Tuesday, April 26, 2016

Restaurant Consulting NYC | Where Oh Where Has My Margin Gone? The Changing Labor Environment and How It Affects Restaurants | 4Q Consulting, LLC

Where Oh Where Has My Margin Gone?
The Changing Labor Environment and How It Affects Restaurants 

People outside the restaurant industry are often surprised by how small restaurant profit margins actually are.  To say margins are razor-thin would be an understatement, as the average profit margin of a restaurant is 3-5% of total revenue.  Labor expenses are a restaurant’s largest expense and the external forces on labor are keeping many restaurateurs up at night.  

Labor-related issues will be the biggest challenges facing the restaurant industry in 2016 and beyond. Restaurants will need to rethink their business models to handle the changes that are coming.  Here are four items that we are advising our clients to watch carefully:

Tightening of the Job Market - Finding top talent is becoming increasingly difficult for restaurant operators.  With the improved economy, the growth of the restaurant industry and the continued low labor participation rate, finding quality staff is challenging.  According to federal data, the restaurant industry alone added 40,000 jobs, or 16% of all workers to the US economy in February 2016.  With increased competition for talent, the cost of recruiting and hiring new employees has become more and more expensive. Moving forward, employee retention will be a cost saving imperative and restaurants must work to slow the revolving door of employee turnover. Conversely, working short staffed has its own costs associated with overtime pay, poor product quality and customer service.

Higher Minimum Wages – Minimum wage increases disproportionately affect restaurants as the food service industry employs close to half of all the people in minimum wage jobs.  It is therefore no wonder that operators are worried about where the minimum wage issue is going.  Many states and municipalities – such as California, Seattle and most recently New York City and New York State – have passed accelerated, higher minimum wage laws that are forcing operators to rethink their labor and compensation models. 

New Regulations Governing Hourly Employees – Paid sick leave, spread-of-hours rules and healthcare insurance are additional changes to the landscape that operators must prepare for now and in the near future.  Ensure that you are fully versed in all the laws and regulations that affect your restaurant, so you can plan for any economic impact of these in advance.  If you need help in understanding these very important rules, get it. Not planning can put your restaurant at risk for a lawsuit.

Changes to the Federal Overtime Laws – The U.S. Department of Labor is working towards changes in defining who is an “exempt” vs. “non-exempt” employee. This will have a major impact throughout the restaurant industry.  Traditionally, salaried employees - such as restaurant and bar managers, chefs and sous chefs - perform manual tasks throughout their day while managing their staff.  New regulations may re-categorize these positions as “non-exempt” based on the job functions and entitle them to overtime pay if their salaries are below a certain amount.  Should this happen, operators will be required to rewrite their manager job functions and descriptions due to the potential economic impact of these changes.

With these big labor challenges, it will be crucial for operators to become more and more efficient to preserve their bottom lines – especially for smaller mom & pop operators.  As discussed in Between the Lines - Operational Challenges That Can Make or Break Your Restaurant:

         “Restaurant success depends on many things, but it can all boil down to 
          one question:  Where does the money go? Having a handle on your 
          operations is a key to answering this question. Have processes and 
          procedures to reduce economic drains, train your staff to follow them and 
          hold them accountable.” 

Not adapting and hiding your head in the sand will lead to poor management and poor fiscal controls – which can make those margins evaporate faster than a sauté pan of boiling water. 

Don’t know where to begin?  Do you know how to put policies and procedures in place to be as successful as possible?  www.4qconsult.com can develop customized operational guidelines to meet your needs. 

All original content copyright Noelle E. Ifshin, 2016-2017
Noelle E. Ifshin, President, 4Q Consulting, LLC 
noelle@4qconsult.com  www.4qconsult.com 
244 5th Avenue, Suite 1430, NY, NY 10001  
(212) 340-1137

Monday, February 29, 2016

Restaurant Consulting NYC | Can You Hear Me Now? Ensuring your Brand Message is Heard | 4Q Consulting, LLC

Can You Hear Me Now?
Ensuring your Brand Message is Heard

Often when we review a new client’s existing marketing and branding, we find an unclear and confused message.  In order for any marketing to be successful, it must find continuity and fluidity across all platforms; the message must be Clear, Concise, Consistent and Communicable.  If customers can easily understand who you are, it clears one obstacle in improving your top line sales. Remember, a customer’s experience with your restaurant starts long before they walk in the door. 

