Guaranteed Ways to Make Your Restaurant More Profitable

DAILY OPERATIONS

1. Watching​ ​your​ ​food​ ​costs​ ​weekly​ ​instead​ ​of​ ​monthly ● During inflation with grocery price increases of 30% over the past 2 years, it is important like never before to watch your prices like a hawk. Most ​restaurants​ ​overpay​ ​their​ ​vendors. The vendors often raise their prices in expectation for shortages or other supply interruptions even if these shortages never happen. While most vendors would reduce their prices to match the market, not all vendors are quick to change back...especially if you have never questioned your vendor's pricing before.

​Instead​ ​of​ ​looking​ ​at prices​ ​monthly​ ​when​ ​catching​ ​price​ ​increases​,​ ​watch​ ​your prices​ ​weekly​ ​to​ ​catch​ ​changes​ ​that​ ​could​ ​decrease​ ​your​ ​profits and adjust accordingly. Either negotiate with vendors or raise your menu prices.

2. Use​ ​recipe​ ​costing​ ​and​ ​price​ ​your​ ​menu​ ​for​ ​profitability ● Doing​ ​a​ ​recipe​ ​plate​ ​costing​ ​ ​allows​ ​your​ ​culinary​ ​genius​ ​to​ ​translate into​ ​financial​ ​delight.​ ​We​ ​recommend​ ​checking​ ​menu​ ​profitability​ with your bookkeeper at least periodically. Your restaurant bookkeeper should know how to cost out dishes. Net yields of each item, converting different units of measurements and arriving at a cost of a dish is something that requires some experience and a unique ken of knowledge. Generally, the cost of a dish should not exceed 25% - 30%. However, it is different for each dish type, salads usually have much lower cost to sales ratio and a good employee should know how to upsell and offer higher margin dishes.​ Curious? Contact us now...

3. Know​ ​your​ ​Prime​ ​Cost​ ​and​ ​calculate​ ​it​ regularly ● Prime​ ​cost​ ​should be ​your​ ​#1​ ​KPI.​ ​It​ ​includes​ ​all​ ​those things​ ​you​ ​pay​ ​for​ ​on​ ​a​ ​day-to-day​ ​basis​ ​that​ ​keep​ ​your​ ​restaurant​ ​running, namely Labor + Food Cost. Basically,​ ​it’s​ ​the​ ​products​ ​and​ ​people​ ​power​ ​needed​ ​to​ ​keep​ ​you​ ​in​ ​business.

4. Perform​ ​quarterly​ ​supplier​ ​reviews​ ​and​ ​compare​ ​supplier​ ​pricing​ ​to​ ​local​ ​and national​ ​prices ● If​ ​you’re​ ​not​ ​performing​ ​ ​supplier​ ​review,​ ​you’re​ ​missing​ ​the​ ​boat. It’s​ ​your​ ​opportunity​ ​to​ ​talk​ ​to​ ​your​ vendors​ ​about​ ​quality,​ ​prices and terms.​ ​Take​ ​control​ ​of​ ​your​ ​food​ ​costs​ ​by​ ​​sitting​ ​down​ ​with​ ​your​ ​vendors semi-annually​,​ ​asking​ ​for​ ​price​ cuts ​on​ most popular and valuable inventory items. Have your bookkeeper prepare a descending dollar report for all your vendor purchases. General rule of thumb, the top 20% of your purchased items are responsible for 80% of cost. So, it's worth digging in.

5. Create​ ​a​ ​baseline​ ​price​ ​for​ ​your​ ​most​ ​common​ ​ingredients,​ ​so​ ​you​ ​can​ ​easily catch​ ​price​ ​spikes/jumps ● Understanding​ ​your​ ​food​ ​costs​ ​is​ ​a​ ​top​ ​priority​ ​for​ ​your​ ​restaurant.​ ​Create​ ​a baseline​ ​price​ ​for​ ​ingredients​ ​based​ ​on​ ​market​ ​research​ ​and​ ​prior​ ​supplier purchases.​ ​Use​ ​this​ ​to​ ​​catch​ ​supplier​ ​pricing​ ​increases​ ​that​ ​eat​ ​into​ ​your profits​.

ACCOUNTING

6. Get rid of ​paper​ ​invoices​ ​and​ ​automate​ ​your​ ​invoicing​ ​processes ● Greasy invoices​ ​are​ ​a​ ​messy​ ​stack​ ​of​ ​environmental waste, ​not to mention an ​endless​ ​data​ ​entry.​ ​They​ ​are also​ ​a​ ​massive​ ​time​ ​suck.​ ​Automate​ ​the​ ​process.​ ​Throw​ ​away​ ​the​ ​boxes​ ​of invoices.​ ​​​Capture​ ​and​ ​record​ ​invoice​ ​images,​ ​dollar​ ​amounts,​ ​line​ ​item​ ​detail, and​ ​all​ ​your​ ​existing​ ​supplier​ ​information​ ​​with KPI Accounting.

