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80/20 vs. 4: Restaurant Marketing By The Numbers

Money on PlateThe Pareto Principle has long been hailed as the Holy Grail of marketing, the one rule by which all marketing efforts succeed or fail.  The principle itself is pretty simple: 20% of your customers drive 80% of your sales.  There’s always a core group of loyal customers who not only spend money in your restaurant, they bring their friends, give glowing reviews at dinner parties, and otherwise provide a vital linchpin in your money making machine.

Figuring out who those 20% are can be a full time job, and the logic has long held that if you find them, and target them effectively, you’ll be well on your way.  But as the Information Age has matured, so has the wealth of tools available to marketers, and therefore the size of the groups you can target has gotten much smaller.  Some marketers have even begun to parse groups of customers down to what some are calling the 4% factor, or specific offers that have a high conversion rate among 4% of your customers.

So how does this apply to restaurants?  Well, for starters, restaurants are a business, just like any other.  And as a business, restaurants have products that need to be sold to the right customer.  Every day your restaurant has the opportunity to learn more about your customers: how often they come in, how much they spend, what they order, etc.

The more you know, the better you can target your promotions and marketing.  Too often restaurants take a shotgun approach to their marketing campaigns – blanket advertising in local media outlets and generalized coupons (20% off your order, etc.).  That strategy used to be enough.  But as more restaurants compete for the same customers, aging marketing approaches are simply not going to work anymore.

Here are some tips to bring your restaurant marketing strategy into the 21st century:

Know thy customer.  You’ve probably heard this one before, but it has never been more true.  The main difference is that you have many more ways to get to know your customer today that simply didn’t exist before.  For restaurants specifically, consider some strategies to learn more about your customers:

  • Hold a raffle/door prize event.  Customers who enter must fill out a card with their email address, favorite menu item, really anything you want to know about them
  • Use an email marketing campaign to engage customers and collect information about them
  • Conduct surveys, either electronically or on paper in your restaurant
  • Use coupons to learn more about your customers – if you can collect an email when a customer redeems a coupon for a specific menu item, then you can use that information to target them for specific types of future promotions

Leverage thy knowledge.  Now that you’ve put some effort into collecting information about your customers, you need to leverage that information to your advantage.  Use the 4% factor to separate customers into specific groups with particular tastes.  Then hit those groups with specially tailored promotions made just for them.  The goal is to get your response rate (i.e. conversion rate) through the roof.

Engage thy followers.  Targeting small groups of loyal customers should generate an enthusiastic response.  And when customers respond, you should be poised to engage them and solidify your rightful place as one of their favorite brands.  The tools you have available to you today make customer engagement even easier.  Experiment with different avenues until you find the social media that works for you.

Gauge and repeat.  The idea is that these small groups you find through your marketing campaign will respond at much higher rates than a traditional (and usually more expensive) marketing campaign.  You’ll only know for sure if you gauge response.  Use coupon codes and other ways to measure who’s biting on what, and then modify and improve your campaign until you have it honed down to a high performance machine.

The good news is that running a 4% campaign will probably be much cheaper than a traditional shotgun blitz.  The bad news is that it takes some significant time investments and more than a little trial and error.  For those willing to put the time in however, the gains can be huge.

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Restaurant Equipment: 4 Factors For Calculating Total Cost Of Ownership

There’s always a significant amount of cost involved whenever you buy a new piece of restaurant equipment.  Those costs only continue as that equipment ages in your restaurant – from energy use to repairs, the consequences of new equipment will be around for a long time after you’ve written the check to purchase.

Of course, restaurant equipment makes you money as well.  Without that fryer or reach-in refrigerator or griddle, you wouldn’t be able to prepare your product for your customers.  But understanding the total cost of a piece of equipment over its lifespan has been ignored all too often in the food service industry for years.

Many chains have started doing a Total Cost Of Ownership analysis for equipment because they buy large numbers of the same type of equipment all at once.  A faulty or inefficient piece of equipment can mean thousands of dollars in extra expenses for the chain over the lifespan of the piece, and conducting a cost analysis beforehand helps avoid problems down the road.

By and large, most independent operators do not undertake the complicated task of calculating total cost – usually because the information or the know-how necessary to make an accurate calculation isn’t available.

That doesn’t mean independents and smaller chains can’t benefit from a cost analysis before they buy new restaurant equipment.  Here’s a quick guide to help you get started on your own cost analysis before you buy your next piece of equipment.
Calculate Ice Machine Capacity
Capacity. The larger the piece of equipment, the more volume it can handle.  The trade-off here is that larger equipment also uses more energy, which means higher operating expenses.  That’s fine if you’re using that capacity to generate revenue, but one of the biggest traps smaller operations fall into is buying too much capacity or not enough capacity.

