In a restaurant, there’s always something that needs to be done. Maybe it’s organizing the walk-in, folding the napkins for the front of the house, or reworking the menus. As a restaurant owner or manager, sometimes you may need to jump in to help keep business running smoothly.
However, the day-to-day tasks can distract from the bigger-picture work that is essential for your long-term business health: restaurant operations management.
The common saying is that owners and operators need to work “on,” not “in,” their restaurant. Of course, being active on the floor, interacting with your team and your customers, is important. However, it is also valuable to spend time strategically planning for the efficiency of your restaurant.
Intentional, informed goals and processes are the core of successful operations. Operations management involves designing the systems that not only save you time and energy, but that also ultimately add to your bottom line.
What is restaurant operations management?
Operations management is the oversight of all of the major areas of your restaurant business. It touches everything that is critical to the restaurant running smoothly, from how you schedule your staff to properly managing your inventory.
Your restaurant may be functioning fine on a daily basis, but inefficiencies in the short-term eventually become entrenched, persistent issues. Improper scheduling with your staffing can lead to ballooning labor costs over time. Daily issues with your inventory control can lead to food waste levels that skew your monthly margins. Ineffective restaurant hiring practices lead to high turnover and poor team cohesion. The list of operational challenges goes on and on.
A restaurant operations management strategy is key to the long-term health of your business. By constantly tweaking your operations, you work toward achieving efficiency throughout the entire business.
How to improve restaurant operations management
Successful companies, in any industry, are always innovating. While it takes time and resources on the front end to improve your restaurant operations, every efficiency you can add into your operations boosts your profitability. Taking the time to step back and make an entire system more efficient is well-worth the investment.
As there are new developments in restaurant operations software, there is more opportunity than ever to apply powerful tools to your operations management. Restaurant management software can allow you to automate and streamline tasks that used to be manual. With the efficiencies of these systems, you have the opportunity to spend more time fine-tuning restaurant operations—with data in hand.
To improve restaurant operations management, start by examining the following areas to refine your operational processes:
1. Manage Restaurant Food Inventory
Your inventory is a great place to start analyzing your operations. Restaurants carry lots of inventory that is perishable, so an investment in inventory can quickly be wasted if it isn’t managed correctly. In addition, since your food inventory is closely related to your restaurant cash flow, operational oversight of your inventory is especially important in an uncertain economy.
To establish better management for your food inventory, start with a fully-integrated inventory management system. Accurate inventory management requires data from many different sources, like your Point of Sale (POS), inventory counts by staff and invoices from vendor relationships.
An all-in-one solution allows you to track the short-term and long-term trends in your food inventory by bringing together all the data in one place. When you have full transparency into your inventory numbers, you are able to make informed decisions about the state of your operations.
2. Reduce Your Food Cost
After proper inventory control, another effective way to manage your food cost is to cut down on your food waste. For restaurants, when ingredients go to waste in the kitchen, it’s like throwing away part of your profit. Monitoring your inventory usage, portion sizing, and recipe measurements protects your bottom line.
Your operational management for food cost may include tools like actual vs theoretical food cost tracking, or implementing waste tracking sheets in the kitchen. The goal is to understand what is happening with your purchasing, as well as your back of house inventory usage. When you are able to track your food cost, you can implement adjustments in your ordering or kitchen staff training.
In addition to minimizing food waste, consider taking a look at other potential food cost issues. Automated tools from your restaurant management software can help you monitor vendor contract pricing, proactively responding to contract violations. Reducing your food cost can also come from staying ahead of internal management issues, such as shrinkage (theft) or breakage.
3. Reduce Your Restaurant Labor Cost
Besides your food cost, your restaurant’s other major operating expense is your labor budget. Optimizing labor is a notoriously difficult task, because you need to consider a mix of operational issues, customer service standards, staff needs, and complex labor laws.
However, one of the most important tools for reducing your labor costs is to leverage your sales forecasting. These projections rely on historical sales data from comparable time periods, along with other general economic trends, to predict future sales levels. If your POS, scheduling software, and restaurant accounting software are integrated, sales forecasting can be an automated, data-driven process.
Sales forecasts allow you to examine your labor cost on a granular level. With information about sales trends and even details broken down by the day part, you can make informed decisions about how to effectively allocate your labor.
4. Standardize Your Employee Hiring and Onboarding Process
Any restaurant owner or manager knows that when it comes time to hiring employees, the entire process can be extremely time-consuming. Finding candidates by manually posting jobs and sorting through applications the old-fashioned way is tedious, and it doesn’t always give the best results.
Today, there is technology that can cast a wider net, quickly filter for the best candidates, and aid in the evaluation process. Leveraging these technology tools can help you optimize your restaurant hiring operations.
When it comes time to attracting, hiring, onboarding and paying employees, developments in restaurant payroll and HR software are also resulting in operational efficiencies. For example, HR software can help employees submit paperwork like their W-4, I-9, and E-Verify before they even have their first day, so they can hit the ground running.
As part of the onboarding process, it’s essential to document your training. If your new hires are fully trained on standard processes, you prevent inefficiencies that can add up in the long term. In addition, your new employees will be more invested if they fully understand the “why” behind your restaurant’s policies, improving your retention rate over time.
5. Standardize Your Reporting
Finally, although you may be getting data from your restaurant management software, are you getting helpful, actionable insights from your reporting?
Standardizing your reporting can help in every area of your restaurant operations. Your restaurant reporting software should give you a full overview of every element of your business. In addition, any reporting software should seamlessly integrate with any other systems that you use. Time spent manually importing and exporting information is time that isn’t spent actually making helpful operational changes.
Reporting is growing increasingly useful for operations management. In the past, many restaurants relied on bookkeeping to understand what was happening in their business. However, this was “rear mirror” reporting, covering what happened in the business over the previous week, month, or quarter.
Today’s reporting tools can show you what’s happening in your restaurant in real time. Timely numbers inform your operations management in the moment, and you can make well-informed decisions fueled by data.
Finally, advanced reporting tools allow all stakeholders to drill down into vendor- and check-level detail, eliminating requests for this data from the accounting team.
Operations management will always take time to implement on the front end, but the long-term payout is worth the investment. Restaurant operations management is essential for an industry with notoriously thin margins and little room for error. Your investment in operations management can be the key to long-term business health.
Are you interested in implementing more operations management strategies? Restaurant365 incorporates restaurant accounting software, restaurant operations software, inventory management software, payroll + HR software, and scheduling software into an all-in-one, cloud-based platform that’s fully integrated with your POS system, as well as to your food and beverage vendors, and bank. Ask for a free demo of Restaurant365 today.