restaurants Highest Costs

In the final analysis

Be your own best critic. Never take anything for granted. Just step into the shoes of customers. Due to possible bias, invite mystery customers to do incognito visits and have a trusting third party do occasional audits of your books. You never know what may be uncovered.

To operate a business successfully, strategic and methodical steps should be in place. Rather than view and approach it merely as a family business, the food establishment should be run professionally like a lean corporate business entity.

A good and busy location, preferably with available parking should be well thought-out, as should well trained staff with a pleasant attitude and dress code. A talented chef and a creative menu will undoubtedly satisfy diners’ taste buds.

Finally, cash flow is king. Without it, financial issues can arise affecting the overall business achievements, but most importantly, its survival.

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Filed under 1, Business, business management, crisis management, decision making management, management, restaurant challenges, restaurant management, restaurant operations

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