7. Use​ ​a​ ​4-week​ ​accounting​ ​period​ ​instead​ ​of​ ​monthly ● Instead of using ​the​ ​typical​ ​12-month​ ​calendar as most businesses do,​ ​the​ ​​4-week​ ​accounting​ ​cycle​​ ​consisting​ ​of 13​ ​accounting​ ​periods​ ​of​ ​exactly​ ​4​ ​weeks​ ​(28​ ​days) is more appropriate for restaurants,​ ​which​ ​syncs with ​the weekly​ ​cycles​ ​used​ ​in​ ​most​ ​restaurants​ ​and​ ​provides​ ​for​ ​more​ meaningful period​ ​comparisons​ ​on​ ​your P&L.

8. Review​ ​your​ ​accounting​ ​on​ ​an​ ​accrual​ ​basis​ ​instead​ ​of​ ​a​ ​cash​ ​basis ● Accrual​ ​basis​ ​accounting​​ ​gives​ ​you​ ​a​ ​more​ ​realistic idea​ ​of​ ​income​ ​and​ ​expenses​ ​during​ ​a​ ​period​ ​of​ ​time,​ ​therefore​ ​providing​ ​a long-term​ ​picture​ ​of​ ​the​ ​business​ ​that​ ​cash​ ​accounting​ ​can’t​ ​provide. Cash basis should not be used if you have AP (bills from vendors) or AR (Invoicing customers for catering ).

9. Reconcile​ ​bank​ ​and​ ​credit​ ​card​ ​balances​ ​every​ ​month ● Reconciling​ ​bank and clearing accounts monthly ​ensures​ ​that​ ​common​ ​errors​, omissions ​are​ ​corrected​​ ​in your​ QBO ​as​ ​the​ ​year​ marches on.​ ​No​ ​one​ ​enjoys​ ​the​ ​daunting​ ​task of​ ​cleaning​ ​up​ ​12​ ​months’​ ​worth​ ​of​ ​transactions​ ​at​ ​the​ ​end​ ​of​ ​the​ ​year. Cleaning up or catching up books once-a-year is not only irresponsible but very costly anywhere from $2K - $10K depending on number of transactions, accounting processes and how detailed you need it to be. It makes much more sense to hire the bookkeeper to work on your books regularly which will ensure that all necessary tasks are completed regularly at the end of each period.

10. Choose​ ​an​ ​accountant​ ​who​ ​specializes​ ​in​ ​Food​ ​and​ ​Beverage ● Not​ ​all​ ​accountants​ ​are​ ​the​ ​same.​ ​The​ ​bookkeeper ​you​ ​hire​ ​to​ ​manage​ ​your restaurant’s​ ​books​ ​should​ ​have​ ​a​ ​thorough​ ​understanding​ ​of​ ​the​ ​industry​ ​and how​ ​to​ ​best​ ​serve​ ​your​ ​restaurant’s​ ​accounting​ ​needs.​ ​Need a restaurant bookkeeper, email KPI Accounting at david@kpiaccounting.com

11. Have your ​accountant​ ​allocate​ ​payroll​ ​between​ ​ ​(FOH) and​ ​(BOH)​ ​employees ● Breaking​ ​out​ ​payroll​ ​by​ ​specific​ ​roles​,​ ​such​ ​as​ cashiers,​ ​chefs,​ ​line​/prep ​cooks, dishwasher​ ​etc. allows​ ​for​ ​more​ detailed​ ​record​ ​keeping,​ ​which​ ​allows​ ​to see what areas need trimming

INVENTORY 12. Educate​ ​your​ ​staff​ ​on​ ​the​ ​importance​ ​of​ ​inventory​ ​and​ ​how​ ​to​ ​do​ ​it​ ​right ● Food​ ​costs​ ​typically​ ​account​ ​for​ ​around​ ​30%​ ​of​ ​a​ ​restaurant's​ ​budget.​ ​It’s important​ ​to​ ​educate​ ​your​ ​staff​ ​on​ ​why​ ​inventory​ ​is​ ​taken​ ​and​ ​the​ ​correct way​ ​to​ ​take​ ​count,​ ​whether​ ​that’s​ ​​through​ ​an​ ​app​​ ​or​ ​an​ ​​inventory​ ​count sheet​ (not recommended). Ask me to improve your inventory tracking processes.

