20 dollar money

During a recent discussion with a restaurant franchisee, the issue of profitability came up. As he put it, the restaurant business has three basic levers that the owner/management can control: food sales, food costs, and labor costs. I call these the trifecta of restaurant profitability since you simultaneously need to get all three correct. (Ok, food and labor costs are prime costs, so technically it should be called exacta or perfecta of restaurant profitability. I wouldn’t describe most restaurants as exact or perfect. So I went with trifecta.)

These are so important, but when was the last time you looked at them in your restaurant?

Here’s a simple suggestion for each to get you started.

  • Food Costs
    Create a simple sheet that tracks throwaways daily. The restaurant franchisee found $75 a day in savings here.
  • Labor Costs
    Pick a day of the week and look at the staffing verses the sales. Is there an extra hand here?
  • Food Sales
    Pick the five most popular items on your menu. Does your wait staff consistency upsell add-ons for these entrees (assuming it makes sense)?

Thaddeus

P.S. We are working on a product to make the management of the trifecta much easier. More on that in 2013.

 

Photo credits: Money Shots Ver4 by StockMonkeys.com Creative Commons Attribution 2.0 Generic License

ruler

Q: Is bigger better?

A: Not when it comes to tablets and wait staff. Even in Texas.

Q: Why?

A: Imagine you are waiter or waitress using a wireless tablet to take guest orders. Your choices are a ten inch, seven inch, or four inch device. More specifically visualize your choices as an iPad, iPad mini, iTouch, if prefer Apple products, or a Nexus 10, Nexus 7, Nexus 4, if you prefer Google Android products.
Which would you rather carry around all shift? A heavier one or a lighter one? Which is easier to drop? Which is more expensive? Which fits in your apron?

Q: Sounds like smaller is better!

A: Not quite. It turns out the larger the screen real estate, the easier it is create an order since there is less scrolling and hunting.

Q: So bigger is better! I knew it.

A: Again not quite.  Smaller screens are less taxing physically over a long shift due to their smaller weight.

Q: So which is it?

A: As big as possible to make it easier to perform tasks, but not so big as to be physically taxing. The Goldilocks size for wait staff is right in the middle, a seven inch tablet. It’s about the same size as a check presenter and fits in the apron when not in use.

Q: That makes sense. I was rooting for bigger though.

A: If it makes you feel better, for host stands and other fixed locations we recommend ten inch tablets since they are not carried and it’s not physically taxing. So bigger is better there. But for table side guest ordering seven inch tablets is the way to go.

Thaddeus

 

Photo credits: Ruler by Sterlic Creative Commons Attribution 2.0 Generic License


Last month I explained how TripAdvisor and similar review sites dramatically changed the travel and restaurant business. The power of information has shifted from producers to consumers. The take away for restaurants is that every sale becomes a relationship sale since potential customers will draw on the experience of other customers.

So how do you manage TripAdvisor and other review sites?

My thanks to Marco, the owner of the fantastic Marco G in Rome, Italy for sharing his experiences and providing some of these tips. His amazing restaurant has been ranked #1 in Rome on TripAdvisor and is frequently in the top 25 for Rome. Here’s the Marco G TripAdvisor Listing. TripAdvisor drives new traffic to his restaurant in part because of his high rankings.

Basic Tips

  1. Claim your restaurant
    Go to the websites for TripAdvisor, Yelp, UrbanSpoon, CitySearch, Zagat, Google Local Reviews, Yellow Pages, Super Pages and your local alternative paper review page and claim ownership of your restaurant. How do you know which sites to go to? The same way consumers will. Go to http://www.google.com and search on your restaurant name and city name and “reviews”. e.g. Marco G Rome Reviews.
  2. Join the conversation
    Check your reviews and respond. Starting out, just pick a day of a week to do reviews and add it to your weekly schedule. Yes, you are already busy, but these are customers who are talking directly to the rest of the world. About your restaurant! In other words, a customer is telling another potential customer about your restaurant and you get to add your two cents to that conversation. Shouldn’t you make the time for that?
  3. Be authentic
    Be yourself and human. Respond as if you are the manager/owner working the floor and a customer flagged you to tell you about your restaurant.
  4. Use the feedback
    Reviews are a free way to get feedback on your restaurant. They are like comment cards, but instead they are public. Use the feedback from them in the same way.