Here are four basics to consider in ensuring customers hear your brand message: 

Know who you are.  The reality of your restaurant has to meet the expectations you are putting out in your marketing.  As we discussed in Restaurants Know Thyself, you can't be all things to all people.  Know who you are, embrace it, and include it in all of your marketing. If you run a Mediterranean restaurant in name, design and decor, you should not have an Irish Pub menu.  Remember, marketing your brand is not just about paid advertising, it also includes items such as menus, signage, uniforms, and scripted server approaches at the table.

Be Consistent. 4Q preaches consistency a lot, in all aspects of restaurant operations. You’d be surprised how many times we see inconsistencies in basic information – such as hours of operation and menus – in different places where a restaurant promotes itself.  Are the hours of operation on your door the same as on the printed take out menu?  Are they the same on your website, Facebook Page, Google listing, online ordering portals, etc.? Additionally, does all of your media reflect a consistent message and communicate who you are (see above)?  If customers don’t get consistent information and messaging about your restaurant, they will become confused, get frustrated and turn elsewhere to restaurants that care to get it right. 

Get your message online and keep it in line. Restaurants don’t always embrace their digital strategy in this day and age of 24/7 connectedness.  Before the Internet, restaurant marketing was static: it consisted mainly of newspaper, magazine, radio, TV and the yellow pages ads.   Today, marketing a brand message has become dynamic.  There is so much noise out there in the digital/social media world with paid ads, social media pages, customer reviews, etc. that  vie for customers’ attention. You have to actively manage your image with a consistent message by:  producing and posting relevant content that draws new customers and keeps existing customers engaged; responding properly to complaints in a public setting; answering questions; and utilizing “Calls-to-Action”.   Keeping a clear, focused message in all your online interactions, can help you stand out in all this digital noise.

Teach the message.  Employees are your walking, living, breathing billboards inside and outside of your restaurant; but are they putting out “The Message”?   You must inject a clear, concise, and consistent message into your employees, and hold them accountable to communicating it.  If your message is that you are a farm-to-table restaurant, your employees must be able to explain that to any and all customers and potential customers. Additionally, as we discussed in Employees are Your First Customers, “In social situations, often the first question asked is ‘What do you do?’ or ‘Where do you work?’”  Each time your employee answers that question, is an opportunity to communicate your message.

Small or large, independent or chain, no restaurant can ignore how their marketing message is heard. Certain advertising campaigns still resonate in our culture, and are long remembered because they are clear, concise, consistent and communicable – you can still sing that 30 year old jingle.  All of the pieces noted in this blog must work together in concert:  like a choir everyone must be singing the same song, in the same key, or the audience will leave!

Don’t know where to begin?  Do you know how to put policies and procedures in place to be as successful as possible?  www.4qconsult.com can develop customized operational guidelines to meet your needs. 

All original content copyright Noelle E. Ifshin, 2015-2016. 

Noelle E. Ifshin, 
President, 4Q Consulting, LLC 
244 5th Avenue, Suite 1430, NY, NY 10001  
(212) 340-1137

Wednesday, January 27, 2016

Restaurant Consulting NYC | You and Me and Restaurant Makes Three | 4Q Consulting, LLC

You and Me and Restaurant Makes Three
Husband and Wife Restaurant Owners

As discussed in The Family Owned Restaurant, family business are the bedrock of the U.S. economy. Family businesses often start with a husband and wife team trying to make a better life for their families.  In many cases, the marriages and the businesses become so intertwined that it becomes hard to tell where one ends and the other begins.  Starting and running a successful restaurant can be more demanding than having a baby, and often couples do not survive the birth of a restaurant.  