13. Create​ ​a​ ​weekly​ ​or​ ​monthly​ ​inventory​ ​schedule ● By​ ​creating​ ​a​ ​daily,​ ​weekly,​ ​or​ ​monthly​ ​inventory​ ​schedule,​ ​you’re​ ​creating​ ​an expectation​ ​for​ ​your​ ​team.​ ​An​ ​inventory​ ​schedule​ ​also​ ​creates​ ​accountability for​ ​your​ ​inventory​ ​team:​ ​all​ ​inventory​ ​and​ ​shortages​ ​must​ ​be​ ​accounted​ ​for.

14. Identify​ ​one​ ​person​ ​to​ ​be​ ​your​ ​"receiver" ● By​ ​​designating ​a​ ​team​ ​member​ ​to​ ​be​ ​your​ ​receiver​,​ ​you​ ​can​ ​dramatically reduce​ ​inventory​ ​errors,​ ​increase​ ​efficiency,​ ​and​ ​lower​ ​your​ ​food cost.​ ​Not​ ​only should​ ​you​ ​train​ ​this​ ​person​ ​on​ ​how​ ​to​ ​effectively​ ​receive​ ​the​ ​products​ ​you order,​ ​they​ ​should​ ​also​ ​know​ ​how​ ​to​ ​code​ ​invoices,​ ​mark​ ​items​ ​missing,​ ​and how​ ​to​ ​redirect​ ​ordering​ ​when​ ​there​ ​are​ ​errors.

15. Assign​ ​employees​ ​to​ ​count​ ​and​ ​input​ ​inventory ● Similar​ ​to​ ​identifying​ ​one​ ​person​ ​as​ ​a​ ​receiver,​ ​employees​ ​should​ ​also​ ​be designated​ ​and​ ​assigned​ ​to​ ​your​ ​inventory​ ​team.​ ​Each​ ​employee​ ​on​ ​your inventory​ ​team​ ​will​ ​be​ ​held​ ​accountable​ ​by​ ​your​ ​receiver​ ​for​ ​any​ ​inventory count​ ​errors.

16. Hold​ ​less​ ​than​ ​1.5x​ ​your​ ​Cost​ ​of​ ​Goods​ ​Sold​ ​in​ ​inventory ● The​ ​Food and Beverage​ ​industry​ ​is​ ​cash dependent.​ ​You​ ​must​ ​have​ ​a​ tight grip ​on​ ​ordering and​ ​inventory​ ​attrition.​ ​​Hold​ ​less​ ​than​ ​1.5x​ ​your​ ​COGs​ ​in​ ​inventory​.​ ​Don't lock too much cash in a quickly spoiling inventory. Another downside of excessive inventory - theft. Using cookie analogy, ask yourself if it is easier to notice when one of 3 cookies disappears or 1 of 20?

17. Calculate​ ​your​ ​inventory​ ​COGS,​ ​usage,​ ​and​ ​days​ ​on​ ​hand ● You​ ​make​ ​important​ ​decisions​ ​about​ ​your​ ​restaurant’s​ ​future​ ​every​ ​day—and those​ ​​decisions​ ​should​ ​be​ ​based​ ​on​ ​data​.​ ​It’s​ ​important​ ​to​ ​have​ ​a​ ​real-time COGS,​ ​usage,​ ​and​ ​days​ ​on​ ​hand​ ​calculation.​ ​This​ ​helps​ ​you​ ​run​ ​your​ ​business more​ ​efficiently.

18. Watch out​ ​for​ ​significant​ ​increases​ ​or​ ​decreases​ ​in​ ​food​ ​usage ● Suppliers​ ​increase​ ​and​ ​decrease​ ​prices​ ​daily.​ ​Keep​ ​track​ ​of​ ​what​ ​prices​ ​you’ve paid​ ​in​ ​the​ ​past​ ​and​ ​compare​ ​those​ ​to​ ​market​ ​price.​ ​This​ ​can​ ​be​ ​done​ ​with​ ​a spreadsheet​ ​or​ ​inventory​ ​app (recommended)

19. Perform​ ​daily​ ​spot​ ​checks​ ​on​ ​your​ ​most​ ​popular​ ​and/or​ ​expensive​ ​items ● Spot​ ​checks​ ​are​ ​an​ ​easy​ ​way​ ​to​ catch theft by employees or ​proactively​ ​prevent​ ​having​ ​to​ ​86​ ​a​ ​dish​ ​or​ ​tell your​ ​loyal​ ​customer​ ​you’re​ ​out​ ​of​ ​his​ ​favorite​ ​appetizer.​ ​In​ ​between​ ​your weekly​ ​inventories,​ ​​perform​ ​daily​ ​spot​ ​checks​ ​on​ ​your​ ​most​ ​popular​ ​items.​ ​It​ ​will​ ​help​ ​you​ ​stop​ ​shortages​ ​before​ ​they​ ​get​ ​out​ ​of hand.

