People + Process = Success
By Mike Walls, Operations Consultant & Beverage Certified Cicerone
In a recent conversation with our friends at RASI, an accounting system, and educational service, we discussed the perils of implementing new technology without firmly establishing the fundamentals in systems, training, and operations to put good data into the system to get the results you need.
Many technology platforms can help to build those standards and best practices, and they’re getting better at it all the time, but there are a few issues that we repeatedly see in the field:
- Wobble: Wobble occurs during growth periods, periods of high turnover, or in businesses with “telephone training” where information is passed from one person to the next without referencing source material or with no system of skills validation and accountability. Over time, the “why” is forgotten, steps are skipped, and what was once a firmly planted brand or practice begins to wobble from its foundation, which turns into more of a hindrance than a solution.
- Over-reliance on technology: Sometimes, we rely too heavily on our technology solution or process and not enough on the people executing tasks. People + Process = Success. Both are needed, and one doesn’t work without the other. Try to think of your technology resource as 50% of the solution and your team as the other 50%. Train the team, tell them why, and hold them accountable. Make sure they have the tools to exceed your expectations. Refresh training regularly and make sure that no key players are left behind.
Many symptoms can be treated by addressing the underlying problem that is a lack of training. This should be the top priority of any growth-oriented company. New technology can help get you where you want to go, but to make the solutions long-term, you need to remember the other half of the equation and continuously work to keep your team empowered.
Squarespace and Tock, Hospitality Digitally Delivered
By: Natasha Reta, Culinary Consultant
Squarespace has been steadily rising in popularity by enhancing eCommerce through its user-friendly platform. Last year restaurants eager to improve sales in an otherwise “closed year” increased retail offerings sales, packaged goods, and merchandise. So it is no shock to hear the news of the $400 million acquisition of Tock, the reservation system founded by the Alinea Group’s Nick Kokonas. Kokanas commented about the merger, “Combining Tock’s unified platform and years of hospitality industry expertise with Squarespace’s reach resources, and design-forward products, in our view, creates an opportunity to deliver a best-in-class solution to millions of entrepreneurs and small businesses around the world.”
Tock, awarded in Most Innovative Companies in 2021, has offered users a platform for reservations, take-out, and delivery. Designed by a professional team of restaurant hospitality enthusiasts, designers, and writers, The Tock platform not only delivers food but also delivers hospitality chosen by you through an easy-to-navigate platform, including experiences of art and culture, wine tastings, and fine dining. It’s the only unified system with reservations, take-out, delivery, and events all in one. In March 2020, Tock to Go helped thousands of restaurants and wineries rebuild their operations, lower costs, re-employ staff and eliminate the use of high-priced third-party delivery apps. They even included COVID-friendly floor plan customization and advanced waiting lists. With only a 3% commission of delivery orders and carry out, it was more affordable for restaurants than the 15-30% in fees that other third parties like Grubhub and DoorDash are charging their clients.
This new partnership with Squarespace means Tock can expand its premium hospitality service to a local area near you. Nick Kokonas of Alinea Group will remain CEO of the newly acquired reservation platform, saying, “the entire team will join Squarespace to support our clients in digitally connecting with the world- elegantly and with the same spirit of innovation we’ve fervently embraced.”
On the app or the web, Tock and Squarespace will be delivering exquisite hospitality through events, packages, dining, and more. Get ready to enjoy the art and culture in your local community.
Synergy Top Money-Saving Tips
“Jigger all bar drinks to stop over-pouring and ensure that drinks are consistent. If you don’t like jiggers, then make sure to use speed pourers and pour test all the bartenders on a regular basis.”
- Mike Walls, Operations & Beverages
“Teach your back-of-house staff how to properly utilize available portion tools to reduce food waste and labor hours. Staff should always be given proper instruction and training on kitchen tools and equipment during onboarding and station training.”
- Natasha Reta, Culinary & Operations
“Assign front-of-house side work and cleaning tasks at the beginning of each shift. Team members will finish much more quickly if they can start as soon as business winds down. Assign tasks like folding napkins and rolling silverware to host staff to do before and after the rush.”
- Rita Imerson, Operations & Training
“Cross-train all back-of-house staff on as many kitchen positions as possible. With our ever-tightening labor market, gone are the days of the specialist except for certain high-skill tasks like butchery. If everyone on the team can jump in and handle any station, you can best utilize all your staffing resources.”
- Anne Haerle, Culinary & Concept Development
The Importance of Margins over Food Costs
The bottom line is top-of-mind for all restaurant owners in an industry where margins are very slim. Naturally, operators are seeking ways to reduce costs. The importance and logic behind this is sound. However, we want to dispel the notion that keeping food costs as low as possible alone, is the key to running a profitable restaurant.
There are multiple operating expenses to focus on to optimize in order to increase profit margins. Food cost is certainly a large factor, but it is not the only area you need to examine when seeking to increase profitability. For example, often restaurant operators seek to purchase the lowest cost ingredients or buy in bulk to take advantage of a discount. This type of practice can inadvertently lead to more food waste (overbuying and the resulting risk of spoilage) and ironically, increases food costs.
The formula for calculating your restaurant profit margin is:
Net profit margin percentage = (net profit / revenue ) x 100
Think about additional areas that can cut into your bottom line, such as labor, rent, marketing, repairs/maintenance, technology, and other overhead expenses. Can you make your labor processes more efficient? Can you utilize better technology and equipment to increase production?
Another opportunity to help increase your margins is strategic menu pricing. Steer away from pricing menu items solely based on food cost percentage. Hard and fast rules do not apply to menu pricing. However, a deep look at your target market, food cost percentage, labor, and competition will be required. It is wise to examine your menu and look at each item’s contribution margin (menu price – food cost). You will notice that it’s not always the items with the lowest food cost percentage that are the most profitable! This type of analysis can help you further identify ways to increase your margins.
