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Audio Blog – Grow Restaurant Sales Through Better Operations

Below is the audio version of our very popular blog, The Only Way to Sustainably Grow Restaurant Sales is Through Better Operations.

Subscribe to our podcast Order Up – The Restaurant Ops Show on SoundCloud, iTunes, Stitcher, and Tunein.

Audio Blog – Interview with Ryan Gromfin The Restaurant Boss

The first Order Up – The Restaurant Ops Show interview is with The Restaurant Boss, Ryan Gromfin.

Ryan has vast experience in the industry and helps thousands of restaurant operators on a daily basis run better restaurants. He’s a great interview. Check it out below.

Subscribe to our podcast on the popular services: SoundCloud, iTunes, Stitcher, Tunein.

Reducing Food Costs and Running Safer Restaurants with Checklists

Busy Kitchen

Back in February we did a webinar with Ryan Gromfin, The Restaurant Boss, entitled Reducing Food Costs and Running Safer Restaurants. This is a straight training webinar on how to use restaurant checklists to run better operations and increase profits. Ryan is a cool dude and we kept it light with real world stories and examples. There is a special offer at the end of the webinar to schedule a meeting with us to discuss your restaurant checklist needs and to get some free coaching. We are honoring the pricing and the offers made in this webinar so if you want, you can sign-up and take advantage.

Please enjoy this webinar on using restaurant checklists to run better operations.

[embed]https://www.youtube.com/watch?v=CTCdYs5rlEc&feature=youtu.be[/embed]

If the webinar doesn’t load in your browser, click here to watch in YouTube.

We have made several enhancements to the Inspector since this webinar was recorded, to see the latest functionality I invite you to click here to watch a short two-minute overview video.

The Only Way to Sustainably Grow Your Restaurant’s Sales is through Better Operations

Screenshot 2016-04-12 14.52.05

It’s time to return to basics and focus on what works for long-term sustainable sales growth, which is better operations.  Nobody wants to hear better operations because they are either delusional about the current state of their operations, or they don’t want to put in the hard work and discipline of focusing on running better operations.

Nothing that you will do, no new system (delivery or take out), no new technology like a better POS or better website, is going to do more for your business than having delicious food, in clean well-managed restaurants, with great customer service.  NOTHING!!!!  If you didn’t want to be an operator and focus on being excellent, then this isn’t the business for you.

I was the dining room floor manager of a busy restaurant in 2001 we added $80,000 a week to revenue over a ten month period.  That is right 80K a week, not a month, and we didn’t spend an extra dollar in marketing nor did we add any new sales channel.  You know how we did it:

  • Moved the servers from 5 tables to 4 table stations- which all the servers hated at first.
  • We started using checklists to ensure that we were ready in the FOH for each shift, this included pre-shift meetings with the team.
  • We actively managed the dining room each shift focusing on service and turning tables.

You see we had latent demand that before we focused on operations we weren’t getting because our service was slow and quite frankly not that good.  When we made the sections smaller, brought in more servers, invested in training those servers on the menu, customer service, upselling, etc.  They had more time to do a better job servicing guests.  When we focused each shift on making sure that the restaurant and the team were ready, it was easier to wow guests.  I’m not telling you anything that you don’t already know; better operations, focusing on the little things, and providing an excellent experience is your best marketing initiative and the quickest way to grow sales.

Here is some information that provides more evidence to the better operations theory:

  • A 1-star increase on Yelp leads to 5 to 9% revenue increase.  Entrepreneur.com
  • One negative review on Yelp can cost you, 30 customers.  Entrepreneur.com
  • An A grade in your window, for those restaurants that have to contend with health inspection letter grades, can lead to a 5.7% bump in sales.  (Based on California Sales Tax Data for LA County)
  • Only 16% of Yelp reviews are fraudulent so don’t assume that every bad review you have is just a competitor out to get you – respond quickly and appropriately.  Entrepreneur.com
  • According to a recent study by AlixPartners, a global business consulting firm, “28 percent of diners surveyed say they would never eat at a chain affected by a food-safety outbreak, regardless of the geographic location of the outbreak.”  Tennessean
  • Olive Garden same-store sales are up 6.8%. This is what their CEO had to say:

“We’re just running better restaurants today,” Lee said during the company’s earnings call Tuesday. “I don’t think we should discount the importance of ensuring we’re properly staffed, our teams are properly motivated, simplifying the operation, reducing the size of the menu, processes and procedures.  NRN

“One of the things we’re focused on now is trying to keep things simple,” Lee said. “Simple is hard. Doing simple things every day is really hard. That’s what’s given us the biggest lift at Olive Garden. We’re not relying on promotional activity to drive business.”  NRN

Look at your experience in restaurants. The restaurants that serve delicious food with great service that are clean and well managed on average are much busier than their competitors who fall down in any of those areas.

