How to Deliver Quality and Service in Your Restaurant

How to Deliver Quality and Service in Your Restaurant

When guests come to your restaurant, you should treat them as if they are friends visiting your home. Treating your guests with care and providing an exceptional place for them to enjoy a meal is part of the reason they will come back to your restaurant again.

Exceptional Quality

When customers come through your doors, they expect quality in every aspect of the restaurant. Guests are looking for a value in the things they see, taste and touch, and so providing them with exceptional quality will certainly leave a good taste in their mouths.

Food Quality

Food and beverages are probably the biggest indicator of quality that a customer notices. Food quality is not only important to the customers' impressions of the overall restaurant experience, but it is important for the their health, as well. Guests' health should never be compromised. Although not all restaurants can boast the best quality food in town, they can still take measures to ensure that food is stored and prepared safely. Take the following considerations when assuring food quality in your restaurant:

Be sure to follow proper first-in, first-out (FIFO) rotation with all food products.

Properly label and date all food products.

Never serve food that has expired.

Prepare products safely, avoiding cross-contamination with dangerous bacteria or cross-contact with allergens.

Wash hands before and after handling food products.

Prepare and serve foods at proper, safe temperatures.

Quality Atmosphere

When guests enter your restaurant, they should feel as though they are in a special, comfortable place. Try these suggestions to create a superior ambience in your restaurant:

Make deliberate choices with lighting. Consider your concept, and be sure the strength of the light suits the tone you wish to portray to your guests.

Choose music carefully. Make sure the volume of your music is audible but not distracting. Music should help create the ambience rather than overwhelm it.

Decorate appropriately. Decorate your restaurant with a special, unique theme or focal point.

Keep the restaurant spotless. Even a quick-service restaurant needs to demonstrate a high standard of cleanliness for customers to feel good about the quality of food.

Maintain the temperature. Maintain a comfortable inside temperature in your building. 70F is usually acceptable. Minimize drafts or hot spots from lights as much as possible.

Memorable Service

Perhaps even more important than food quality is the service the customers experience from the time they enter the restaurant until the time they walk out the doors. Although restaurants thrive because of sales, the sale should never be put before the customer's needs.

How to Speak with Customers

In any restaurant or food service environment, speaking to customers should always involve the utmost respect and courtesy. This goes for all workers, from drive-thru attendants to servers at fine dining establishments. This is rather idealistic. However, restaurant workers should follow these general guidelines when speaking with customers

Use respectful titles, such as "sir" and "ma'am."

Be optimistic, and speak with a smile.

Never interrupt or talk over guests' conversations if you can help it.

Know your menu so you can speak intelligently to educate guests.

Listen with respect and care to what the customer has to say.

Be sure you ask questions to clarify a customer's order if there is any confusion.

Be honest and straight-forward with customers at all times, especially if there is a problem.

How to Answer the Phone in a Busy Situation

When answering the telephone in a busy restaurant, never answer with "Thanks for calling, hold please," as this immediately belittles the person on the other end.

1. If the phone rings while you are helping another guest, politely ask the guest to excuse you for a moment, then answer the phone.

2. After greeting appropriately, let the person on the other line know you will be able to help them momentarily.

3. Finish helping your current guest and come back to the phone within the next minute if possible.

How to Serve and Clear Food

Serving etiquette varies depending on the restaurant serving type. The restaurant types where this matters the most are upscale or fine dining restaurants. Managers should train their servers in proper table etiquette if they are unsure of how to proceed in a serving or clearing situation. The following tips describe the basics:

Serve in the appropriate order. Service order is usually an important standard upheld in fine dining restaurants or formal banquets. In these dining establishments, it is appropriate to serve the guest of honor first, then the female guests and then the males. In less formal restaurants, it is acceptable to simply serve women before men.

Serve and clear food from the left. Servers should serve and clear food from the diner's left side. Some formal restaurants advise serving with the left hand for these tasks. Serving from the left is best since most diners are right-handed. Politely excuse yourself if you find that you are interrupting or reaching.

Serve and pour beverages from the right. Serve or pour beverages from the diner's right side since that is usually where the glasses are set on the table.

Serve the correct order to each guest. When serving food, servers and food runners should not call out entres to see who at the table claims the dishes. Servers and food runners should have a system to identify which plates correspond to which guest without having to mimic an auction house.

Never rush a party to finish. Good service extends beyond the meal to the entire length of time the party is inside the restaurant.

Clear all plates at the same time. Unless otherwise requested, clear all plates and empty glasses at the same time, and before presenting the check.

Speed of Service

Speed of service is an important phrase in most quick-service and fast-casual restaurants. These restaurants capitalize on convenience and speed. They often have a speed of service goal built into their policies. See the examples below:

A fast-casual pizza place might have a speed of service goal of 10 minutes from the moment the order is taken to the moment the guest receives the pizza.

