A New Restaurant

A recent study showed that two-for-one deals are a really bad idea for small, privately owned restaurants.  The study showed that the offers work very well at getting people into your restaurant, but as soon as the offer is over, they stop coming in.

Unfortunately, many restaurant owners don’t understand how these offers work, or don’t think through how using the offer will affect their business.  They seem to offer deals because it’s the trendy thing to do.  It’s that lack of understanding how it all works that will lead to your restaurants failure.

The idea behind the two-for-one deal is that it gets people into your restaurant, and you can show them what you have to offer (just make sure your ready for them when they get there).  It’s a great plan if it really worked that way.  The truth is, most of the people are only there because of the deal.  The nest time they want to go to a restaurant, they will look for another deal.  If you want them to come back to you, you have to give them another sweet offer.  For most of them, the only time you will see them is when you run a two-for-one offer.  Your restaurant will only get a small percentage of customers to return.  In my book, that doesn’t qualify as a successful promotion.

Now I don’t know about your operation, but most restaurants can’t afford to see their costs double as a percentage of sales, and that’s what two-for-one offers do to you.  It reminds me of the old joke about the guy that says he loses money on every deal, but he makes up for it in volume.  Unless you have really deep pockets, it does not make good business sense to run deals that cause your restaurant to lose money (unless you are running the deals to force your competition out of business).

There are a lot of good advertising methods that you can be using.  Discounted appetizers or desserts, cents-off coupons, these are just a couple of ways to draw customers in without breaking the bank.  Once you get them there, it’s up to you to make sure they come back.

While visiting with family over the Christmas holiday, I got into a discussion with my sister in-law about an online purchase that was made.  The online ad stated that shipping would cost $29.95, but when she got her actual bill the shipping charge was $39.95.  She had contacted the company and they were arguing with her, stating that they did not offer shipping at the lower rate (even though she sent them a copy of their ad that listed the lower rate).

When she first started telling me about the site and the purchase she had made, I was interested in checking it out.  There were some things I was looking at buying, and I thought this might be a great place to start my search.  After hearing about the debate over shipping charges I’ve decided not to use this site.

What’s the lesson here?  By arguing with a customer over a charge that is a approximately 3% of the total order, this company has lost a potential $500 sale from a customer that heard about the incident.

This isn’t about standing up to a customer that has been a pain in the neck every time they walk into your restaurant.  This is about overcharging a customer, then refusing to correct the mistake.

If you decided to change your menu pricing, but you missed changing the price on your “Specials” sign, which price would you charge your customers?  Would you charge the higher menu price even though a lower price was clearly displayed elsewhere?  You cold do that, but how many customers would you be willing to lose in the process?

Today’s a travel day for the family, but I wanted to make sure I took the time to wish everyone a very Merry Christmas.

Yes, it really does happen.  If your restaurant has grown beyond you and your spouse running everything, chances are good that at least one of your employees is stealing from you to one degree or another.  It could be skimming a little cash from the register, or stealing food from the cooler, or even just helping themselves to some extra meal items.  Regardless of how they are doing it, it is a cost of which you really need to be aware.

Employee theft comes in many forms, and there’s really no way to completely protect yourself from it.  All you can do is to have things in place that make it more difficult for your employees to get away with it.

Types of Employee theft

Under-ringing or tearing up dinner checks after collecting the money

If your restaurant uses hand written dinner checks, or older cash registers that don’t print out meal chits that are directly tied to a server and a dinner check, this is very easy to get away with.  The way it works is, the server gives the customer the bill for the meal, then rings a smaller amount into the cash register, and pockets the extra money.  Or they might not ring it into the register at all, and keep all or the money.

The solution to this is to spend a little more money to purchase a cash register system that makes each server accountable for what they ring up on the register.  While this may not be fool proof, it makes it more difficult for the server to under-ring meals.

Taking food

This is type of theft is just what you think it is; your employees walk into your pantry or cooler, and helps themselves to the food that you purchased for the restaurant.  Watch for employees that need to run back to the cooler or pantry just before they leave your restaurant at the end of their shift.