In order to ensure both the restaurant and your marriage survive, here are four important items to keep in mind when opening or running a restaurant with your spouse:

Treat the business like a business, not an extension of the home.  Draw a distinction and leave work in the business. If both husband and wife are to be partners in the restaurant, having a written partnership agreement is recommended – especially if you plan on having additional business partners. By the time you realize you need an agreement, due to a dispute, it is often too late.  You should have a written agreement that includes: the division of ownership; an outline of the amount of, and stipulations for, taking salaries; and how to handle any profits or losses.

Don't assume that the role in the personal relationship translates to the roles in a work relationship. Just as you want to define the partnership agreement, it is advised that couples decide in advance the work roles within the business – which spouse is going to do what.  For example, the person who balances your personal checkbook at home might not be the best one to reconcile purchase orders and inventory.  And, when defining job roles, if there’s something neither is good at, delegate it to someone else!

Couples we work with find that the key to their success as both a married couple and business partners is to continually communicate their roles and how they can help each other in those roles.  In that regard:  

Standard operating procedures (SOP’S) should be agreed upon, set and followed. Understanding the task expectations of each role and adhering to the agreed upon SOP’S that meet them, removes the possibility of misunderstandings with couple business owners.  Even the small tasks matter: agreeing upon how receipts are filed and the books are balanced; when cash is taken to the bank and who does it; who orders food and beverages and what levels of inventory you plan to keep; and who handles staff scheduling and how are changes to the schedule made are all examples of key items to agree upon in advance.

Support each other and be unified.  Present a united front to your employees at all times.  As basic as it sounds, do not bicker, fight or have large disagreements in front of your staff.  Like another other business partner relationships, you will have disagreements on how to run the business. Remain professional at all times and take those arguments off-site or behind closed doors.

Even though you are spending a lot of time together in the restaurant, you still need to make time for each other.  Find a way to have a night together away from the restaurant – even if you end up discussing restaurant business, being in a different environment changes the conversation.  And most importantly, try not to go to bed angry.  Fighting couples don’t work well together and can have a huge impact on how the business functions.

Remember why you decided to open a restaurant in the first place.  You want to plan ahead to be as successful as possible, while ensuring that demands of the restaurant don’t pull apart your marriage!

Don’t know where to begin?  Do you know how to put policies and procedures in place to be as successful as possible?  www.4qconsult.com can develop customized operational guidelines to meet your needs. 

All original content copyright Noelle E. Ifshin, 2015-2016. 

Noelle E. Ifshin
4Q Consulting, LLC 
244 5th Avenue, Suite 1430, NY, NY 10001  
(212) 340-1137

Monday, December 7, 2015

Restaurant Consulting NYC | Restaurant Industry Changes to Face in 2016 | 4Q Consulting, LLC

Restaurant Industry Changes to Face in 2016

As we ring in 2016, there are some big changes facing the restaurant industry.
Restaurants must prepare to face these changes in the year ahead to mitigate disruption to business operations, reduce costs and maximize customer satisfaction. 

There is good news on the horizon, as industry analysts point to a strong outlook for restaurants relative to the US economy for 2016.  The bad news is the restaurant business isn’t getting any easier.  Restaurants, which already operate on razor-thin margins, now face rising wages and commodity costs, increasing government regulations, and additional security and safety concerns.  

Operators should focus on the following four items to move their business forward in 2016:

The Pressure of Rising Wages, High Employee Turnover and the Reduction in the Labor Force will require operators to think strategically about their HR in relation to their overall operation.   The economic shift from the customer to the employer to cover a living wage – increasing minimum wages and a move away from a tipping model – compels operators to reduce employee turnover and hold on to their best employees.  We have discussed the cost of turnover before, but now more than ever restaurants cannot be a revolving door of hourly staff.  The cost to onboard a new employee is too high and constant turnover can make it hard to maintain your desired level of product and service quality.  Additionally, as the economy continues to recover, there are, and will continue to be, fewer qualified, skilled candidates to fill critical positions.