A smoothie shop or coffee house might have a more aggressive goal of three minutes, since these drinks require less assembly and preparation.

Speed of service is integral to a positive dining experience no matter the restaurant service type. A guest will likely form expectations as to how long they should wait for the food, depending on the restaurant. The guest will be annoyed if his two-dollar cheeseburger took ten minutes to serve, but in a fine dining restaurant, that guest will probably not get upset until he has waited half an hour or more for his entre. Make it your goal to accommodate all guests with the same quality food within the same time frame at all hours of the work day.

Caring for Upset Customers

Now and again there are bound to be problems. A customer may be dissatisfied with his meal or may find the quality to be below his standards. Sometimes guests will find the need to vent anger or annoyance before the problem can be resolved. Be sure to train servers the proper ways to handle customer complaints. Retaining upset customers can be a challenge. When you put in the effort and respect to recover distressed customers, you may be able to convince them to return to your establishment in the future. Learn MoreCustomer Comment Cards

Customer comment cards are a great way of evaluating the customer experience. Customer comment cards are typically set out on the table or delivered by the server at the end of the meal. Customers can rate qualities of the restaurant, such as food presentation, menu pricing and server friendliness. Learn MoreCaring for Upset Customers in the Restaurant

Even if all food service personnel do their best to please the customers that come through their doors, not every customer will find satisfaction with the service offered. Guests usually have their reasons for complaining, but it is up to the restaurant staff to rectify the problem and make a positive lasting impression.

Why Customers Complain

Occasionally, customers will find something that offends their taste and bring it up with the server or manager. This is typically due to one of the following:

Slow service, Rude servers,,Inattentive servers,Incorrect orders, Dirty dishes,Dirty facility

Poor quality food and drinks

1. Listen and Acknowledge

When a customer has a problem, they tend to bring it up with the server, or an employee working in the Front of the House (FOH) first. It is this employees job to listen attentively. He or she must find out, as politely and compassionately as possible, what seems to be the problem. This employee should take the time to hear out the issue completely before determining what can be done. Sometimes the customer just wants to be heard, and having an employee acknowledge the issue is all it takes to settle the problem. In other cases, however, it is helpful for a manager to get involved.

2. Apologize

The next step is for both the server and the manager to step in and apologize. Even if the offense was not intentionaland it hardly ever isthe apology will set the guests mind at ease and help to dissipate the negativity.

3. Rectify the Problem

From here, the server or manager must do what he or she can to fix the problem. The goal is to go above and beyond the expectation so that the guests distaste is transformed into contentment. This can take many forms, depending on the complaint.

The meal is remade and comped

The meal is replaced and comped

The guest is given a dessert on the house

A new server is assigned, if needed

A coupon for a free meal is given to the guest

It always helps to compensate, or comp the food in question. However, this is no substitute for top-notch customer service. Even if a meal is compensated for a guest or a free meal coupon is given, it takes sustained attentiveness, politeness and positivity to recover the customers trust.

4. Thank the Guest

Finally, it is important to thank the guest for giving you the opportunity to repair the problem. Training your servers to always thank the customers simply for coming in will do wonders.

5. Correct the Situation

After all is mended, the manager should take the time to debrief the team tactfully, so as not to place blame. Communicating the circumstances helps to assess the situation, preventing the same thing from happening in the future

How to Develop a Restaurant Employee Handbook

The employee handbook, or employee manual, is one of the most important documents your restaurant will produce. It is one of the most effective ways of training your employees to do things correctly. The handbook establishes the policies, procedures and other components that ought to be present in any business. This article provides guidelines for creating an employee handbook for the first time, or assessing and updating your old one. No matter how you make it, always consult with an employment lawyer or restaurant human resource professional before finalizing and publishing your handbook.

Components of an Employee Handbook:

Disclaimer and Acknowledgement Employment Policies Work Hours and Payroll Benefits Appearance Standards Behavior Expectations and Policies Cash Handling Policies and Procedures Operating Policies Harassment Policy Drug and Alcohol Policy Health and Safety Emergency Procedures Company Property and EquipmentWhy Your Restaurant Needs an Employee HandbookThere are several reasons why creating an employee manual is critical to your restaurant's success. This document is home to your specific restaurant policies, local and federal laws, employment standards and working procedures for all areas of the restaurant. Check below for specific ways the employee manual will make your life easier.

Enhance professionalism.The employee handbook shows your staff that you are serious about your restaurant, and more importantly, their performance. You have taken time to create it and your staff needs to take serious time to read and understand it.

Answer employee questions before they ask.Many employees want to know what they need to do and how to do it. A good employee handbook will cover this, so you will spend less time answering the same questions over and over.

Improve employee confidence.Restaurant employees do better work when they are confident of their job requirements and the specific procedures. This translates to better customer service as well.