Let’s use an ice machine as an example.  A large air cooled ice machine with a 1,000 pound ice bin will use a significant amount of energy every day, translating into hundreds of dollars of electricity expenses every month.  That’s perfectly fine if you’re coming close to emptying that bin every day to keep your bar stocked and your kitchen well supplies with ice.  But if you’re barely putting a dent in that ice, even during your busiest periods, then you’ve got a two-fold problem: first, you’re paying to make ice you don’t use, and second, you’re adding labor costs to your budget because now you’ve got to clean all that unused ice out of the bin regularly to prevent the buildup of bacteria and other pathogens.

On the other hand, if your ice machine is too small, you risk shortening its lifespan because the unit never gets a break as it tries to keep pace with demand, not to mention the inconvenience to your staff and your customers that comes with an ice shortage.

In general, you want to size new equipment capacity based upon your best estimate of growth over the course of the unit’s life.  A good ice machine should last about 10 years.  Hopefully in 10 years your business has expanded and needs more ice.  That means you need to buy more ice capacity initially to accommodate future growth.
Of course, that means more energy expenses at first as you ramp up to full capacity, but down the road, one ice machine is more efficient than two.

Energy Efficiency. Unfortunately, energy usage information is very hard to come by when it comes to food service equipment.  The government run program Energy Star has begun to rate more and more restaurant equipment, so before you buy, check there to see if you can get some energy usage information.Energy Star For Food Service Equipment

Energy use is a big one when calculating the total cost of a new piece of equipment.  Most equipment in your kitchen uses a lot of energy, so even the smallest differences in usage can translate into thousands of dollars in savings over the lifespan of the piece.

Try to collect energy use information from the different manufacturers as you’re shopping for a new piece of equipment.  Often more efficient units have a higher initial price because more efficient components are usually also more expensive.  However, paying 10% – 20% more for a unit that’s 30% more efficient means you’ll still be saving thousands of dollars over the entire lifespan of the unit.

It’s common practice in the food service industry to shop aggressively for the lowest price point.  While there’s absolutely nothing wrong with bargain hunting, an unintended consequence of this has been that many new units still employ older component technology that keeps the price low, even though those components can be significantly less efficient.

Keep in mind that sometimes, spending a little more up front can actually save you a lot of money down the road.

Stay tuned tomorrow as I explore two more areas where calculating the total cost of your restaurant equipment is important.  Click here to read the second installment of this article.

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Increasing Restaurant Profits

profitable restaurant1. Reduce Food Costs With A Descending Dollar Report

A Descending Dollar Report is a fancy way of saying “Find the 10 food items you spend the most money on every month.”  Once you know what those 10 items are, start looking for ways to cut your costs on each one.

Talk to your distributors and see if you can find a similar or even better product that’s less expensive.  Also don’t be afraid to pursue other distributors to find ones that are willing to bring you quality product at a better price.

If you have the capacity to store items in bulk, do so at every opportunity.  If you don’t, seriously consider investing in bulk storage so you can take advantage of available discounts.

Employ a detailed inventory system so you can make as many bulk purchases as possible while avoiding spoilage.  No matter what, use your buying power to find the best deal possible.  More than likely, food is one of your business’ biggest expenses, and saving even a few cents per pound you buy can translate into significant savings.

2. Train Employees to Make You Money

Your employees are your biggest expense.  They should also be your biggest asset.  Let’s face it: your staff is the face and the soul of your restaurant or commercial kitchen.  That’s why it’s important to give them the tools they need to make them your biggest money maker.  The key to accomplishing this is good training.  Set down standard training procedures for all new employees and carry out regular ongoing training for existing employees.

Follow up this training with regular performance reviews.  However, be careful to avoid making a performance review a litany of problems with the employee that need to be addressed.  Rather, turn a review into a conversation that empowers your staff to offer suggestions on how to improve your business.  More often than not, performance problems stem from training and management problems than employees themselves.  If an waiteremployee is truly underperforming, set clear parameters for your expectations of improvement, and don’t be afraid to terminate if those goals are not met.

Take employee suggestions and cycle back through your training and operations guidelines.  Modify and improve them so that problems are addressed.  The most effective training is an ongoing process that corrects past mistakes and always strives to be better.

So why does this increase your profits?  Because well trained employees result in happy customers who tend to spend more than the ticket average.  Well trained servers and bartenders know how to upsell menu items or well drinks.  Hosts double as bussers during busy shifts to make sure tables can be turned quickly.  Head waiters double as hosts to make sure customers get seated.  And so on.

Cross-training is another important element of this equation, as the examples above indicate.  The larger the variety of tasks each of your employees can perform in your restaurant, the more flexible and capable your staff will be.

Finally, set the example of a model employee yourself.  If the head waiter sees you bussing a table, she will realize she’s not above that task either.  Maintain a fun, positive work environment that rewards hard work and honestly confronts problems.  And instill a culture of “customer first” so that every guest walks away happy.