There are so many outside factors affecting your restaurants every day, from minimum wages, weather, street construction, commodity prices, competition, shifting dining trends, government regulations, cook shortages, and social media to name few.  It can feel overwhelming.  How do you manage all of those outside factors and run your restaurant?  The answer is to control what you can control and react as best you can to outside forces.

If you know that you aren’t doing all that you could be doing in your business to run better operations, make a plan and start focusing 100% on your most critical issues and check them off the list one at a time.  

The quickest and most effective way to run better operations is also one of the easiest systems to implement:  checklists with follow-up.  Checklists focus your managers on those most important items each shift that have to be done to operate at your best.  They are self-documenting and easy to use.  By executing checklists every day in the same order, they build a routine and drive consistency shift to shift.  Checklists work, we asked 107 restaurant managers and owners recently if they thought that managing by checklist would help them run safer and better operating restaurants, and 107 of them said yes.

Most restaurants today have checklists in place, but they are conducted on paper, paper checklists make it impossible to hold your team accountable.  We recently conducted a survey and 94% of restaurant owners, and managers believed that their teams weren’t completing their checklists accurately.  94% of paper checklists are being pencil whipped and therefore the restaurant isn’t getting any of the benefits of safer and better operations because people aren’t conducting the checklist.

The key to getting the benefits of your checklists is to use a system like OpsAnalitica that can hold your managers accountable and make pencil whipping a thing of the past.  By simply moving your checklists to a tablet we can track start and end times, duration, and make the data available on any device from anywhere.  You will always know if your team is doing what they are supposed to be doing.

Better operations can increase your sales anywhere from 5 to 9%.  Checklists can play a major part in running better operations on a shift basis.  It is consistent daily execution that will yield the highest returns and generate those positive reviews and word of mouth recommendations that will grow sales organically and in a sustainable manner.

I invite you to check out OpsAnalitica by clicking here.  To see a list of the checklists that every restaurant should be doing, I invite you to check out this other blog post.

If you are interested in seeing OpsAnalitica in action click here to watch a recorded demo video.

The Value of Operations Data at Your Fingertips

Operations data are the data points that are generated every meal period in a restaurant that directly affect sales and profitability.  Let’s break it down:

  • Marketing activities remind your customers that you still exist. 
  • People come in to eat at your restaurant. 
  • You serve them food (operations)
  • They pay and leave either happy or sad, eager to share their experience with their friends or trash you on Yelp. 
Your restaurant’s operations: the food, service, speed, perceived value, cleanliness, and safety standards all determine how your guests will feel when they walk out of your establishment. 

Remember we are restaurant operators and operations are our business. Operations data points are the measurement of our operations. Until this time in the restaurant industry it has been next to impossible to capture, organize, and analyze operations data for even a single restaurant location never mind a national chain.

There are two main reasons for this, the first is that we aren’t a completely automated business. We are predominantly a human business where people, not automated machines are the means of production. Number two the technology didn’t exist or it was too expensive to capture the data.

With the invention of tablets and smart phones we now have powerful handheld devices that can be used to capture operations data. A smartphone used every day to consistently capture operations data can feed a data analysis initiative that can drive down waste and increase profitability.

In the spirit of ops data and running better operations we are giving away our ebook, SMART Inspections, Drive Big Data. Click here to get it delivered to your inbox.

I will leave you with this thought. As technology becomes more prevalent in the industry, the companies that can identify, test, and implement new solutions more quickly will have a distinct competitive advantage in the marketplace.

Maybe You Shouldn’t Do Checklists

How could paper checklists be bad?  Paper checklists are bad because people pencil whip them or lie on them.  We recently conducted a survey of over 100 restaurant owners and managers.  94% of respondents believed that their teams weren’t completing their checklists accurately.

Which raises the question; why would a sane person have their team complete checklists that they know are being lied on?

A sane person wouldn’t, because they know that it is a waste of time and money.  It costs money to develop checklists.  It costs money to print checklists.  It costs money to complete checklists.  It costs money to file and store checklists and when it is time to get rid of them it costs money to shred and recycle checklists.