A couple of things you can do to discourage this type of theft are:

Do frequent food inventories.  People are more likely to steal if they think there isn’t much chance they will get caught.  By doing inventories on a regular basis you will know very quickly that food items are missing.  With that knowledge, it is much easier to narrow down who was working when the food disappears.

Another thing you can do is not allow employees to take any part of their employee meal with them when they leave.  Set a policy that all employees meals are to be eaten on the premises.  Without having this policy, employees will eat part of their meal, then pack the rest to go.  This gives them an excuse to pop into the cooler before they leave.

Charging for time they didn’t work

This requires two or more employees working together.  The first employee in will clock themselves and the second person in, even though the second person hasn’t shown up for work yet.  The second person is now charging you for labor even though they aren’t working.

This type of theft is pretty easy to foil.  Keep an eye on who is scheduled, and make sure they are showing up for work on time.  When you are doing the payroll, make sure you compare the payroll to the schedule to ensure you’re not paying someone who was not scheduled to be on the clock.

Another method that I’ve seen done is to require employees to have their time card initialed by a manager at the beginning and end of the shift.  It is more inconvenient, but it is a very effective method of avoiding time theft.

These are just a couple of the ways employees use to try to get a little something extra.  In reality, there’s no way I could list them all.  Dishonest employees can be very creative in the ways they will steal from you, so you have to be vigilant.  Keep an eye on your cash and your inventory, run background checks on employees.  Most of all make sure your employees know that not only will they be fired and prosecuted for stealing, but anyone who aids abets the thief will lose their jobs as well.

Your cash flow is the life-blood of your business.  When people steal from you, they are hurting your cash flow.  If you loose too much, you can loose your business.  You can’t afford to be soft when it comes to people stealing from you.  When it happens, everyone’s job is at risk.

Rule #1: The Customer is Always Right

Rule #2: Rule Number 1 is a Crock

Rule #3: The Customer Can Never Know About Rule #2

For years it has been the mantra of customer service: “The customer is always right.”  We repeat it with a smile and a wink and never for an instant believe it is even close to the truth.  The customer is critical to our restaurants success.  The customer is our restaurants lifeblood; its cash flow.  The customer is the reason our restaurant exists.  None of that makes the customer inherently right.  It does mean that you do need to treat them extremely well whenever possible

I wrote a while back about the “Customers Bill of Rights.”  I said then, and I still believe that the customer does not need a Bill of Rights.  The customer already holds a position of power; they have the ability to take their business elsewhere.  Good customers understand that, and when necessary, can use it to good advantage.  PITA’s will try to play that card as often as possible to try to get freebies, discounts, and special service whenever possible.

As a restaurant owner you sometimes need to decide which battles are worth fighting.  There are situations where the customer is clearly not right, but they truly don’t understand why they are not right.  It may not be worth battling this customer the same way you would a customer that is trying to work the system.

One big piece of advice: never throw your employees under the bus for the sake of one troublesome customer.  You will do major damage to your reputation as a leader if your staff cannot trust that you have their back.

Treat your customers well.  They are the key to your restaurants success.  Just remember, their money does not make them right..

I love to read a well written menu.  I enjoy seeing the different ways that restaurant owners use wording to capture the essence of their meals.  Some do it with elegance, others with sarcasm and self-deprecation. Regardless of the way they go about it, they are trying to capture the customer’s attention and set a desired level of expectation.

Besides increasing anticipation for the coming dish, the description of each dish on the menu should help steer your customers toward making better decisions about what to order.  My wife does not care for overly spicy food, so if she sees something she likes with chipotle sauce, she has to put off making a decision on her order until after the server comes back to let her know how hot the sauce is.  Words like mild, spicy, sweet, savory, delicate, or anything else you can think of that will give the customer an idea about the level of flavor they can expect.

Don’t be afraid to be a little creative with the wording on your menu.  Think about what you order at your favorite restaurant.  How is it described on the menu?  Go all out.  Instead of “Roasted Vegetables,” offer your customers “oven seared winter vegetables lightly tossed in an olive oil and balsamic vinaigrette.”