3. Use Incentives to Make Employees Stay Longer and Work Harder

Now that you’ve spent all that time training employees to maximize your profits, it’s time to focus on employee retention.  The longer employees work for you, the more efficient they become, which means more profits for you, so use some incentives to keep staff happy and motivated to come to work every day.

There are many ways to incentivize employees to work harder and reward high performance.  Here are a few ideas:

  • Track sales for bar and wait staff and reward top monthly sellers with a bonus
  • Set ticket time goals for kitchen staff and reward them when they meet those goals for an entire shift
  • Share a percentage of profits with tenured employees
  • Implement a rewards program for employees who go above and beyond the call of duty

No matter how you decide to incentivize employees, the goal is always to reduce hiring and training costs and maximize employee performance and efficiency.  In the long run, this is going to translate into more profits for you and your business.

4. Do-It-Yourself Equipment Repairs

Restaurant equipment is the vital cog in the wheel of any business in the food service industry.  You rely on everything from refrigerators to gas ranges to bar blenders to floor mixers to prepare and serve your product every day.  When a piece of restaurant equipment goes down, more than likely your bottom line is going to be affected, not only in repair costs but in lost revenue as equipment parts

Too often restaurateurs turn to a service company for equipment repairs, resulting in expensive labor and parts costs.  Instead, take the time to educate yourself about the most common types of equipment failures and how to fix them.  Often a simple and inexpensive part can get your restaurant equipment up and running again quickly.

Several companies offer large inventories of replacement parts for all the major food service manufacturers, meaning you can order the parts you need and perform the repair yourself with minimal downtime and even less expense.

5. Leverage Technology to Minimize Waste and Mistakes

POS (Point of Sale) and inventory software have become powerful management tools for your business in recent years.  With a POS system, you can:

  • Track inventory and set reordering schedules
  • Manage employee hours and manage payroll
  • Track sales and indentify trends, like best selling items, high margin items, and underselling dogs
  • Reduce waste from spoilage and ordering mistakes
  • Reduce shrinkage from unauthorized employee comps
  • Increase table turnover rates
  • Increase staff efficiency

More than likely your restaurant already uses a POS system to manage inventory and sales.  However, it’s also likely that you are not getting the most out of that technology.  Most vendors have training guides designed to educate you on system features, so take the time and become an expert.  Utilize your POS vendor’s website and customer support to get new updates for your POS system.  Often vendors will also provide free training and tips for their software that will help you get the most out of your investment.

Also don’t skimp on the hardware that goes with a POS system.  Of course, a lot depends on the size of your business, but in general, buying one touch screen terminal for your whole wait staff doesn’t increase their efficiency since they stand around waiting to enter orders.

If you’re about to buy a new POS system, shop around.  There are a multitude of vendors out there, and many specialize in different segments of the food service industry, like quick service, pizza, small independent, etc.  Make sure the vendor you choose offers a free downloadable trial version of their software so you can check out the interface before you buy.  Also look for vendors that offer updates and good customer support for their software.

6. Leverage Technology to Get New Customers

As more and more consumers use the internet or go wireless, it becomes more and more imperative that you use new mediums to reach your customer.  The most obvious element of a 21st century advertising campaign is a website for your restaurant.  A well designed and optimized website can be a great business generator, but make sure you follow a couple basic principles:

  • Include a current, printable menu
  • Make sure your restaurant’s phone number, address, and driving directions are clearly visible on every page
  • Submit your website to local and national restaurant directories

Your website should really just be a launching point for a larger advertising push using new technology.  View it as a platform to which you can drive new customers.  For example:

Start an email list and send out a regular newsletter to loyal customers.  This is a great way to build customer loyalty and keep your regulars updated and engaged.  If you’re putting the time into producing a newsletter, make sure it goes to as many people as possible.  Encourage customers to sign up at the host stand.  Offer a prize for filling out a survey that requires an email address.  You could even hold a raffle that requires only an email to enter.  Those addresses are worth their weight in gold for attracting new customers and bringing old ones back.

Go wireless.  Many restaurants have started moving beyond email and targeting customers via text message as well.  This is an especially useful tool for targeting younger customers.  The National Restaurant Association has endorsed a progressive new marketing company called Fishbowl, Inc., which has been helping thousands of restaurants and chains across the country to use innovative technology to connect with customers wirelessly.

7. Learn From “Regulars” and Incentivize Them To Come Back

Perhaps your best resource for improving operations in your restaurant are your regular customers.  You have spent a lot of time building loyalty with this group and they have spent a lot of money patronizing your business.  So take the time to survey and incentivize your regular crowd.