CUSTOMER​ ​SERVICE​ ​&​ ​HOSPITALITY

20. Make​ ​sure​ ​your​ ​manager​ ​or​ ​GM​ ​is​ ​visible​ ​and​ ​interacts​ ​with​ ​guests​ ​ ● Your​ ​manager​ ​or​ ​general​ ​manager​ ​needs to be available for ​guests​ ​and employees.​ ​Train​ ​them​ ​to​ ​interact​ ​with​ ​guests​ regularly.​ ​A​ ​simple​ ​“Is​ ​everything going​ ​okay?”​ ​or​ ​“Do​ ​you​ ​need​ ​anything​ ​else?”​ ​can​ ​go​ ​a​ ​long​ ​way​ ​for​ ​customer service.​ ​

21. Assign​ ​ownership​ ​of​ ​online​ ​review​ ​sites​ ​to​ ​a​ ​reliable,​ ​customer​ ​service-centric employee ● Online​ ​review​ ​sites,​ ​such​ ​as​ ​​Yelp​​ ​or​ ​​Google​ ​Maps​,​ ​are​ ​often​ ​the​ ​first​ ​place someone​ ​checks​ ​when​ ​looking​ ​at​ ​ratings and reviews.​ ​Designate ​reviews​ ​to​ ​a​ ​reliable,​ ​customer​ -centric​ ​employee and​ ​make​ ​sure​ ​all​ complains​ ​are​ ​addressed properly and timely. Important -Take time to thank customers for positive feedback.

22. Handle​ ​all​ ​guest​ ​complaints​ ​in​ ​a​ ​timely​ ​fashion​ ​(daily​ ​or​ ​weekly) ● It’s​ ​important​ ​someone​ ​on​ ​your​ ​team​ ​reads​ ​and​ ​interacts​ ​with​ ​all​ ​complaints in​ ​a​ ​timely​ ​fashion.​ ​Consider​ ​complaints a​ ​new chance​ ​to​ ​redress​ ​the​ ​situation and convert a disgruntled customer into a loyal patron. ​It​ ​takes​ ​a​ ​lot​ ​of​ ​work,​ ​patience,​ ​and creativity​ ​to​ ​do​ ​it​ ​consistently​ ​each​ ​week.​ ​If​ ​a​ ​customer​ ​leaves​ ​a​ ​review,​ ​then there’s​ ​an​ ​expectation​ ​of engagement​ ​on​ ​the​ ​part​ ​of​ ​the​ ​business.​ ​A response​ ​is​ not optional,​ ​regardless​ ​of​ ​the​ ​content,​ ​its nature,​ ​or​ ​length​ ​of​ ​the​ ​review.

23. Keep​ ​your​ ​dining​ ​areas​ clean ● It​ ​goes​ ​without​ ​saying​ ​that​ ​a​ ​dining​ ​area​ ​should​ ​always​ ​be​ ​tidy, clean, disinfected.​ ​The dining​ ​area​ ​is​ ​the​ ​face​ ​of​ ​your​ ​business.​ ​​Create​ ​ ​daily,​ ​weekly checklist​s​ ​for​ ​both​ FOH​ ​and​ BOH.

24 Make sure to have a ​signature​ ​dish​ ​on​ ​your​ ​menu ● Customers​ ​increasingly​ ​want​ ​to​ ​enjoy​ ​something​ ​they​ ​can​ ​share​ ​with​ ​others, and​ ​​signature​ ​dishes​ ​give​ ​them​ ​that​ ​kind​ ​of​ ​unique​ ​experience​.​ ​Signature dishes​ ​often create​ a buzz ​and​ ​word-of-mouth​ ​traffic.​ ​It’s​ ​a win-win​ ​for​ ​both​ ​the​ ​restaurant​ ​and​ ​the​ ​customer.

25. Update​ ​your​ ​delivery​ ​and​ ​online​ ​ordering​ ​software ● Door​ ​Dash, UberEats, Grubhub...​ ​they’re​ ​not the new thing anymore.​ ​If​ ​you​ ​haven’t updated​ ​your​ ​ordering​ ​software​ ​to​ ​be​ ​compatible​ ​with​ ​delivery​ ​services, you’re​ ​missing​ ​out​ ​on​ ​this​ ​ ​avenue...​ ​​on average you can expect at least 10% increase in sales when employing third party delivery platforms. Be aware of different treatments of sales tax by Doordash vs UberEats. One collects and remits on your behalf while another collects but sends backs for you to report and remit sales taxes.

