Author : Tommy Yionoulis

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Don’t Market Yourself Off A Cliff

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Two of the most iconic moments in film history are Thelma & Louise driving off that cliff and Butch and Sundance charging out the door to take on the Bolivian army.

They are scenes of people choosing their destruction.

There are restaurant owners and managers that do the same thing every day.

We wrote a blog about how GrubHub was hurting restaurants that weren’t ready for the sales increases. Restaurants would put themselves on GrubHub and start to get a ton of delivery orders and then not be able to keep up with the volume of both deliveries and in-house guests.

When Groupon first came out, there were stories of restaurants getting so slammed with Groupon customers, especially around expiration dates, that they angered many first-time visitors and in a lot of ways did more harm to their business than good.  This happened to some amazing waffle guys in Denver that I spoke to.

When I first got on Groupon, I watched this idiot massage guy sell over 3,000 $39 90-minute massages in one day. I did the math, and it would have taken this guy over three years full-time doing these deeply discounted massages to get through all the Groupons he had sold. It was crazy. Ironically the next day he enlisted five other massage people to help him work all the Groupons and I don’t think my wife ever got hers.

Back in 2008 I ran the Franchise Assistance Program for a large sandwich franchisor. It was a tough job to have right at the beginning of the recession because a lot of our franchisees were hurting and required assistance.

I was only allowed to give qualified franchisees access to our delivery platform for free. Adding delivery makes a lot of sense for a sophisticated operator who has the bandwidth to market and successfully implement the program. Delivering food requires additional employees and can stress a team if you don’t have the proper set-up. Look at a Jimmy Johns, they have one sandwich line for their in-store customers and one just for delivery, they are set-up correctly.

Unfortunately, for most of our franchisees, delivery wasn’t something that could help them because they couldn’t implement it successfully.  For those franchisees who did it half-assed, it probably hurt them more than it helped them.

My point is this. There are tons of new technology solutions being marketed to the restaurant industry that will help you drive new sales: table kiosks, delivery, carry out, mobile ordering apps, etc.. They can be great tools for your business if your operations are rock solid, you staff up, and you put the systems in place to handle the increased volume.

If you don’t plan for the increase, it is like sending out a coupon that is priced incorrectly, a coupon where you lose money on every redemption. The coupon is the best deal ever, and people redeem it. You feel great about all the business you are getting until you see your bank statement. You marketed yourself right out of business.

A lot of these tools get a service charge per transaction or take a percentage of the sale, so their motivation is to get you a ton of transactions. Your motivation as a restaurant owner is to take great care of your guests and run a financially successful business. Those motivations can be at odds with each other. I think a lot of Groupon’s early customers felt that way.

If you are going to open a new sales channel, then you should do the following things:

  • Put together a financial plan to determine how much it is going to cost you in staffing, food inventory, etc.
  • Make sure you can afford to start this channel for at least 30 to 90 day period.
    • In some cases, you will get busy right away and the danger is in not being prepared.
    • In other cases, you may experience the opposite, which is not enough sales and you have increased your labor and food costs. You need to be able to hold on and give this test a chance to be successful.
  • Make sure you time starting the new channel correctly.
    • Don’t just turn it on, plan it out and start slowly.
  • Find out if the vendor can throttle you in their system to ensure that you don’t get slammed when you aren’t prepared.
    • It’s always better to drink from a trickle than a fire hose.
  • Focus on customer service and quality of product above all else.
    • If you do that then the increased sales will come and be sustained.
  • Make sure you are running safe and efficient operations before adding a new sales channel.
    • Volume increases bring out hidden issues in your operations very quickly.
    • Consider using an automated checklist program, OpsAnalitica, to ensure safety and readiness every shift.

Marketing and adding new sales channels can grow profitability and expand a restaurant’s trade area exposing it to new customers. Generating more cash and growth. This growth can only happen when the new channel is implemented flawlessly, and the quality of the product matches the customer’s expectations.

If operations cannot keep up with new demand, then the new channel can accelerate the demise of your business, and you can market yourself right off a cliff.

Face the Facts: It’s a Drag and Drop World – Part I

You either get dragged (or drag yourself) into restaurant management and accountability technology…

Or be forced to drop out for running an unprofitable business.