Building an effective customer loyalty program is the best way to achieve this.  Airlines have been using loyalty programs for years, but the food service industry has only recently gotten into the game.  Some effective ways to implement a loyalty program:

  • A loyalty card that gives rewards for frequent visits (such as eat ten meals get one free)
  • A regular-only e-newsletter with special promos, prizes, and giveaways in exchange for surveys and feedback
  • Bring-a-friend campaigns that give away a free meal to a regular who brings a friend to eat who has never patronized your restaurant before
  • Special buy-in clubs that target specific segments of your customer base.  For example, Hard Rock Café has a Pin Club for fans of the special collectible pins sold at the chain’s locations

Focus on promoting your brand when implementing a customer loyalty program, and be willing to commit the necessary resources to fund an ongoing program.  The cost can eat up a large part of your marketing budget, but the reward in brand recognition, customer loyalty, and regular feedback and customer information are vital to creating a stable base for your business.

8. Promote the Most Profitable Items on Your Menu

1017455_bar_graph_3When it comes to analyzing which items to promote on your menu, it’s important to recognize two main categories: best sellers and best money makers.  That’s because the best selling items on your menu, while important, may not be the ones you want to spend the time and money promoting.

For one thing, these items are already a best seller, so why promote them?  Another consideration, and a much more important factor, is that there are probably other items on your menu that have a much higher profit margin and aren’t selling.

A high profit margin menu item is one where a high percentage of the price of the item is net profit.  These items are often made from inexpensive seasonal ingredients combined with easy prep methods.

Utilize multiple marketing strategies to promote high margin menu items.  On menus, highlight them with a box or other attention grabbing graphic.  Use email marketing for promotion, especially if they are a seasonal item.  And train servers to sell high margin items whenever possible.

Every restaurant has bread and butter best sellers that form their reputation.  But often the secret to higher profits lies in the high margin sleepers.  Properly promoted, these menu items can provide a real boost to your bottom line.  Don’t be afraid to experiment with different high margin items until you find a winning lineup that can be regularly rotated in and out of your menu for a year-round bump in profits.

9. Minimize Energy Expenses

Restaurants use a lot of energy in day-to-day operations.  From heating and cooling the front of the house to cranking a charbroiler for the entire dinner rush, the meter is always moving, and every revolution cuts into your profits.

Optimizing your business for energy efficiency is no small endeavor, and initial investment costs can be significant, however, the long term benefits can be substantial.  Here are some tips to making your restaurant more energy efficient:

Update old restaurant equipment.  From reach-in refrigerators and freezers to steamers to ranges to warming cabinets, the newer the equipment the more efficiently it will operate.  Energy Star, a government-run agency promoting energy efficiency, has started rating restaurant equipment based on efficiency standards.  Look for the Energy Star label when purchasing new equipment and use the Energy Guide to compare energy usage.

Manage front of house heating and cooling.  Keeping your customers comfortable should always be your first priority; however, there are several strategies you can employ to accomplish this efficiently.  Some examples:

Use Energy Star rated ceiling fans to circulate heat from the kitchen and from solar sources through the dining area.  Note that you probably don’t want to push hot air directly out of the kitchen, as this air usually smells like cooking food.  Instead, use fans to push heat radiating off shared walls and ducts into the dining area.  Conversely, ceiling fans can also be used to cycle cool air in summer or in warmer climates

Program or install a digital thermostat.  Digital thermostats automatically cut heat or air conditioning during non-business hours, potentially cutting energy costs by as much as a third

Use windows and doors for energy gain, not energy drain.  If you are remodeling or building new, look for Energy Star rated windows and doors that either reduce solar heat gain in warm climates or maximize heat gain in cold climates.  Make sure all windows and doors are well insulated, and use blinds or curtains or both to block the hot sun or the biting cold.  Use door closers to minimize loss when doors are opened

Manage back of house energy usage.  While cutting energy use in the front of the house is beneficial, the real energy hog in your restaurant is the back of the house, which means it’s also the place to maximize energy savings.

Train kitchen staff to reduce idle temperatures on ranges, broilers, and ovens.  Even though this equipment takes a while to reach peak cooking temperature, reducing the heat during idle times can result in significant energy savings

Set shut down and maintenance schedules.  A recent study revealed that over half of the commercial kitchens surveyed left warming cabinets on overnight.  Write, print, and post shut down procedures for all the equipment in your kitchen, and make sure easy to replace parts like thermostats, temp dials, and refrigerator or freezer door gaskets are checked and replaced on a regular basis

Improve water heater efficiency.  Insulate pipes, set the temp to 140 degrees Fahrenheit, program or install a recirculation pump timer, and make sure the flue damper is working.  Also make sure you fix hot water leaks fast and train staff to only run full racks through the dishwasher

A robust energy efficiency program can be costly up front, but as time goes on and energy costs go up, your profit margins will improve because of the money you invested in efficiency.