EMPLOYEE​ ​MANAGEMENT 26. Hire​ ​employees​ ​who​ ​fit​ ​your​ ​restaurant’s​ ​culture ● Cultural​ ​fit​ ​means​ ​that​ ​employees'​ ​beliefs​ ​and values are in alignment​ ​with​ ​their​ ​employer's​ ​values​ ​and​ ​company​ ​culture.​ ​The​ ​first step​ ​in​ ​hiring​ ​for​ ​cultural​ ​fit​ ​is​ ​to​ ​be​ ​able​ ​to​ ​​relay​ ​what​ ​values,​ ​norms​ ​and practices​ ​define​ ​your​ ​business​.

27. Hire​ ​managers​ ​who​ ​reserve​ ​time​ ​to​ ​train​ ​and​ ​teach​ ​their​ ​team ● When​ ​hiring​ ​managers,​ ​it’s​ ​important​ ​you​ ​set​ ​the​ ​expectation of​ ​training​ ​staff.​ ​Make​ ​sure​ ​your​ ​managers​ ​are​ ​setting​ ​aside​ ​time​ ​every month​ ​or​ ​quarter​ ​to​ ​review​ ​training​ ​guidelines ​and​ ​evaluate​ ​performance.

28. Communicate​ ​with​ ​staff​ ​and​ ​ask​ ​for​ their ​feedback ● As​ ​the​ ​owner​ ​or​ ​GM ​of​ ​your​ ​restaurant,​ ​it’s​ ​important​ ​that​ ​you​ ​regularly communicate with​ ​your​ ​employees.​ ​What​ ​kind​ ​of​ ​feedback​ ​do​ ​they​ ​have​ ​for​ ​the​ ​restaurant? Use​ ​the​ ​feedback​ ​to​ ​make​ ​improvements​ ​when​ ​necessary.​

29. Hold​ ​quarterly​ ​training​ ​meetings​ ​for​ ​important​ ​restaurant​ ​processes ● Your​ ​employees​ will undoubtedly​ ​forget​ ​some​ ​of​ ​the​ ​training​ ​they​ ​went​ ​through. Hold​ ​quarterly​ ​training​ ​meetings​ ​to​ ​refresh​ ​their​ ​minds​ ​and​ ​get over​ ​the “​forgetting​ ​curve​”, keep abreast with trends and laws.

30. Train​ ​employees​ ​to​ ​offer​ ​quick​ ​service ● Set​ ​expectations:​ ​Do you track time from ​door​ ​to​ ​table?​ ​Time from placing order​ ​until food served?​ ​And​ ​how​ ​many​ ​times​ ​do​ ​they​ ​check​ ​with​ ​the​ ​customer​ ​during​ ​their meal?​ ​There’s​ ​no​ ​definitive ​answer,​ ​but​ ​set​ ​expectations​ ​for​ ​your​ employees ​and train​ ​them​ ​to​ ​offer​ ​quick​ ​service.

31. Make​ ​sure​ ​your​ ​delivery​ ​wait​ ​times​ ​are​ ​short ● Long​ ​delivery​ ​times...​ ​they’re​ ​almost​ ​as​ ​bad​ ​as​ ​86ing​ ​a customer.​ ​Set expectations​ ​for​ ​your​ ​delivery​ ​times​ ​and​ ​shorten​ ​the​ ​wait​ ​as​ ​much​ ​as possible.​ ​Customers​ ​ ​expect​ ​quick​ ​delivery...​ ​the​ ​longer​ ​they​ ​wait,​ ​the more likely they are to leave a damaging comment.

MARKETING

32. Make​ ​sure​ ​your​ ​website​ ​is​ ​updated​ ​regularly​, ​user-friendly and ADA compliant. ● In​ ​order​ ​to​ ​give​ ​your​ ​customers​ ​the​ ​best​ ​experience​ ​possible,​ ​make​ ​sure​ ​your website​ ​is​ ​updated​ ​regularly​,​ ​​user-friendly and ADA compliant

. 33. Schedule social media post​ ​at least twice a​ ​week​ ● Social​ ​media​ will help you ​build​ ​your​ ​recognition​ ​in​ ​the​ ​community,​ ​build​ ​a​ ​loyal following. Post​ ​content​ ​consistently ​and​ ​engage​ ​with​ ​your​ ​audience.​