Ace your inventory
Is your restaurant among the 60 percent of restaurants that don’t take a careful inventory each month? If so, you’re leaving money on the table. According to the Restaurant Resource Group, taking a regular inventory increases profits by 24 percent annually. The restaurant technology provider Orderly says setting yourself up to take accurate inventories involves five steps: First, organize your items so you store everything by category in the proper place, move older items to the front so they are used first, and combine contents of open containers where possible. Doing this prior to the arrival of weekly deliveries makes it easier to store new items. Second, customize your count sheet so it looks just like how you have stored your ingredients on the shelves, then count each item by the pack size number (e.g. pounds of chicken or cases of barbecue sauce). Use the same staff for inventory each time to avoid having to train someone new— and consider incentivizing with preferred hours or comped meals for accurate inventories. Third, review your invoices for the most recent price you paid for every item you just counted and plug those prices into your spreadsheet. Have an organized system (ideally, an online reference) for managing invoices from the moment you receive one until it’s processed. Fourth, calculate your cost of goods sold (beginning inventory costs + purchases - ending inventory costs) and your prime cost (cost of goods sold + labor costs) / total sales). These figures will help you monitor your restaurant’s financial health. For example, aim for your inventory to be no more than 1.5x your cost of goods sold and for your prime cost to be 60 percent or less of your total food and beverage revenue. Finally, communicate to your staff that you are using this system to monitor waste and theft and to ensure you order only what you need.
Protect your intellectual property
In an age when ideas spread around the world in seconds and restaurants are eager to win new social media followers, protecting restaurants’ intellectual property is becoming increasingly important. Modern Restaurant Management relates how in 2013, New York pastry chef Dominique Ansell created the Cronut, which started a sensation after a food blogger wrote about the cream-filled, donut-croissant hybrid. People from around the world visited Ansell’s bakery to claim one of the several hundred Cronuts he made daily, and Ansell registered for a federal trademark to prevent other bakeries from selling the popular pastry under the same name. His success with the Cronut helped him launch new bakeries in New York, London and Japan, as well as a full-service restaurant that opened in Los Angeles this year. Even if you aren’t sitting on a creation as lucrative as the Cronut, you likely still want to prevent employees from taking signature recipes or food preparation techniques with them to the restaurant across the street. Modern Restaurant Management recommends you understand the four ways your intellectual property is protected: through trademarks, copyrights, trade secrets and patents. A trademark can protect your restaurant’s name, logo, menu-item names and, in certain cases, food designs. Copyright law protects your website, menu designs and marketing materials. Trade secrets can comprise your recipes, customer and vendor lists, and special food preparation techniques that give you an advantage over operators who don’t have the information. Finally, patents can protect (for a limited time) machines, manufactured articles, industrial processes and chemical compositions, according to the U.S. Patent and Trademark Office. To decide what you want to protect, take stock of what is most valuable to your restaurant and makes it unique. Also consider your relationships with partners and employees – if you were to part ways, how would your intellectual property be treated?
How much are delivery apps costing you?
Offering delivery has become compulsory for many restaurants. But as restaurant delivery orders climb, often replacing (and not augmenting) sales from customers who visit the restaurant in person, they are taking a bite out of profits, according to a New Yorker report. One operator, who has three fine-casual restaurant outlets in New York City, finds that for every delivery order she sends out, 20 to 40 percent of revenue goes to third-party operators and couriers like GrubHub and UberEATS. While she once managed delivery in-house, she could not keep up with the demand. Now she estimates she is losing money or, at best, breaking even, on her delivery orders. What’s more, delivery orders across the industry are on the rise: While deliveries comprised 7 percent of total U.S. restaurant sales in 2016, Morgan Stanley predicts that number could eventually represent 40 percent of all restaurant sales – even higher in urban settings and in casual restaurants.
Keep sinks separate
Your food preparation sink be just that—not used for any other purpose. If your employees wash their hands in a food preparation sink, they can easily leave behind pathogens that could contaminate food prepared in the sink, Statefoodsafety.com reports. Have a strict policy about which sinks onsite should be used for handwashing and keep an ample supply of soap (and perhaps sanitizer to use after washing) in the dispensers at those sinks.
Show your falafel flair
Is falafel on your menu? It’s one of those rare items that appeals to carnivores and vegetarians alike, thrives in a range of applications and is an on-trend global flavor ripe for the mainstream. Flavor & the Menu says falafel “sets itself up nicely for signaturization and customization,” which can help you make the most of your inventory. In addition to serving falafel in a traditional style inside a pita with hummus, tahini and vegetables, consider adding it to your burger menu with a layer of avocado, creating a Mediterranean-style taco with falafel and pickled vegetables, or offering it as an added protein on salads.
Delegate scheduling to an app
Restaurants that use scheduling software can cut labor costs by up to 2 percent, according to Fast Casual. App-based scheduling stands to save you a lot of time as well. If you haven’t transitioned from manual scheduling yet, consider some potential benefits of a digital system: It can help you set shift times and positions according to historical staffing patterns. It can anticipate sales, which can help you prevent scheduling too many – or too few – staffers during a shift, and avoid paying unnecessary overtime charges. Finally, scheduling software can help you oversee and manage employee availability, shift swapping and time-off requests – all via an app.
Free app tracks ingredient pricing trends
Ingredient prices are moving targets. In a study of more than 410,000 purchases from more than 4,000 food distributors recently, Orderly found great inconsistencies in the prices offered to different clients. The company reports that 92 percent of restaurants are overpaying their suppliers, with mark-ups on certain items hitting 201 percent. Tracking your prices against your historical charges and the overall market will boost your negotiating power. Orderly offers a free app that can give you a sense of national and local pricing trends for more than 100 of the most popular ingredients restaurants are buying. Make sure you scrutinize costs for your most popular items and meet with suppliers regularly to discuss pricing and service.
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