Elevate level of consistency.When you have the policies written out, you can consistently train every employee. Conversely, if you need to take disciplinary action with someone, the employee handbook gives you written documentation of procedures in case of any messy legal action.

Writing the Employee HandbookHere are a few tips for writing the employee handbook that will make it as useful as possible for your restaurant staff:

Write multilingual handbooks.If necessary, make up employee handbooks in different languages to accommodate any non-native English speakers on your restaurant staff.

Write so employees can understand.No need to write the employee handbook in unfamiliar jargon or legal terms. Write simply and clearly so any of your employees can understand it. After all, they are your main audience.

Produce specialized handbooks.Depending on your restaurant, you may find that handbooks for every type of employee make the most sense. In full service establishments, job descriptions can be very different and may require separate policies and procedures. Limited or quick service restaurants often function just fine with one universal employee handbook.

Add information as needed.New situations come up, and you may need to make additions to your handbook in order to cover procedures that you feel are important enough to be in the handbook. To avoid publishing new handbooks every time this happens, print off the new procedures and hand out copies with the next round of employee paychecks.

Essential Components of an Employee HandbookAll employee handbooks will look slightly different due to variances in concept, layout, service type, location, hours and specific policies enforced by the owner or manager. Despite differences in content, the following components are important in any restaurant employee handbook.

1. Disclaimer and AcknowledgementThe disclaimer and acknowledgement section of your restaurant's employee handbook establishes that employees have read and understand the policies, procedures, expectations and benefits outlined in the handbook. It also asserts that the handbook does not act as an employment contract. This is especially important for states with "at-will" employment laws, which are laws delineating that an employment relationship can be terminated at any time, by the employer or employee, without cause or liability.

2. Employment PoliciesA section on hiring policies helps outline any state laws that apply to interviewing, hiring and otherwise bringing people to work in the restaurant. An employee handbook needs to cover any applicable state or federal employment law, including the commitment to Equal Opportunity Employment. Handbooks may also include information on the following:

Recruiting

Interviewing

Applications

Background checking

Finding the right people Learn MoreTerminationInclude policies on dismissing employees from the restaurant. Be sure to cover both voluntary and involuntary termination and what behaviors will lead directly to termination. Learn More3. Work Hours and PayrollIn this section, discuss any labor laws that were not covered in the previous section, and to outline the expectations and procedures for employees while on the job. Include the following concepts, tailored to your restaurant:

Labor laws.Labor laws differ from state to state. Include information about age requirements, work permits, overtime pay procedures or information about what work employees can safely perform while on the job. Learn MorePayroll.Employees will want to know when and how they will be paid. Let employees know when paydays occur, how they will receive their wages and if direct deposit is available. Learn MoreScheduling.Discuss how the schedule will be created and how often. Include procedures for asking for time off, missing a shift and otherwise changing the schedule. You may want to cover what happens when an employee misses a shift without notice. This information will often require extra enforcement and communication in person. Learn MoreBreaks.Most state labor laws also include directives for employee breaks and meal periods. Employees must be aware of their rights according to area labor laws. They should also be aware of how to clock out for a break, where they can spend the break and how many breaks they are allowed in a given shift. Learn MoreTip reporting.This applies mainly to servers. Make sure the tip-reporting policy in your restaurant is clearly communicated and enforced. Include instructions on how to fill out a tip reporting sheet and potential consequences for inaccurate reporting. Learn MoreWorkers' compensation.This section should have information on employee injuries or illness as a result of working at the restaurant. Make employees aware of their rights and educate them about how to stay safe on the job.

4. BenefitsEmployees want to know what benefits they are entitled to while employed at your restaurant. Make sure they are aware of any of the following benefits your restaurant offers:

Employee meals.Employee meals are a common benefit in many restaurants, in which restaurant employees receive one free meal for each shift worked. Learn MoreTime off.Businesses are typically required to provide time off to their employees when they are sick and during holidays. Restaurants, however, may employ unique policies regarding time off. Be sure to clarify your restaurant's policies, including the following circumstances if applicable:

Holidays

Sick Days

Vacation Time

Overtime

Bereavement

Maternity Leave

Jury Duty

Insurance and 401K.Although a less common benefit, some restaurant managers and workers are eligible to receive medical, dental and vision insurance as well as 401K packages. Learn More5. Appearance StandardsBe sure to identify the proper uniform and appearance standards for every job position in your restaurant. This includes the following:

Shoes

Uniforms

Hair

Facial hair

Nails

Jewelry

Tattoos

Piercings

Uniform requirements will differ in just about every establishment, so make it clear what your specific standards are, including the following aspects of employee appearance: Learn More6. Behavior Expectations and PoliciesIt is essential that a restaurant handbook define acceptable and inappropriate behaviors in the restaurant. When employees know their expectations and their limits, there will be fewer problems in the workplace. Learn MoreTeamwork.Emphasize teamwork in your employee handbook. Make sure that you foster an environment of trust and cooperation as much as possible.