Technology can and should be leveraged in all aspects of your restaurant from enhancing the customer experience, to managing products and staff, and even monitoring food and beverage storage and usage.  The right investment in technology can help you be more flexible and nimble, which in turn allows you to manage what impacts your bottom line in a timely fashion.  The right technology can enable you to change menus sooner to combat rising costs, launch and track promotions, and ensure that your reservation interface is in-line with what your customers want.  Operationally, new technologies can improve scheduling to reduce labor costs, and increase table turnover to increase sales. Administratively, new technologies can help small businesses with their bookkeeping, payroll and sales tax processing.  Lastly, you must stay compliant in all Federal, State and local technology regulations that keep your customers’ personal and payment information safe from data breeches – which can be a costly mistake.

Caring For and Knowing Your Customer is crucial for your restaurant’s survival. According to a recent report by Morgan Stanley, Millennial’s’ dining habits are drastically different their parents’. Millennial’s eat out more often, view “Healthy” foods differently (they don’t count calories as previous generations), demand food from ethical sources, do not want traditional “Fast Food” and prefer Fast Casual Concepts. Millennial spending habits are expected to peak in the next 3-5 years to become one of the largest growing restaurant demographics in the United States.  You must know who your customer is to be able to provide them what they want, to reach them in your marketing and keep them engaged.

In light of what we discussed above - the challenges in the changing labor market, maintaining razor thin margins, trying to keep up with technology – Consistency must become your central goal.  As we discussed in Consistency Is King, “Customers should not have to spin the roulette wheel each time they visit your restaurant; they should experience the same quality of food and service every time.” When things go wrong, the first instinct is to completely change your operation.  However, as discussed in Restaurants Know Thyself, staying the course and perfecting your operations will dampen down the volatility of the challenges faced.

Modification and flexibility are critical for restaurants to survive in this day and age. However, adapting to the times does not necessarily mean an overhaul of your entire concept.  An overreaction to big changes can often be an over correction! 

Don’t know where to begin?  Do you know how to adapt to industry changes in a timely manner so you can be as profitable as possible?  www.4qconsult.com can develop customized operational guidelines to meet your needs. 

All original content copyright Noelle E. Ifshin, 2015-2016.
Noelle E. Ifshin, President, 4Q Consulting, LLC 

Tuesday, June 16, 2015

Restaurant Consulting NYC | Seven Deadly Restaurant Sins | 4Q Consulting, LLC

Seven Deadly Restaurant Sins

Owning and running a successful, profitable restaurant is never easy.  When you break down restaurant business concepts into their lowest common denominator, you are left with the “3 P’s” - Product, People, and Process.  What is served, who serves it and how it is served should tell the customer the story of who you are and what your brand is.

The Seven Deadly Restaurant Sins are behaviors that get in the way or prevent you from properly executing the “3 P’s”.  The sins, if ingrained in your restaurant, can become barriers to change, growth and success.  

Think of the sins as “land mines” which must be avoided in order to be successful:

Greed – Greed can often get you into trouble as a business operator.  In a free market economy an operator wants to be as profitable as possible.  However, operators must also financially take care of their employees by offering them a fair wage, and their customers by providing excellent customer service and a product at a price the market will bear.  We have all read about famous restauranteurs who are sued for various reasons:  violating wage and hour laws; not distributing tips properly; underpaying illegal immigrant staff; price gouging tourists; adding gratuities to checks subjectively.  The cost of this greed, in the form of PR headaches, legal fees and loss of business is almost always greater than the few extra dollars you can collect. 

Gluttony – Gluttony is nearly synonymous with greed and is defined as “one given habitually to greedy and voracious [behaviors]; withholding from the needy”.  In business, gluttony can be very destructive; it is not knowing when enough is enough and profiting to the detriment of others.  Your business is a citizen of the community in which is exists; it is important to have a program that gives back to the community or to your employees. In larger companies, these types of programs can help attract top employee talent.  For small businesses, an out-reach program does not have to be expensive - simple, easy and workable are often best.  Try donating leftover food to community kitchens, or left over raw scraps to a company that makes mulch for a community garden; volunteer time for a local cause; sponsor the local little league team.  Involve your employees and get ideas from them about what is important them.  You will be seen as a good corporate citizen, which will pay you back in positive PR.