Yet as an industry we do spend money to have people complete checklists on paper even though we know they are being pencil whipped. Why do we do that?

The limitations of paper checklists aside, the fact that we still have people pencil whipping checklists in our businesses is because even a 30% accurate checklist is better than no checklist.

Let’s stick with the thought that even a partially completed checklist is better than no checklist.  A person who completes a line check 30% accurately is still checking 30% more items than a person who skips their line check.  They have a better chance of catching an error in preparation or finding an unsafe item and correcting it before it get’s someone sick.

Imagine a world where restaurants employees completed all of their checklists accurately and when they didn’t you were at least able to catch that they didn’t and coach them about the importance of doing them correctly.  How much better would your restaurant run?

If every shift your team checked everything that was important enough to make it on a checklist.  They checked every temp, tasted items, checked sanitation and portion controls.  The restaurant when opened was clean and ready for guests.

Do you think that running better operations would translate into more sales, safer restaurants, happier guests, and most importantly more profits?

Of course running better ops would accomplish all of that.  If running better operations couldn’t do that then we wouldn’t spend a penny on training or any operational initiative, we would only spend money on marketing because the only way to get sales would be to con people to come to your restaurant one time.

By the way, this is what the restaurant managers and owners told us on our survey.  100% of them agreed that checklists could help them run better and safer operations.  That is right 100%.

Because checklists when completed diligently and followed-up on work.

The problem with paper checklists is that you can’t tell when they were started, when they ended, who did them, and if they were pencil whipped.  Basically paper cannot help you hold people accountable.  Also, this is for multi-unit owners who cannot be in every location every day, you can’t magically see paper hanging on a wall in a restaurant from your office.

What our industry needs is a checklist solution that is as easy to complete as paper checklists but allows us to hold our managers accountable and get visibility into our daily operations.

This solution would need to do the following things to be effective:

  • Needs to hold managers accountable by tracking time, location, response cadence, and  actual geo location.
  • Needs to be able to identify unsafe operating conditions and communicate that to management.
  • Needs to as easy as paper to use, with minimal training time.
  • Needs to be as flexible as paper being able to capture different types of information, not just True and False questions.
  • Needs to be better than paper allow you to utilize mobile technology to take pictures and leave additional comments.
  • Most importantly you need to be able to get at the data you are collecting and start using it to make better operations decisions.

A solution that could replace paper checklists and hold people accountable at the store level up through the corporate level of a system could drive better, safer, and more profitable restaurants.

A restaurant company that could deploy a solution like this and start holding their unit managers more accountable and harness this new feed of operations data could optimize their operations and beat their competition by running more efficiently and making better decisions.

Think about the data that corporate restaurant management has access to today.  They have register, inventory/ordering, and customer service data and they use that data to make the best decisions that they can.  If you used a checklist solution to capture pertinent operations data at the store level, which would drive better operations.  You could also use the date with your other data feeds such as sales, inventory, and customer service to create a complete picture of how your restaurants were operating. Remember that operations affect sales, inventory, food costs, and customer service, its not he other away around.

It would be a major competitive advantage for any restaurant system that took advantage of operations data.  Look at how companies like Walmart, FedEx, Nordstrom, and Google use data to streamline operations and generate increased profits.  Restaurant chains could do the same thing if they had the data, which they have, but just need to get it into an accessible, usable format.

How do you do this in your chain?  You should implement the OpsAnalitica Inspector platform in your system for daily operations checklists and corporate inspections.  The OpsAnalitica Inspector will hold your managers and teams more accountable at the restaurant level and our custom reporting and data warehouse will provide you with the data that you need to optimize your business.

The future of the restaurant industry is possible today for those chains that are bold enough to take the first step forward.  If you are interested in learning more please click here and set up a call with our team.

The Restaurant Industry’s Dirty Little Secret

Busy Kitchen

The dirty little secret in the restaurant industry is that we know a lot of our restaurant safety-documentation is not completed accurately.

Every day in restaurants across the country, restaurant managers are supposed to complete temperature logs, line checks, and other safety checks to ensure that they are operating safely. A lot of those logs are pencil-whipped, or to state it more bluntly they are lied on.

The reasons for the lies are numerous:  ran out of time, who cares no one ever looks at them, I know we are safe, we’ve never gotten anyone sick, etc.. This behavior is so commonplace in the industry’s culture that it is almost a joke.

