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 

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  
www.4qconsult.com

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
www.4qconsult.com