There is no middle ground.

That’s for one simple reason: Perhaps 15 years ago it was possible to run a business without a web page, but today it is not. You cannot run a successful restaurant without technology. It’s impossible to do so profitably. It’s just a matter of how much and what kind of technology you adopt.

The days of the hippy cafes or sandwich shops managed all loosey goosey are long gone.  Now, competitors with iPads, tablets, web apps, and interactive spreadsheets will eat your lunch, while serving lunch to all the customers who used to go to the old establishment.

Whether it’s food inventory management, staff scheduling, reservations, or automated line checks, restaurant management and accountability technology is here to stay, and it’s only getting more innovative, more seamless, more integrated.  In fact, the next wave of restaurant management technology is focused workflow and accountability management, and there are exciting solutions on the market today.

Enforcing Best Practice Management

  • Today’s workflow management and accountability technology actually enforces best practices.  The workflows are driven forth through procedurally organized critical paths.
  • That means automated management of such activities as:
    • Line checks
    • Temp checks
    • Menu standardization
    • Setup checks
    • Open checklists
    • Closing checklists
    • Employee onboarding
    • Employee training
    • OSHA compliance
    • Health inspection compliance
    • Any procedure: You name it, even custom workflows
  • These critical paths can be set up to be self-improving, and informed by positive feedback loops.
  • The procedures and workflow that used to be dependent on someone’s memory, or on a list taped to the walk-in… they can now be standardized in an app suite.
  • The value of any standardized workflow is only as good as your ability to put in the hands of all your workers.
  • App-driven workflows can be easily deployed on smart phones, iPads, and tablets.  Linked to the internet, the data that spins off from the apps can feed corporate awareness of operations at extremely granular levels.
  • Reporting and compliance can be monitored through management dashboards.

Click here to view part II.

Apps and Big Data: How They Are Changing The World of Multi-Location Restaurants – Part II

Here is part two. Part one was posted on Monday, click here to read part one if you haven’t read it already.

If sales drop, for seemingly no reason, Big Data can look at customer reporting sites like Yelp through an automatic data harvest to see if bad scores are driving away people.  Without Big Data, for all you know, your bad Yelp score may actually correlate with a broken air conditioner, and it should not be forcing you through the expensive process of a menu change-out.  Or, it may be that all your key performance indicators are indicating perfect operations, yet one of your locations is under performing all the rest by a meaningful degree, until… Big Data shows you that you must look elsewhere for the reason, and it’s the long-term road work project that’s driving people away. And that can be fixed with a call to the mayor and his department of public works.

Collect it with Apps

Clearly, Big Data holds the key of viewing performance metrics in an extremely creative and revealing way.  So, what has limited the use of Big Data in multi-location restaurants?

You need a method for collecting the data and feeding the Big Data analytics. And that’s where Apps and mobility come in to play.

Today, tablets and iPads are linked to the internet.  That’s no secret.

And we can put these tablets and iPads in the hands of workers for pennies a day. That’s no secret either.

The trick is to deploy clever apps that drive the workers through their inspection tasks so the enterprise is capturing the data at the right times and the right locations, no matter what the skill level of the worker. That’s what apps can do with a high degree of accuracy.

Call it workflow regimentation.

Call it process control.

Call it worker discipline.

Call it good training.

The trick is to have an app that A) prompts the timely collection of data, that B) records and stores the data (the need for CYA never dies), and most importantly, C) the app should serve as a portal to a Big Data analysis that you, at the enterprise level, can make use of to maximize the profits of your operations.  (The fact compliance with health laws is enormously easier with these types of apps is a major side benefit.)

So, when you think multi-location restaurants, you should think Big Data.  But when you think Big Data, you should ask what apps are the most appropriate for feeding the very algorithms on which your success depends.

Apps and Big Data: How They Are Changing The World of Multi-Location Restaurants – Part I

You’ve surely seen the hopeful ads about for how Big Data can help cure cancer and stop deadly attacks, but you know what Big Data is really ideal for?

Multi-unit restaurants.

That’s right.