I was recently in a meeting with some restaurant executives, and we were discussing their line checks, their checks included food temps and sanitation items. The company’s policy was restaurant managers would complete two line checks a day, one before each meal period.  Area managers would review the line checks once a quarter when they performed their site inspections. I asked these executives, are these checks getting done twice a day? When your area manager is going through their site inspection are they seeing 180 of these a quarter?  Everyone in the room chuckled, “yes, they all get done accurately every shift”  was the ha ha response.

Daily checklists not being completed or being completed inaccurately seems to be a common issue no matter how large or small the restaurant system is.  We recently talked with a chef of a restaurant who was working there six days a week, and she didn’t feel like she knew if the checks were getting done accurately and she was only managing that location.  That speaks to how hard it is to manage in restaurants, you can’t be everywhere all the time.  We spoke with a multi-unit franchisee who stated that he has walked into his restaurants and looked at the temp logs on the wall and knew they had been pencil whipped.

We recently conducted a survey of over 100 restaurant managers and owners from around the world. Here are the results:

  • 100% of respondents believed that conducting checklists could help them run safer and more profitable restaurants
  • 42% of respondents conducted daily line checks
  • 45% of respondents conducted daily temp logs
  • 88% conducted checklists on paper

This final stat is the kicker:

  • 94% of respondents believed that their checklists were not being filled out accurately.

Here is the light at the end of the tunnel.  We just did a deep dive with one of our clients who has used the OpsAnalitica platform for 20 months. They were able to cut critical food safety violations by 55% when they did their daily checklists.  How; because they saw stuff that was wrong every shift and they fixed it. When you actually do your checklists, they do work and you run safer and better operations.

The reason pencil whipping is so rampant in the industry is because 99% of the time it doesn’t matter.  It is a hard truth to hear, but it is true.  If it mattered, then we as an industry would have corrected this issue by now.

To fully understand pencil whipping we have to break down the safety checklist into it’s two parts:  checking to ensure items are safe and documenting the items safety status.

When you pencil whip a checklist or log you are committing two sets of lies:

  1. You are stating that you checked the safety of the items on the checklist.
  2. You are falsifying a safety document.

The reason that you are being asked to check the safety of these items is because they have been identified as high-risk factors that could contribute to getting someone sick or even potentially killing them.  If you check the item and catch a problem, then you have an opportunity to fix that problem before it affects your guests.  That is why we do the checks.

When you don’t check the safety of high-risk items or of your sanitation procedures, you are rolling the dice with other people’s lives and it is no different than driving a car drunk or shooting a gun into a crowd.  It can have the same exact consequences.  I know that sounds dramatic but ask the families of those people who died from eating a Blue Bell ice cream last summer.

The second offense is just dumb; you should never put your name or complete any official document with knowingly false information on it.  This goes back to that early statement that 99% of the time this won’t come back to haunt you until the day it does, and then you will regret that decision.

If your restaurant get’s someone sick, look at Chipotle they just had their safety documentation from every unit subpoenaed, are you going to want to stand by all of the false documents.  The lawyers and investigators are going to use that documentation to show your wanton disregard for your safety procedures.  If you are a manager or an owner, take this one step further; do you think your employees would lie for you on the stand in that scenario?  My guess is that when asked they are going to tell the truth.

Here is something that most restaurant owners don’t know about, most restaurant liability and food borne illness insurance policies have writers in them that release the insurance company from responsibility if the restaurant is acting unsafely.  Here are some actual writers that we pulled from a policy:

  • 3.13  Any Food Borne Illness that occurs after the Insured has knowledge of a defect or deviation in the production, preparation or manufacture of the Insured Product(s), or circumstance(s) which have or are likely to result in such deviation or defect, and fails to take corrective action.
  • 3.19  Any dishonest, willful, wanton, fraudulent, criminal or malicious act, error of omission by the Insured(s).  This is your Pencil Whipping Clause!!!!
  • 3.21  Any Food Borne Illness that occurs where the Insured is or ought to be aware that the Insured is in violation of the corporate mandated food handling or food procurement procedures and has not taken action to rectify the violation.

We have all heard about insurance companies doing whatever it takes not to pay out claims are you willing to risk that consequence on pencil whippers.

What do you do?  