Pride – Pride is a double edged sword in the restaurant business.  Pride in your product and staff can be very useful to help you stand out in a crowded field, however pride can also act as a hindrance to improving your business.   Pride can prevent you from being able to: recognize when you are on the wrong track; change course in time to prevent a financial downfall; react to factors in the economy – such as rising food and commodity prices.  If you always look with a critical eye, you will always find ways to improve.

Sloth – Sloth is defined in Merriam-Webster’s dictionary as “reluctance to work or make an effort; laziness”.  Laziness in any business is the kiss of death, but especially in the restaurant industry.  Once laziness sets in, standards start to slip, corners get cut and consistency of product and service becomes non-existent.  The antidote to sloth is vigilance of even the smallest details.  It’s the little things you decide to ignore that add up, causing your standards to decline.  As we discussed in Consistency is King, “Customers should not have to spin the roulette wheel each time they visit your restaurant; they should experience the same quality of food and service every time.”

Wrath – Wrath is great anger that expresses itself in a desire to punish someone. Operators who yell, belittle and antagonize employees or customers won’t be open very long.  In today’s world where anything can be posted on line and go ‘viral’ overnight, an operator must be the utmost professional and lead by example at all times.  Once you have a reputation as being wrathful towards your employees, it will be very hard to recruit and keep top talent.  Customers will avoid restaurants where the owner or manager has a reputation for yelling at guests.  Your restaurant wouldn’t exist if not for the employees and customers, who should be treated as the valuable components of your business that they are.  If something is wrong with your business, look at yourself first.  The old proverb rings true here – “A fish rots from the head”.

Envy – Envy is a feeling of discontent or covetousness with regard to another's advantages, successes, and or possessions. The sin of envy in a restaurant is to covet other restaurants, to worry about what others are doing and not to focus on running your own business.  It makes you take your eye off the ball in your own operation, which in turn, can cause your downfall.  Owners must focus on making their restaurants the best they can be, whatever they are – if you own a hot dog stand, make it the best hot dog stand you can without being distracted by what the owner of a five star restaurant across the street is doing (or wearing, or driving).  With focus, you will be much more successful.

Lust – Lust in business is often seen in conjunction with envy.  To lust is to crave or desire something, often what others have.  It can be a lust for power, money, or material objects and, like envy, can lead to unscrupulous behaviors.  Lust can lead to not reporting all your cash income, taking kickbacks from vendors, ordering personal items through the business, and not being honest with your partners and investors about the business’s finances. Besides some of these actions being illegal, these behaviors drain resources and break the trust of those who count on you, putting obstacles in the way of building the business to the level of success it could achieve.

What all these sins have in common is that falling prey to them is shortsighted and they get in the way of flawlessly executing the “3 P’s” - People, Product and Process.  The restaurant business is not brain surgery!  At a basic level, restaurants should be able to provide an excellent product at a fair price through superior customer service.  Avoiding the Seven Deadly Restaurant Sins puts you on the path to building a sustainable, profitable, long-term business.

Don’t know where to begin?  Ask yourself, do you have the proper procedures and operational guidelines in place to help you be as successful as possible?  4Q Consulting can develop customized operational guidelines and training programs to meet your needs. Email us today for a free business consultation at www.4qconsult.com.

All original content copyright Noelle E. Ifshin, 2015.
Noelle E. Ifshin, President
4Q Consulting, LLC
244 5th Avenue, Suite 1430, NY, NY 10001  

Tuesday, February 10, 2015

Restaurant Consulting NYC | Why Cross Training and Creating Redundancy in your Restaurant Staff is Crucial to Success | 4Q Consulting, LLC

Why Cross Training and Creating Redundancy in your Restaurant Staff 
is Crucial to Success

As we discussed in A Well Trained Staff is Your Secret Weapon: “People run your business and your business is only as good as your people.  An effective training program is an owner’s key tool to ensure consistency in product and customer service, which is a basic tenet of running a restaurant.”  