You need to prepare your customers for the food they are about to eat.   When they go to a restaurant they are not just buying the meal, they are buying an experience.  Successful restaurants understand that the meal begins with the menu.

I’ve said it before and I’ll say it again, service can make or break the customers experience. 

Case in point:

Last night my wife and I went with a group for friends to a very nice restaurant in town.  The chef that designed the menu was a protégé of Wolfgang Puck, so our expectations were very high.  The food was great, as was the plating and presentation.  However, the server was a bit of a disappointment.  She gave us all the impression that she was not overly interested in working, at least for that evening.  In fact, she seemed like she was bored with it all.  At one point one of the men told her to smile, and when she did her whole face lit up.  Then the smile faded away, never to return.

One woman in the group asked her what she would recommend.  The server’s reply was, “I’ll eat anything here.”  Nice to know, I guess, but it wasn’t overly helpful for the people that weren’t familiar with the menu.  I’m not looking for the server to make the meal choice for me, but I would like her to be able to speak somewhat coherently about the menu items so I can make a better selection.

I don’t expect strict “serve from the left, clear from the right” table service, but several times she stood at the end of the table and reached across the plate of the people sitting there to get to the empty plates of the people sitting further down.  I don’t expect that even from lower end restaurants.

Overall, it was still a good evening.  We enjoyed some great food, and had a good time visiting with each other, but it could have been a much better evening if the server was better at her job.  In the end she hurt herself more than she hurt us.  She still had to be there working, and her tip for the meal was considerably lower than what it would have been had she made a little extra effort.

Will I go back again?  Absolutely.  Will I continue to go back if I have similar service?  Probably not.  I’m a firm believer in second chances, but if the problems continue it is an indication of a problem that goes beyond one bored server.

Train your staff, then watch to make sure they are delivering service to your standards.  It’s a great way to ensure your success.

There is a saying in management training that says to “inspect what you expect.”  What that means is, if you have expectations about the way you want your restaurant to operate, you have to be vigilant to make sure your staff is living up to those expectations.

A while back John Foley at The Restaurant Blog with AllBusiness wrote about restaurants that let standards slip because of lack of attention by owners and management.  This lack of attention could be because you see it every day and you just don’t notice it anymore, or because the poor performance of your staff has worn you down.  While the first is a problem that is common to many businesses, it can be remedied.  The second problem is inexcusable, but don’t worry, it can also be remedied.

Looking With New Eyes

A few months ago I wrote about looking at your restaurant as if you were a first time customer.  I said that you have to look at your restaurant through new eyes.  Really make an effort to see what areas need tidied, repainted, or scrubbed down. 

It’s easy to start overlooking the little details.  Keeping up with cleaning and updating your restaurant is a never ending, and often thankless task.  You scour the floors and counters, and as soon as the next day’s crew comes in, the place is a mess again.  Sometimes you get tired of cleaning the same mess over and over again, but if you want to be successful, you have to do what you have to do.  The hard part is, no one notices how hard you work to keep it clean.  However, if you start to fall down on the cleaning, everyone will start to notice.

It is critical that you make time to look at your restaurant with a critical eye to find the places where quality is starting to slip.

Setting the Bar Higher

The second problem I mentioned was that sometimes owners get tired of butting head with their staff, so they lower their standards to a level that the staff is more comfortable with.  That is a quick way to put your restaurant out of business,

Let’s face it, no one is more interested in the success of your restaurant than you are.  If you think your staff is going to voluntarily go the extra mile for your success you are sorely mistaken.  You will find a few that are conscientious enough to help you out, but for the most part, they will not do it on their own.  It is up to you to set the standards for the restaurant, then make sure your crew delivers.  If they don’t, replace them.

This is a business that chews up underachievers and spits them out.  Restaurants fail at an alarming rate.  Don’t allow your restaurant to fail because you lost your focus on the day to day upkeep of your facility.