Think of the old saying, “You can’t save your way to prosperity,” which is very fitting when it comes to food costs at your restaurant! If you would like your menu or labor processes analyzed for efficiency, please reach out to Synergy.
Reducing Food Waste in the Kitchen
Food supply chains across the globe are getting increasingly connected, streamlined, and more efficient. In the developed world, the increase in low-cost food supplies is creating a culture of high waste.
According to a New York Times article, Americans waste about $160 billion a year in food. Worldwide, close to 1.3 billion tons of food is discarded per year. Another study by Food Waste Reduction Alliance found that 84% of unused food in restaurants ends up in the trash.
To further illustrate the scale of waste, projected sales for the entire restaurant industry in 2019 is $863 billion, $160 billion of which is destined to decay in a landfill. That is a lot of money lost on inefficient storage, portion sizes, or too much inventory. With food costs reaching approximately 30% of typical expenses in the food industry with thin margins, food waste reduction can be an easy and accessible way of quickly increasing revenue.
Here are some general ideas to help reduce food waste:
One common source of waste is holding too much inventory compared to expected sales. Getting more efficient with identifying trends in sales can help manage the amount of inventory needed. The goal is to have enough inventory to supply consumers while prolonging the shelf life of excess inventory to minimize waste.
Another place to start is to create an audit to identify trends in the kitchen. We can learn a lot by identifying the types of items that wasted regularly. Creating a log of items that are discarded and recording the reasons for the waste will help identify problems ahead in the chain. We might find that the waste is due to cold storage temperature or food handling processes, for instance. Using a FIFO (first-in-first-out) food rotation system can help eliminate food waste due to spoilage.
Of course, waste culture is shared in part by the consumer. The prevalence of cheap food and lots of it means larger portion sizes. Reducing portion size for the consumer means less waste and reduced cost. However, the implication of reducing portion size is unattractive due to the competitive nature of the business, especially in American super-sized culture. However, we can balance consumer expectations by focusing on the least to most popular items. Strategically reducing portions can help cut waste and maintain customer satisfaction.
These are simple ideas to start, but there are many more complex strategies to cut costs and minimize waste. The main point here is to illustrate that waste is a huge issue in the industry, and even taking a few simple steps can help to minimize waste and thereby increase revenue. To find out more about waste reduction strategies using data-driven and experienced techniques specific to your operation, please contact Synergy.
Innovations in Non-Plastics
Last Monday was Earth Day – this worldwide event is to bring awareness of the importance of environmental protection. That awareness also extends to the foodservice industry. On Monday, April 22, 2019 (coinciding with Earth Day) the City of Los Angeles put a new ordinance into effect, aimed at reducing single-use plastic waste. This new law requires that plastic straws be only given upon request in restaurants that have over 26 employees.
This eco-conscious move comes at a time when more and more cities are taking action against the use of single-use plastics. To reduce plastic waste, last year Seattle enacted a ban on not only plastic straws but plastic utensils as well, making compostable/biodegradable alternatives available instead. Restaurateur Danny Meyer recently announced that plastic straws would be eliminated from all U.S. Shake Shack locations, a move that Starbucks plans to achieve globally by 2020.
The trend is clear—foodservice companies are getting more environmentally friendly (either by force or choice) amidst the increased global concern over plastic waste. So what kind of alternatives are available to help restaurants comply with new laws against plastics? What are compostable straws made of and what do they look like? What are the costs?
Surprisingly, there are already many straws made from alternate, more eco-friendly materials. Innovation in this area is booming! Currently available are straws made of bamboo, paper, hay silicone, glass, steel, corn plastic, and even pasta! For the most economical value, a restaurant would likely opt for biodegradable paper straws which cost an average of about 5 cents a piece, which is double the cost of traditional plastic straws. It is easy to find non-plastic straw alternatives available in bulk from your usual restaurant product supplier or popular online sites like Amazon.
Is Wait Time a Problem for your Restaurant? Check your Efficiency
There are multiple facets in a restaurant that can either decrease or increase efficiency. When we think from a consumer’s perspective, food should be received as described and promptly. Wait time is a large factor when people are making their dining choices. In just a few clicks, people can even check live wait times at certain restaurants via Google Maps. If wait time has been a particular issue for your restaurant, it’s time to dig a little deeper.
Is your menu too complex? Do you have too many items on your menu? How simple are the items to execute? Understanding the elements of your menu is crucial. Inefficiencies in the back of house are directly correlated to long wait times for your guests. Making sure you have in place easy-to-follow procedures for prep and cooking will ensure smoother operations.
Even with solid procedures in place for the back line, if your kitchen space isn’t organized, efficiency will suffer. Is there enough space for your staff to freely move? Is equipment strategically placed to ensure flow of movement and easy access? How well is space being utilized when it comes to storage?
Is your restaurant point of sale system simple to use and up-to-date? Getting orders to the kitchen should be a streamlined process. Some point of sale systems include additional features like inventory control, employee time-clock, and even table management.
Front of House
Another consideration is your mix of dining room tables. The rule of thumb is that you only get 75% occupancy at a table. If you have a large number of four-tops, you are probably only seating three people at them at best. Moreover, if you are seating two people at a four-top, that means you are wasting a table and only getting 50% occupancy which directly impacts wait times. It would be prudent to carefully look at the number of guests in a party and maybe consider adding more two-tops tables to accommodate smaller parties which will directly impact table turns and wait times.
And this is just the tip of the iceberg. There are numerous ways you can increase your restaurant’s efficiency which will, in turn, assist in reducing guest wait times. If you would like a detailed operations assessment to uncover areas for increased productivity, please contact Synergy.