The restaurant business is a team sport which has specialists in certain positions – i.e. bartenders, servers, line cooks, etc.  Each person on the team should know their role, be trained for their specific job and know how it fits into the team as a whole.  However, what happens when the only manager who knows how to close calls out sick or you are under staffed and no one is cross trained? It becomes increasingly difficult to run a successful restaurant when you have no redundancy.

Here are four reasons why redundancy and cross-training in your restaurant staff is crucial to your business:

Better Productivity – Cost and insufficient time are often cited as reasons why restaurants do not take the time to set up cross-training programs.  Though it may increase your overall training costs, to train multiple people to do multiple jobs, you reap the benefit when pressed into action.  Employees and managers who are properly cross-trained can increase your restaurant’s productivity because it allows you to make changes without disrupting service. We tell our clients that it is more costly, in the long run, to not cross-train your staff.  The cost comes in many forms, but mostly in a work force that is not as productive as possible, resulting in having to use more staff per shift, expensive mistakes being made by untrained stand-ins and the possibility of a poor customer service experience for your guests.

Better Product Quality through Consistency – As we examined in Consistency is King, “Customers should not have to spin the roulette wheel each time they visit your restaurant; they should experience the same quality of food and service every time.  It should not matter which chef or server is working on any given day, the customer experience should never be a surprise.”  We have all been to a restaurant that was great one day and then only so-so the next time around.  Whether the staff line-up has changed due to growing the business or people calling out sick, you must have bench strength in your ranks, this way no one can tell that the Sous Chef is cooking instead of your Executive Chef on any given night.  Consistency is the key to establishing regular clientele, and regular clients are the most important customers to have.    Maintaining regular clientele is a critical factor in establishing a solid reputation that will attract newcomers.

Better Employee Retention – There are many reasons why employees leave jobs; high on the list is becoming frustrated or bored in a job.  Assuming you've done everything correctly during the on-boarding process, yet you are still having large amounts of turnover, it is time to look at what type of advancement and cross-training opportunities you provide your employees.  Cross-training also helps to engage the long-time employee who feels that they are no longer learning anything and feels that the restaurant doesn't invest in furthering their knowledge.  At a basic level, human beings like to feel that they are continually learning new skills and will acknowledge management’s investment in them by staying with the company.

Better Financial Results– Improved productivity, product quality and employee retention should all lead to organic cost savings.  These savings, in the long run, will offset the initial costs to cross-train all of your staff.  By being able to achieve the first three “betterments” stated above, you will be able to: reduce production steps and/or mistakes; run your business leaner; make time-effective market-driven changes; focus on cultivating on-going, repeat business; and lower your recruiting and hiring costs.

You must start by setting training expectations with your management team. Often chefs and managers do not want to train their staff to do their job, for fear that they will be replaced, so they leave out crucial steps or ingredients that are key to a great product or service.  They must understand that they are only as successful as those they train underneath them, and they can only grow in their careers if there is someone “on the bench” ready to go!  Take your best people and encourage them to share their most developed skills: Make teaching a badge of honor for employees who achieve an elite level of competence.

By focusing on cross-training your staff and building in redundancy, you can create a place where teamwork can thrive, your employees are invested and are continually learning.  

Don’t know where to begin?  4Q Consulting can develop customized business and operational guidelines to help you start and run your business.  Email us today for a free business consultation at www.4qconsult.com.

All original content copyright Noelle E. Ifshin, 2014-2015.
Noelle E. Ifshin, President, 4Q Consulting, LLC 
244 5th Avenue, Suite 1430, NY, NY 10001

Wednesday, December 31, 2014

Restaurant Consulting NYC | Happy New Year! | 4Q Consulting, LLC

Best Wishes 

for a Happy New Year 

filled with Health, Happiness 

and Spectacular Success 

from all of us at 4Q Consulting, LLC

4Q Consulting can develop customized business and 
operational guidelines to help you start and run your business. 
 Email us today for a free business consultation at www.4qconsult.com.

All original content copyright Noelle E. Ifshin, 2014-2015.