I hope that we all have come to the conclusion that completing checklists accurately makes sense because we are acting responsibly as operators and we are looking out for the best interests of our customers and brands.  If you are going to incur the costs of creating and mandating that checklists get completed, then you have to hold manager’s accountable for getting them completed on-time and accurately.  That means that every shift that safety and quality checklists are completed before we start serving guests and that the managers take the time to check each item and record the items safety status on the checklist.  That is the only way that you can generate an ROI from your checklists and ensure safe operations.

There are a ton of ways to do this.  If you are going to stick with paper checklists, then you can have the person time date stamp when they started and ended each checklist.  If you are a multi-unit operator, you can have your restaurant manager’s fax in their checklists to corporate each day or scan and email them.  The reason most people don’t do this is because it is a giant waste of time and it pushes the burden of managing all of this paper to different people in the business.

With today’s technology, the easiest way to manage your checklists is to use a checklist system app.  These are the features you should be looking for in a checklist app:

  • Works on different devices: phones and tablets
  • Works on different operating systems, technology moves to fast and you don’t want to be stuck on an obsolete platform
  • Doesn’t require wifi to complete a checklist – wifi isn’t always great in kitchens and can stop you from inspecting outside
  • Supports different question types – not just True False – you need to be able to capture different types of answers and report off of them
  • The system should be able to reference additional help and training documentation so inspectors can understand the why behind the question and the answer scale
  • Is quick – the quicker it is to complete a checklist the greater the chance it will be completed every shift accurately
  • Make sure you can build custom reports so you can get the data you are collecting in a format that works for your organization
  • The system should hold managers responsible and track what is happening when they complete an inspection
  • Should be easy to use and train on so that checklists are completed consistently across the organization even as you experience turnover
  • Should be easy to administrate or even better the provider should offer a full-service plan so that you can get up and running quickly and stay up and running over time – remember employee turnover

Pencil whipping has been happening in our industry for years, but it needs to come to a stop.  There is a benefit to completing these safety and operational checklists every shift.  Not only at the restaurant level to ensure that you are safe and ready for service but also at the corporate level where operations data can be collected and used to assist the restaurants.  Keeping people safe is a moral and brand imperative and the best way to do that is through solid operations that are driven by checklists.

If you aren’t using daily checklists to manage your operations, or you are using paper, there is a better way.  I invite you to click here to learn more about the OpsAnalitica Platform.  We can help you digitize your checklists and get you up and running doing your checklists a better way today.  We have a managed service offering that takes all of the burdens of setting up and managing your checklist program off of your shoulders and puts it on ours, we can have you up and running in as little as a day.  If you are a DIY type of person we have a plan that fits your needs.  The first step is jumping on a quick call and learning more about how we can help you.  Click on the learn more button at the top right of your screen.

 

Don’t Neglect the FOH

I’m sure you have experienced this a million times….

I’m going to share a story from my days at bartending in a very busy mountain town.

Spring break was one of the busiest times of the year. Two-hour waits for dinner and up to an hour wait for lunch. No real break between the shifts because we got the apres ski crowd after a busy day on the mountain.

During March, there would be a lot of cash just burning a hole in our pockets, like most ski town residents we would need to unwind at the end of the night. It could sometimes turn into a 4 or 5-hour process and would inevitably make the next lunch shift pretty rough.

It was always a bad idea when all of us would go out together because now instead of 1 or 2 of the staff operating at 75%, we would have 90% of the staff operating at 50%.

Never failed, every time that happened we’d get an early lunch rush. Side work was half-assed, tables weren’t set, outside heaters weren’t on, umbrellas were down, snow on the front patio. You get the picture.

We’d ingest as much coffee as we could stand and GO TO WAR!

The service was horrible because you are trying to complete side work while serving guests. Drinks took forever because there weren’t enough glasses at the soft drink stations, not enough lemons cut, it was a disaster. It hurt our tips and certainly hurt lunch sales.

Anyone who has ever managed a restaurant has worked a shift like this. You walk in the door and your staff looks like the slept in their uniforms and don’t get me started about the smell, like a damp cellar.

Instead of proactively managing your shift, you start your day putting out FIRES.

Instead of walking your dining room and checking it for readiness you are herding CATS.

In the spirit of this story, we’d like to share our FOH Readiness Checklist. Click here to download it for free!

Even if you have a FOH Checklist, you should take a minute and check out ours.

We hope you find it helpful.

If you are interested in learning more about how OpsAnalitica is helping restaurant operators run safer, more profitable restaurants, click here, to watch a quick 14 minute demo video.