10. Diversify Your Revenue Stream

Running a successful, profitable restaurant is just like being a stock broker: you must diversify to minimize risk.  This lesson is even more relevant today considering the current economic climate.  So, you have a great concept, some popular menu items, and a decent dinner rush.  Good.  But your profit margins could be better, and your business more resilient, if you took the time to diversify.  Some ideas:

Add retail items.  Loyal customers love creative apparel referring to your restaurant.  Think of all the money the Hard Rock Café has made just from selling T-shirts and hats alone.  And they still have the gall to charge $16 for a burger!  Plus you’ll get some great free advertising for your business

Make your food more accessible.  Customers love your menu, but they may not have the time or the inclination to sit in your dining room and eat.  Consider carry-out for popular items, large party catering services, and even food delivery to make sure your customer can have your food whenever they want

Host special events.  Weddings, corporate functions, and large parties often require specialized menus and pricing, but making your restaurant available for larger functions is a great way to sell out the place on slow days and to take advantage of high seasons, like corporate Christmas parties.  Plus many of the guests at a large event have probably never been to your restaurant before, so impress them so much they come back for more

Create profitable partnerships.  Chances are there are several other local businesses that would like to reach your customer base.  Come up with creative ways to give such partners advertising access to your customers…for a fee.  This could include advertising in menu inserts, banner ads on the emails you send out, or product giveaways at promotional events in your restaurant.  Of course, there is a fine line here between annoying and pleasing your customer, but use constant feedback and modify your strategies until you get the formula just right.  The result will be a great revenue stream that is almost all profit

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Table Turnover: The Tradeoff Between Experience And Business

Table TurnoverEvery server hates “campers” – those diners who stay firmly parked in your section for hours on end, taking up a table that could have been given to another party ready to order (and tip) all over again.

For restaurant owners, table turnover can be a tricky balance.  On the one hand, you want customers to enjoy a great atmosphere while they dine.  It goes without saying that an enjoyable experience is more likely to bring customers back the next time.  On the other hand, every minute a table remains occupied after the customer orders their food is a minute you can’t seat another party.

The fast-casual segment has table turnover nailed down to a fine art.  When check averages are below $50, volume is the name of the game.  These restaurants employ several strategies to help customers out the door quickly so that new customers can be served.

These strategies include loud decibel levels, which have been proven to make customers eat faster.  Bright colors like red, yellow, and orange entice customers in and also help speed eating up.  Purposefully uncomfortable seating also helps encourage customers to eat and leave quickly.  Finally, “floating” seating – located in the middle of a room and away from walls – will turn customers over more quickly.

For independents, these strategies can be employed to get turnover moving, but at a cost.  That cost comes when customers looking for a pleasant meal start complaining about loud music, go somewhere else when they see that the only tables available sit in the middle of the room, or don’t come back because their back hurt days after sitting on your furniture.

It all depends on what kind of customer you want in your restaurant.  Fast casual eateries are not trying to sell you a dining experience.  Their customers are looking for value and a quick serving time.  If a restaurant in fast casual delivers on those two expectations, then a customer is going to tolerate the gentle nudging these establishments employ to maximize their volume.

Fine dining restaurants had better be careful about how they try to move customers out the door.  Nobody wants to spend $100 on dinner and have to yell over the din at the same time.  Of course, the customers who eat at a fine dining establishment understand they are paying for the experience as much as the food, and the restaurant’s owner had better make that experience a good one.1047072_american_diner

Unfortunately, many independents fall somewhere in between these two extremes.  The art of managing table turnover while still providing a rich customer experience can be difficult.  Some strategies to help you strike the right balance:

Segment seating. People who took the time to reserve ahead of time are looking for a dining experience that stands out from the norm.  Nice, comfortable booths, quiet corners, and big partitions with lots of plants will make these customers stay longer, but chances are they are expecting to do so anyway.

Use other methods to make sure the check average is high, like presenting realistic models of dessert offerings.  Anytime the customer can see what’s available rather than just hear about it, they tend to order more.

Other sections, especially near the kitchen and the entrance, should be more open, more noisy, and have a lot more “floating” furniture.  On busy nights, when it’s time to turn and burn because you’re filling up with walk-ins, use these sections to get table times down and turnover way up.

Create scarcity. Like most restaurants, some nights, usually on weekends, are much busier than others.  On those busy nights you want customers turning over more frequently and you don’t want reservation no-shows leaving tables empty.  Many restaurants deal with this by refusing all reservations on their peak nights and taking walk-in business only.

This has the effect of creating a more chaotic environment, which turns over your tables more quickly.  It also looks great on nights when there tends to be more foot traffic, because the sight of a dining area bursting at the seams does more to advertise your establishment than anything else.

Train your staff to help move customers along. Without being pushy, a well-trained staff can present several hints to help turn tables.  Making sure all dishes are promptly cleared, dropping checks at an appropriate, yet early, time after the meal, and processing payment promptly will help nudge the customer towards the door.

No matter what strategies you choose to employ in your restaurant to maintain a high turnover rate, be vigilant about analyzing their success and gauging that against customer experience.  Keeping turnover high is good, but only to the point where customers enjoy eating in your restaurant.