Advanced Tips

  1. Rankings
    Don’t chase your ranking/stars. Some days you will be up and some days you will be down. Obsessing about why you went up a notch or went down will drive you nuts.
  2. Top rating and reservations
    If do you become a top twenty-five rated restaurant in a market, don’t take reservations six months out. This one didn’t originally make sense to me, but according to Marco if you become highly ranked, people will reserve a spot at your restaurant for a few months out when they “plan” to visit. Often their travel plans fall through or your rankings dip, so they don’t show.
  3. Respond to negative reviews
    Respond to every review, especially negative ones. If a potential consumer sees a negative review that isn’t responded to, it is implied that it’s true.
  4. It depends
    How do you respond to negative reviews? Imagine you are on the floor and a customer tells you the food, service, decor, or something else is horrible. How do you respond? It depends. You have to use your judgment. In the same way that some customers try to get free meals by putting hair in their food, there is the SOB around the corner that wants to bash your restaurant. Fortunately, most consumers aren’t stupid and will read between the lines of what a reviewer is saying. If the reviewer has an agenda it often shows through. Moreover, potential consumers will take into consideration the sum of all the positive and negative reviews, so don’t take any one review personally.

This list should be enough to get you started with managing your review site listings. If you have other great suggestions please share them in the comments.

Thaddeus

Photo credits: TripAdvisor Logo & TripAdvisor name © 2012 TripAdvisor LLC. Screenshot of TripAdvisor website used under Fair Use commentary and education.

Paris France

I spent most of May visiting European cities and sampling their amazing cuisine. It was not all fun and games though. Right out of the gate, I made a rookie dining mistake. At a tourist trap restaurant in Paris, I literally got ill after eating one of the worst meals of life. Not a great way to start a month long trip. I vowed not to repeat that mistake again. If only I had a guide to tell me what to avoid and what to seek out. The Lonely Planet Guide book was awesome but only covered a few places I might eat at.

Enter TripAdvisor. http://www.tripadvisor.com/Restaurants For those not familiar, it’s a site with a five step rating review system for restaurants, hotels, and attractions. The reviews and ratings are created by travelers for travelers.  I downloaded their mobile app for each city I went to. It showed which restaurants were great and which were horrible tourist traps. I ate fantastically, and more importantly never got sick again. My health thanks you TripAdvisor. (Disclosure: I have no business relationship with TripAdvisor other than I’ve used their website and mobile apps.)

As a restaurateur, why should you care about one person’s travel misadventures?

Because, pardon the pun, it means the tables are turned. Previously, for travelers (the consumers), the balance of power resided with the local restaurants (the producers). For the most glaring example look at the overpriced tourist trap restaurants like the one I got sick at. The fleeced travelers could only tell a few other travelers about their experiences. It was too difficult to warn all potential travelers, so the tourist trap restaurants continued to survive. With Internet based sites like TripAdvisor, Yelp, UrbanSpoon, CitySearch, Google Local Reviews, and others, the power of information has shifted from producer to consumer. Now the traveler can be forewarned and forearmed with knowledge. The days of fleecing unsuspecting tourists are drawing to a close or at least a lot tougher.

The biggest take away for restaurateurs is this. Now every sale is a relationship sale. I used the dining experiences of strangers I’ve never met to pick where to eat. Before my knowledge was limited to my circle of friends and acquaintances. Now, not so much. The grape vine that customers can use to tell others about their dining experience just got much larger.

So how do we manage this new medium? Next month we’ll pass on lessons learned from a successful restaurateur in Rome, Italy.

Thaddeus
 

Photo credits: Copyright © 2012 Cloud Dine Systems, LLC. All rights reserved.
Untitled by Neil Conway, on Flickr

Q: So what does Cloud Dine Systems do?

A: We make mobile restaurant management systems that increase staff efficiency and increase restaurant profitability. Our first product is a restaurant point of sale system using wireless tablets and cloud services.

Q: Could you give me an example of what that means? And use non-marketing speak please.

A: Sure. Sorry about that. Here’s a 1 minute example of one thing we do. (Hi, I’m Thaddeus, founder of Cloud Dine Systems. Thanks for visiting by the way.)

Q: Ok. You got a minute starting now.

A: Think of your favorite restaurant. Think how busy and hectic it is during the dinner rush. That’s just the wait & bus staff you see in the front of the house. Lots of running back and forth.

Q: I get it. Very busy. 45 seconds.

A: A server does this for every order: Get order from customer. Write order on paper. Walk over to point of sale terminal. Wait till free. Enter order. Order prints in kitchen.

Q: Sounds like all the restaurants I know. 30 seconds. 

A: We made a point of sale system that wait staff take to the table with them. It uses wireless tablets. Ordering is now: Get order from customer. Enter order on tablet. Order prints in kitchen.

Q: Wow! Wait staff will love you. Their feet will kiss you, if they could. 15 seconds. 

A: Even better, with the extra time wait staff can serve more tables and provide quicker service with better accuracy. (Plus no more running back to the table apologizing about being out of the special.) Better customer dinning experiences means increased tips = Happier wait staff. Serving more tables reduces the cost to serve each customer. A more profitable restaurant = Happier owners and managers.

Q: Ah. Now I see what you do.


Photo credits: Untitled by Neil Conway Creative Commons Attribution 2.0 Generic License