Oh sure, we’ll need Big Data to cure diseases and save the world, but Big Data excels at process optimization and workflow analytics that are exactly what we need to make multi-location restaurants more profitable and to solve problems that, before Big Data, seemed mysterious to managers.

Specifically, Big Data is ideal for:

  1. Gathering large amounts of data from an unlimited number of sources, a.k.a. ingestion.
  2. Detecting patterns in that data; and these patterns can be extraordinarily complex, such as comparing third shift revenues across 16 locations, while tracking the additional or subtraction of menu specials, viewed by server, by gender, and correlated to the local weather.
  3. Synthesizing the data into key performance indicators, in an unlimited array of data slices, which are limited only by your imagination in dreaming up how you’d like to see and compare performance.
  4. Presenting the data in special-temporal presentations (graphs and vectors) that offer actionable intelligence and trend spotting.

Too Academic? Nope. 

Does all of that sound a little too academic and abstract?

It isn’t. Let’s take a closer look.

Here is a short list of common inspection data points for a typical multi-location restaurant:

  • Cold potentially hazardous foods maintained at 41F or below
  • Food products not held, or sold past expiration
  • Food properly covered and protected
  • Frozen foods held solidly frozen
  • Fruits and vegetables properly washed prior to processing and serving
  • Hot potentially hazardous foods maintained at 140F or above
  • Walk-in cooler product temperatures maintained at 41F or below.

As the information is collected for each of these data points, the restaurant worker needs to identify themselves, note the actual temperature, note the time of the inspection, note the location of the data, and perhaps make a comment / take a photo.

Typically, this has to happen multiple times a day.  So, the inspections are potentially undertaken by many different people, all with varying degrees of skill.

Now, take these inspection items (and this sample list from above is just a fraction of the items that need to be inspected daily) and multiple them by the number of locations you are managing.  The complexity of consolidating and analyzing this data in a pre-Big Data world (especially if it were just written down on clipboards and thrown in a binder) make the usefulness of this data practically nil.  Fact is, data was collected only as a CYA exercise in case there was ever a problem or an inspection, and you needed historical data records to review.  But now that Big Data has come into play, this data can be collected, and algorithms written, to accomplish these following Big Data tasks…tasks that were nearly impossible to accomplish just a few short years ago:

  1. Gather the data in real time, with auto-triggers and alerts that can watch trends and predict problems before they occur or that allow you to dispatch a worker with remedial actions, e.g. manager gets a text when the fridge temp rises above 41F.
  2. View the data at the individual location level, the regional level, or the enterprise level, or slice and dice the data to just look at, say, third shifts, or just at certain managers, or just at certain individual indicators, like “food sold past expiration” in relation to desperate workers trying to keep food costs inline to cover up theft, e.g. VP of Ops gets notified in real time so he can alert an area manager to conduct an inventory. That is how you drive accountability into your organization.
  3. Correlate any number of location data points to sales, or even to outside sources like Yelp or Trip Advisor. If the bathroom is filthy and the inspections are missed (as indicated by a lack of data points), it should come as no surprise the customers stop eating at that location and are posting bad reviews, e.g. the fix is easy, once you know the cause of the problem.
  4. Use big data to identify the cost control issues in your bottom 20% of restaurants that are eroding profits chain wide, develop an operational fix, and direct your area managers to focus their efforts on fixing those issues.  Then use your data collection to track the success or failure of those initiatives.  That is the accountability management that is enabled by Big Data.

Stay tuned for part II later on this week. Follow us on Linkedin so that you don’t miss part II.

Share Your Thoughts On The Industry

Every week we aspire to create content for you that will make a difference in your business. You guys have downloaded tens of thousands of reports, eBooks, tools, and articles.  

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Some weeks we create content that is very popular, and hundreds of you respond by downloading it.   

Other weeks we miss the boat completely.   

If you could take just 3 minutes and tell me what is the single biggest challenge that you’re struggling with in your multi-unit restaurant operations right now.  

A) It would mean the world to me.  B), most importantly I’ll be able to use that information to gear my upcoming emails toward topics you specifically want to know more about.

Click here to take survey.

Keep on Inspecting!