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Klick Kitchen: Can Your Restaurant Save By Ordering Online?

Last summer I wrote about Klick Kitchen, an internet-based replenishment service for food service businesses.  At the time it struck me as odd that despite all the press Klick Kitchen had been getting, there didn’t seem to be any feedback from real chefs/managers/owners in the field who could substantiate Klick Kitchen’s claim that their service saves restaurants time and money when ordering food product from suppliers.  At $300 to sign up and a $30/month subscription fee, Klick Kitchen just didn’t seem like it could really save a lot of money, time notwithstanding.

Recently Billy Humble of Klick Kitchen contacted me wanting to discuss the new direction the company was taking, and he was gracious enough to spend some time with me on the phone explaining Klick Kitchen’s new approach.

Klick Kitchen is now free for restaurants to sign up and free to use. The company plans to generate revenue through paid featured listings for vendors and optional reporting services for members.

In case you’re unfamiliar with how it works, members who sign up get access to a list of vendors in their area, complete with real-time pricing and contact information.  The site allows users to contact their vendors to order and shop for new vendors very easily.

According to a recent press release quoting Klick Kitchen’s founder and CEO Jordan Glaser, the company can help restaurants because: “Even for chefs who are already ordering online, Klick Kitchen provides a central marketplace where they can order from all their vendors in one place using one system,” explains Glaser.  “With the new 3.0 innovations, chefs can further expedite ordering, reduce errors in the order process, find new products, stay on top of pricing fluctuations and keep well-organized records of their orders.”

Klick Kitchen is currently available for restaurants and vendors in the New York City metro area only, but they do have plans to expand at some point in the future.  The website has about 155 vendors and 60 member restaurants.
With all due respect to Klick Kitchen’s ongoing efforts to streamline the food product replenishment process for restaurants, my original question remains: do chefs and restaurateurs find such a service useful in their day-to-day operations?

Klick Kitchen’s press release features a glowing testimonial from a NYC chef, and I am sure there are other satisfied customers out there.  But how does the food service industry feel as a whole?  The company’s premise is that there isn’t another place to find a comprehensive list of food vendors by product, and that using Klick Kitchen save a lot of time that would otherwise be spent tooling around Yahoo or Google searching for vendors.

While that may be true, how many of you out there see a need for a service like Klick Kitchen?

Leave some feedback below!

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POS Systems: Love Them, Learn Them, and Please Don’t Ignore Them

Restaurant POS SystemI didn’t learn to program my first Point of Sale (POS) system until I actually become a head Chef at a restaurant and the POS system impacted my food cost. I taught myself how to use it, as there was no operating manual and none of the waitstaff or the owners knew how to program it either. After two weeks of not being able to program in specials and receiving hand written dupes with orders written on them, flank steaks coming through as tenderloins, sides of fries being no veg, and a host of other things that no one knew how to change or delete, I got fed up. This was my first introduction to the world of PCs, formerly being a Machead.

I have worked in many places where none of the kitchen staff knows how to program or change the POS system. This is a recipe for bad news and a food cost that can go through the roof even in a well managed kitchen. Even if it seems to be simple inexpensive errors, a side of fries instead of no vegetables, on a repeat basis, the small stuff can add up quickly. A side salad with no dressing or dressing/side gets sent out repeatedly with dressing on it, this salad can not be saved, its dressed and the salad wilts quickly.

An inexpensive side at $1.50 a pop, can quickly add up over time when line cooks don’t know or forget that X really means Y. Not to mention the time wasted for a waitperson to physically have to enter the kitchen, tell the cook that this salad has dressing/side and the time the cook wastes (especially on a busy night) noting this.

$1.50 X 100 times is not small change. Multiply this daily for a month and the small change equals thousands of dollars.

Not only does having a properly programmed POS system make sales and inventory easier to track, it cuts down on error, time wasted by waitstaff and by back of the house staff clarifying things and it can also impact tracking theft of product.

Point of Sale systems are wonderful tools, take advantage of them.

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HACCP Principle 4 – Establish Monitoring Procedures

Chefs Need Help Monitoring HACCP ProceduresNow that you’ve established your Critical Control Points and Critical Limits for every preparation process and every menu item in your restaurant, it’s time to monitor.  Limits and CCPs don’t do any good if there’s no enforcement.  The first thing to establish is someone who will accept responsibility for monitoring.  If no one must answer directly for monitoring, then no one will actively enforce the managerial control points you have taken so much time to identify up to this point.

Of course you may want to have different people monitoring different CCPs.  Regardless of who takes responsibility, proper training is an absolute must.  Training ensures that monitoring processes are carried out accurately and effectively.  Every CCP monitor should understand the following:

  • What the Critical Limit is for each CCP under their control
  • How to measure that Critical Limit (for example: how to properly take the temperature of a cooking chicken breast)
  • Where to find and how to calibrate measurement equipment like thermometers
  • How often to monitor

The CCP, Critical Limit, and the procedures on when, how, and where to monitor should all be written down in clear procedures that the person in charge of monitoring has read and signed.  This helps prevent confusion and assigns official responsibility, which is particularly useful in case of problems down the road.