Today’s Struggles of Restaurant Management

It is hard to believe that I got my first restaurant job 30 years ago.  I was fourteen years old; I remember because I had to get a work permit, I was a grill cook at a Jerry’s Subs and Pizza in the Columbia Mall.

I got my hotel restaurant degree 8 years later, and I remember one of the big themes at school was manager burn-out.  We were still in that time when restaurant managers were expected to work 80 hours a week.

As I look at how the industry has changed over my lifetime, it is amazing to me how much harder it is today to be a restaurant manager than it was back then.

I think in the past restaurant management was a physically tough job.  Over time, I think it has become less physical and more mentally tough.

Our latest eBook:  Restaurant Management The Struggles of Today’s World discusses some of the issues facing restaurant managers today.  I encourage you to get your free copy emailed to you by clicking here.

Even though restaurant management is getting tougher, I think it is ultimately good for manager’s and the industry. As the manager’s of the future are forced to become more well rounded and to wear more operational hats, they will gain valuable skills, and the learning process will be interesting to say the least.

Ultimately all things evolve, and restaurant management is not immune.  So push the Dinosaur Manager’s out of your operations and look for those eager learners who are ready for their next big challenge.  Get them started with a copy of our Free eBook by clicking here.

Cruffin – I’ve got to get me one of these!

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This is a very light blog post today.  Light and buttery and delicious, or so I’m guessing.  Have you heard of the Cruffin? It is a genetically engineered breakfast treat.  A mad scientist, probably from Monsanto or Paris, mated a croissant and muffin together.  God bless technology.

Check out the original article here, too many mouth watering pictures to cut and paste, about the Cruffin and curse those who live by a Cruffin bakery. I can tell you that I will be hunting wild Cruffins until I bag one.  Enjoy

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The Next Big Competitive Advantage in the Restaurant Industry

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It is human nature to look forward trying to figure out what is going to be the next big thing in your industry so you can beat your competitors to the punch. I believe the next big thing in the restaurant industry is going to be technology, look how perceptive I am.

Technology and apps are presented all the time as these magic bullets that can fix your business. In a lot of cases, they can add incredible value to your business if you can get them implemented.

Implementation is the key! Identifying, Testing, and Implementing new technology across a portfolio of restaurants and ensuring that you get your ROI out of the tool requires a unique skill set and disciplined approach.

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The technology implementation skill set is the muscle that each restaurant company has to develop. It is the companies that adopt technology quickly and get an ROI on the product that are going to have the competitive advantage in the future.

I own an app company, OpsAnalitica, we have a restaurant checklist and reporting platform. Our platform can be implemented in a few hours because it is very user-friendly, and it was designed to scale from basic to advanced effortlessly. More complicated platforms can take weeks or months to get implemented.

I spent the last five years before starting OpsAnalitica doing large enterprise security consulting for Fortune 500 companies. I’ve been a part of several multi-million dollar implementations, and I would like to tell you that they all went perfectly. They didn’t.

The blame for the mediocre results of these projects should be equally spread out to all parties that were involved. It is usually a combination of factors that take a plan with so much hope and expectation into the crapper.

Here are some of the lessons I learned doing these implementations:

1. The most important rule of implementations: START SIMPLE AND ADD FUNCTIONALITY FROM THERE!!!! I can’t stress this enough, you just purchased a Ferrari piece of software. Start with the most basic functionality and get it out there to the end users. Then take their feedback and continue to roll out additional functionality over time. Trying to do too much in phase 1 is the number one reason I saw projects fail.

2. Be wary of companies that won’t help let you kick the tires of their product before you purchase, demand a free trial. At the very minimum make them show you a live demo of the tool. If they can’t do a live demo or let you see the product in action at another company, they don’t have a product that works.

3. Find out what kind of support packages and training the company offers. Use that as a negotiating point when you can’t get additional concessions on price try to get them to offer expanded support.

4. If you hire consultants be wary if they never push back – consultants that don’t push back on requirements or don’t offer their expert opinion and try to steer you to the best option are not consultants. You pay consultants to consult, to tell you that you are wrong or that you are going to pay a penalty if you do it this way. If the people you just hired to implement just say yes and do whatever you want then you aren’t getting your monies worth.

5. Ask for references and know you will never get a reference that isn’t going to tell you the product is great. Use your network and try to reach out to people who work at companies that use the tool and see if they like the product.

Technology, when implemented and being used correctly can save time, money, and drive profits. Those profits and the increased cash flow can allow you to push your competitors around on the playing field. They can allow you to increase your marketing, get better locations, open more locations, etc..

Technology, when not implemented correctly: can suck away cash, steal focus, waste valuable time, stop other projects from being funded or started and leave a horrible taste in your mouth. Technology is only better than manual processes when it works.

I hope that this blog helps you on your next project and that you start trying to strengthen your internal implementation skill set.

Dinosaur operators need to adapt or go extinct

Are you a dinosaur operator? A dinosaur operator – is a person who:

  1. Clings to the ways of the past (this doesn’t mean they are old they just aren’t comfortable with change).
  2. Is afraid of new technology – prefers pen and paper to anything digital.
  3. Has lost their intellectual inquisitiveness or doesn’t have the drive to adopt new technologies and best practices.
  4. Hasn’t mastered a new professional skill in years, is doing what they have always done.

Being a dinosaur operator doesn’t mean that the person isn’t successful or good at what they do today. No, not at all. Over time, dinosaur operators will lose their edge as their competition from other businesses and for jobs get tougher, faster, and more experience with the new technologies and best practices of today.

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The new replacing the old is the natural order of things, we are constantly learning from our previous experience and working to make things better. The issue today isn’t change, that has always been constant, it is the rate of change.

Computers, tablets, smart phones, the internet economy are driving change at a rapid pace. The iPad was released 4/3/10 and the same year Square released a mobile payment platform that runs on iPads and in 2013; they released their POS software. Do you think the big POS companies saw Sqaure POS systems being adopted by large companies like Starbucks?  Half of the people I talk to for my company, OpsAnalitica, already have tablet computers in their kitchens. Technology is permeating industries that have remained virtually the same for 1000’s of years; the restaurant industry is one of them.

If you remove computer-driven technologies some of the biggest disruptive changes in the restaurant business in the last 200 years were: cash registers, refrigeration that wasn’t powered by ice, disinfectants, and cans/preservatives. All of those technologies were just improvements on what was already being done. Computers starting with POS Systems, desktops with costing software, through tablets and mobile apps have radically changed the job, and the skills required of the chef and restaurant manager.

I was talking to a professor at one of the top Hospitality programs this week, and I was asking him about Millennials and what they want from jobs and he said:  passionate about causes, they want to customize, they interact differently, and they reject the old ways of doing things.

You can see where technology has affected Millennials with all of those traits. A person born after 1990 has always had: access to the internet; they have always seen mobile phones (the first smartphones were being sold in the mid-1990’s). Technology for them and the rate of change of technology is the norm, and it is not weird or scary. Millennials are the people you see in your restaurant all sitting at a table looking at their phones and not talking.

If we as managers don’t adopt personally and drive our businesses to adopt new technologies, we are going to be at a competitive disadvantage. As our competitors embrace new technologies and start to gain ROI from them, they will be better positioned to grow their businesses and careers.

If you have read this blog and you are a self-identified dinosaur operator, here are a couple of strategies to get you moving out of that category:

  • Get on youtube and start searching out new technologies that you have heard about in the industry. You will be amazed at the amount of free video content on everything. You will be able to educate yourself very quickly on what is happening in the business.
  • Try reverse mentoring where you grab a technology savvy team member, and you have them research something then brief you on it as a side project. It gives them the great experience of running a project, and you get the help you need to learn.

Jump in and you will find that the water is warm and not that deep.

Good luck.

 

New FDA Rules mean more Manufacturer Self-Inspections

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The new FDA rules that were released this month are going to mandate that manufacturers take more responsibility for their facilities.  Here are the points that I found most interesting:

  • Tainted foods — including recent examples such as spinach, cantaloupe and ice cream — sicken 1 in 6 Americans — or 48 million people — each year, according to the Centers for Disease Control and Prevention. Approximately 128,000 are hospitalized and 3,000 die from foodborne illnesses annually.
  • “The food safety problems we experience have one important thing in common: They are largely preventable,” Michael Taylor, FDA deputy commissioner for foods and veterinary medicine
  • Under two new rules that take effect later this year, manufacturers of human and animal foods must submit food safety plans to the FDA showing how they keep their facilities clean and how they’ll react to possible safety issues.
  • Rather than only reacting to outbreaks, companies now will have to keep them from occurring. Manufacturers must take steps to prevent, or kill, harmful bacteria. In addition, companies should keep allergens — a major cause of food recalls — from getting from one food into another.
  • “These are not one-size-fits-all requirements,” Taylor said. “The rules are risked-based, targeted and flexible so that good outcomes are achieved in the most effective and practical way.”