An example set of guidelines for a specific menu item might proceed as follows:

Menu Item: Chicken Parmesan
Assigned to Process 2 (this restaurant cooks once then immediately serves this menu item)

Identified Prerequisite Program Controls:

Identified CCPs:

  • Cooking temperature
  • Hot holding temperature or using time

The Critical Limits Are:

  • 165 degrees Fahrenheit for 15 seconds for cooking the chicken breast
  • Serve immediately

Note that this particular restaurant serves their Chicken Parmesan immediately, thus using time as a way to control the return of bacterial HACCP Monitoring Includes Checking Hot Holding Temperaturesgrowth.  If the restaurant did not plan on serving the chicken immediately, then a hot holding Critical Limit of 135 degrees Fahrenheit would need to be in place.

So someone in your restaurant needs to be trained and accept responsibility for monitoring the chicken breast while it cooks and ensure that it is regularly hitting 165 degrees Fahrenheit for 15 seconds.  It is up to you to establish the guidelines for the frequency of the monitoring.  The restaurant in this example tests one chicken breast in the beginning of the dinner shift, one in the middle, and one at the end of the rush to ensure temperature Critical Limits are being met.  Consult with your local Board of Health while you are developing your own guidelines.

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Beg, Borrow, Or Blow Your Food Cost

Restaurant TipsIn a restaurant, especially a newly started or taken over one, it is highly recommended you get to know the other area food facilities and develop good relationships with them. While this may seem quaint, sort of like moving into a new neighborhood and making nice with the neighbors, there is a very good reason for doing this.

Yes, technically, other area restaurants are competition, but they can also be allies and assets. Similar to a bed and breakfast being full and recommending another one in the area when they are fully booked and it’s in turn reciprocated. This can also happen in restaurants. Each restaurant unless they have the exact same menu as you, the same prices, the same décor and clones of all your staff, is unique to itself.

The primary reason for being buds with your neighboring restaurants is because in a pinch, they may have stock of something you are out of. While this may seem purely mercenary to think about this in advance, it’s not. Most restaurants in business today that have been around for awhile, have a relationship with at least one if not more restaurants in a fairly close proximity, or they have a key food vendor who will go the extra mile for them and track down things at 11 at night for them.

Whether it’s the owners being friends or the chefs, cooks or bartenders, it’s important to be civil to the neighbors. Easy ways to do this may be stopping in for dinner occasionally or an after hours drink and meet everyone in charge. If owners/chefs/key employees stop in your place, buy them a drink, get them some free apps.

Being prepared for this eventuality (of being out of something) may seem overkill and not on an important to do list, but more often then not a key ingredient of your most popular menu item goes out of stock on a Holiday weekend or that caterered party you are doing for 50 people is suddenly increased by 40 people the day before and you can’t get product in the door in time for it. While this may not happen often, and if your management team is a well organized one, it will dramatically decrease the odds of it happening, but it is still best to plan for every eventuality.

When many restaurants run out of product, they send someone to the local grocery to get a replacement instead of running out completely. Doing this will totally kill your food cost. Not to mention many retail products don’t have the same quality as wholesale. Borrowing for a neighboring restaurant who may have paid $0.40 more a pound for Statler chicken breasts instead of buying at retail for 4 times what you paid for it originally, saves you time and money in the short and long term. Buying retail can also affect cash flow in house and result in confusion at the end of the night, when the cash-out doesn’t match up (i.e. the cook or busboy forgot to return and log the receipt from going to a grocery), not to mention headaches for your accountant. Cash for paying for retail items comes directly out of petty cash usually, more cash-out mistakes and petty theft as well can result from this.

In 20 years in the business I have lost count of the number of times other restaurants have bailed me out and in turn I have bailed them out. There are some things you just cannot plan for, no matter how well organized and anal you are about your inventory. The 30 person buffet that wants poached salmon: your normally trusted fish vendor either out of stocks you or on the very off chance you get a bad batch of fish, which was specifically ordered to cover the buffet and you sent it back because it was poor quality. What was the option, take in bad fish and have your customers get sick and/or your reputation go in the toilet? When dealing with perishables there is only some much extra you can keep on hand at any one time.

While you may have a stock in of salmon in this instance (say you run it regularly and it’s a hot item on the menu) do you run that salmon (that you have in house for your party) and 86 it on the menu and have some unhappy customers in your dining room? Run down to your local Stop & Shop, buy salmon for twice the price that has already had twice the day run shelf life? The alternative is borrow from a local that you know has good product and replace it at the first opportunity. You want happy satisfied customers all around.

There are caveats to this:

* Keep careful track of what has been borrowed from whom and make sure product when re-supplied is the same quantity and most importantly the same brand if possible.