Manufacturers and farmers are going to have to submit these plans to the FDA and then they are going to be required to conduct checklists and tests to ensure that they are meeting cleanliness standards.

I invite any businesses that are going to be affected by these new standards to check out OpsAnalitica.  Our platform is the most advanced inspection data collection and data analytics platform on the market today.

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Here is the full article:

By Steven Reinberg
HealthDay Reporter

THURSDAY, Sept. 10, 2015 (HealthDay News) — The U.S. Food and Drug Administration announced new steps Thursday to improve the cleanliness of food manufacturing plants in the wake of a string of lethal foodborne illness outbreaks.

Tainted foods — including recent examples such as spinach, cantaloupe and ice cream — sicken 1 in 6 Americans — or 48 million people — each year, according to the Centers for Disease Control and Prevention. Approximately 128,000 are hospitalized and 3,000 die from foodborne illnesses annually.

“The food safety problems we experience have one important thing in common: They are largely preventable,” Michael Taylor, FDA deputy commissioner for foods and veterinary medicine, said during a morning media briefing.

Under two new rules that take effect later this year, manufacturers of human and animal foods must submit food safety plans to the FDA showing how they keep their facilities clean and how they’ll react to possible safety issues.

The new preventive measures can help ensure that foodborne illnesses and the disruptions they cause will be eliminated, Taylor said.

“American consumers have high expectations of the safety of the food supply,” he added. “For prevention to be effective, the proper steps need to be taken at each point in the food production processing to ensure hazards can never enter the system,” Taylor said. “That’s why Congress enacted [the new] rules.”

The rules come under the FDA Food Safety Modernization Act. President Obama signed the law in January 2011 but implementation has been delayed. The new procedures represent the first sweeping changes to U.S. food safety laws in 70 years, according to the agency.

Besides the two rules finalized Thursday, five additional food safety rules will become final in 2016.

The FDA says consumers and their pets will be protected in various ways.

Rather than only reacting to outbreaks, companies now will have to keep them from occurring. Manufacturers must take steps to prevent, or kill, harmful bacteria. In addition, companies should keep allergens — a major cause of food recalls — from getting from one food into another.

Health regulators want to expand prevention measures to farms, where contamination is harder to control than in factories. “Standards have been proposed for agricultural water, farm worker hygiene or cleanliness, compost and sanitation conditions affecting buildings, equipment and tools. These standards will apply to both domestic and imported produce,” the agency said in a news release.

Oversight of imported foods, which account for 15 percent of the U.S. food supply, will also improve. Importers will have more responsibility to ensure foods are safe and meet the same standards as domestic producers, the agency said.

“These are not one-size-fits-all requirements,” Taylor said. “The rules are risked-based, targeted and flexible so that good outcomes are achieved in the most effective and practical way.”

One expert welcomed the new safety protocols.

“These proposed updates are directly responsive to the evolving challenges of a global food supply, and illustrate the vital importance of the FDA to us all,” said Dr. David Katz, director of the Yale University Prevention Research Center in New Haven, Conn.

Oversight of food safety is a core function of the FDA, and a job that only a government agency can perform effectively, Katz added.

Noting that Americans count on the safety of the nation’s food supply, he added, “We can do so with a bit more confidence courtesy of these new provisions.”

More information

For more on food safety, visit Foodsafety.gov.

SOURCES: David Katz, M.D., M.P.H., director, Yale University Prevention Research Center, New Haven, Conn.; Sept. 10, 2015, news conference with: Michael Taylor, J.D., deputy commissioner, Foods and Veterinary Medicine, U.S. Food and Drug Administration