* When items are borrowed, especially meat and fish products and most importantly shellfish, keep very very careful records of this, if items were contaminated prior to the borrowee’s restaurant getting hold of it, it needs to be trackable. Most borrower/borrowee relationships buy from many of the same vendors but not all.

* Don’t borrow from others that have bad quality control, if your chef wouldn’t have let it in the door in the first place from a vendor, it’s not something you want either.

* Don’t abuse the area relationships, running out of Maraschino cherries every Friday night tends to get old very fast to the borrowee. (not to mention annoying to regular customers)

* Be wary of the habitual borrowers in return (see above)

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Management Styles – Micro Manager or Laissez Faire

Restaurant Management StylesYour management style can have a lot to do with your success in running a restaurant, or any other business. While people can debate all day long about which is the best management style to use in different situations, one thing people will agree on, if you get it right (or wrong) it can have a big affect on the success of your business.

There are a variety of management styles, and most effective managers use a combination of styles to handle different situations. A firm approach might work in one situation while different circumstances may be better handled with a softer approach. It largely depends on you and your personality.

It is when managers spend too much time at either extreme of the management spectrum, micromanagement and laissez-faire management, that problems can start to arise. While there may be times where either of these styles can be effective, too much time will lead to difficulties with your staff.

Micromanagement is a style that refers to a very hands on approach. It is typified by a manager that wants to control even the smallest details of every employees job. They want to know the details of every thing that goes on in their business. While this is not necessarily a bad thing, if it is the defining factor of a manager the staff may start to feel like everything they do is under scrutiny. They begin to feel like they have no power to make any decisions on their own.

The biggest downside is that supervisors and employees will not take ownership in their jobs, and without any ownership, there is very little pride in the work that they do. Over time, employees will feel frustrated to the point that they will start looking for a new place to work. While some employee turnover is a natural part of the restaurant industry, too much turnover can really disrupt your business. You will spend so much time in training that you will not have the time you need to move your business forward.

The other end of the spectrum is the laissez-faire manager. This is the complete opposite of the micro manager. Rather than trying to control every detail, the laissez-faire manager allows employees to make most of the decision on their own. The manager makes very few decisions about the running of the business. Most of the day to day operation is handled by supervisors or by the staff themselves.

Employees need to have some responsibility, if there is no management control the inmates will begin to take over the asylum. If left unsupervised employees may begin to start making decisions that look out for their own best interest, and not the best interest of your business.

Like in so many area in life, you need to have balance in your management style. Rather than have one style that you force onto every situation, you will be better served to use a variety of styles that you can use in different situations.

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Restaurant Management Tips: The Art of Scheduling

The food service industry can be a brutal business, and sometimes the differences between making it and breaking are very, very thin.  As the manager, you have a lot on your plate – from training and supervising employees to running budgets and purchasing new equipment and supplies.  This series is intended to help you navigate the treacherous waters of restaurant management.

The Art of Scheduling

Payroll is the largest single expense category for any restaurant or commercial kitchen.  It is therefore extremely important, especially in a period of downturn, to manage this expense effectively.

On the other hand, the kitchen, bar, and wait staff you employ are what make your business tick and your personal connection with these people is an important dynamic.  Balancing personal relationships with labor cost management is one of the more difficult aspects of being a food service manager.

Here are some tips to help you walk that tight rope:

Evaluate how much work needs to be done. As you know very well, different times of day, days in a week, and times of month and year can see very different sales volumes.

Scheduling StaffOne of the most common mistakes made in staff management is overscheduling, and you won’t know how many people to schedule unless you can predict sales volume on a given day.

Keep a record of sales so that you can evaluate when your peak sales periods are.

Next, go through a list of your available staff and rank them according to ability. It’s very important to be objective and put personal relationships aside and create an accurate ranking.

Once you can predict sales peaks and valleys, and know the number and quality of staff available to you, you can start creating a schedule that will meet peak demands without having to pay extra staff.

Scheduling is a fine art. You have already ranked your employees and know when peak demand times will occur.  Now it’s time to start matching staff with sales volume.

The trick is to make sure you always have top performing staff around for busy times, which will allow you to reduce the overall staff scheduled for peak sales periods.  Top employees perform many different tasks efficiently, and can help less experienced staff members so you don’t have to.

These employees are the fulcrum of your business, and you want to make sure they are there when you’re making the most money.

Conversely, less experienced staff are never going to develop into top staff if they always have someone there to hold their hand.  Slow and moderate sales days are a great time to schedule these employees and give your top staff the day off.

You can take advantage of the relatively slow activity to train and get to know your newest staff members, improving retention and performance during peak times.

Also update your schedules periodically. Over time factors like sales and staff performance will change, and you’ll need to adjust your scheduling accordingly.

Staff scheduling should be an ongoing process that you constantly refine to make sure your business is maximizing sales.

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