Customer service.Depending on your restaurant layout and service style, you may have several different employees interacting with customers for every order. Make certain that all employees are aware of your restaurant's customer service goals and how to exemplify them.

Evaluations.Let employees know that their performance will be periodically evaluated. These evaluations can even lead to increases in wages, if your restaurant is in a position to offer this.

Rewards and discipline.Establishing a rewards policy and a discipline system in the restaurant will help employees understand the consequences of their behavior, whether good or bad. Identify unacceptable behaviors, as well as those that result in immediate termination, such as harassment. In addition, clarify those behaviors that will make the employees stand out as leaders. Learn MoreConflict resolution.When employees show their superiors or their coworkers disrespect, the whole atmosphere of the workplace can turn sour. Have behavior standards and resolution practices in place for conflicts that do arise. Learn More7. Cash Handling Policies and ProceduresMany restaurant employees will be handling cash while at work, either as a server, bartender or cashier. Having cash handling policies in place will help instruct employees on the proper way to handle money to minimize loss and maximize security and accuracy. Learn More8. Operating ProceduresThis section of the employee handbook includes any operational procedures that you feel are necessary to communicate to your employees. This can include opening and closing procedures, proper ways of operating equipment or supplies, special safety procedures and service guidelines. Generally, the more details you provide in this section, the better.

9. Harassment PolicyHave a stringent policy on workplace harassment. Provide information about sexual harassment and other forms of workplace harassment, as well as instruction for how to avoid it, how to identify it and how to report it. You may even want to include a statement of acknowledgement for every employee to sign, stating that they have read and understand the no-harassment policy. These can be kept in employee files. Learn More10. Drug and Alcohol PolicyDrug and alcohol abuse can occur in any restaurant. Not only is it harmful to the employee, but it can be dangerous to those around him or her. Be sure your policies are clearly defined. This especially applies to restaurants that serve alcohol and allow employees to drink after their shifts have ended.

11. Health and SafetyKeeping your restaurant staff safe on the job should your highest priority. Be sure to provide consistent, thorough training to all employees through regular staff safety meetings and on-the-job coaching. Have proper labels and posters in place to remind employees of hazardous chemicals or potentially dangerous procedures. Also check out the Health and Safety Section of the FoodServiceWarehouse.com Education Center for more information.

12. Emergency ProceduresIn the event of an extreme weather emergency, power outage or burglary, your restaurant staff needs to be prepared with the proper precautions and procedures. Educate your staff about the importance of awareness and security when it comes to crisis situations. Learn More13. Company Property and EquipmentSome restaurant employees have access to computers, vehicles or other equipment belonging to the restaurant. Make sure employees are aware that they need to respect restaurant property of all types.

Fundamental Up selling Strategies for the Restaurant

Up selling is essentially a practice of embellished suggestions aimed at getting the guest to spend more money. It is a valuable marketing strategy in any restaurant, but it must be trained and practiced in order to be effective as a sales technique. Restaurant servers, cashiers and kitchen staff who have contact with the customer should know appropriate and effective ways to up sell menu items. These useful methods for up selling in the restaurant will help increase sales and tip money.

How to up sellUp selling is the art of enticing customers to buy something extra without them knowing you are selling something.

Offer Multiple Suggestions

Workers can up sell whether they work in a quick-service restaurant or a swanky lounge. Here are two prime examples:

At Wendy's, the worker at the cash register will usually ask the customer if he would like to "Biggie size" his order. This means getting a bigger drink and bigger order of fries for a few extra cents. The customer often feels as though he is getting more bang for his buck, even though he probably did not want the bigger size to begin with.

A guest asks the bartender for a vodka martini. Rather than simply taking the order, the bartender asks, "Which type of vodka would you prefer? We offer Grey Goose and Sky vodka." The bartender brings up two of the most expensive varieties of vodka in order to up sell to the guest, or get him to pay more for his martini.

Use Embellished Descriptions

Servers and restaurant workers can up sell by describing the ingredients, cooking process or presentation of a dish as a means to entice customers and convince them to buy. Often, servers will not actually ask a question but simply launch into descriptions to whet their guests' subconscious appetites. Make the items sound exciting by trying the following methods:

Suggest an appetizer by explaining the ingredients and preparation with vidid language. For instance, say "You will find our appetizers especially intriguing, including the broiled goat-cheese quesadillas which are sprinkled with pepper and thyme and served piping hot."

If a diner is already sure of what he wants, ask him if we would consider any sides to go with his meal. To a diner ordering chips and salsa, a server might say, "A side of our fabulous guacamole would complement your chips and salsa, since it is prepared with fresh avocados and tomatoes, as well as our signature spices." Describing the side as a smart attachment to the meal is a great way to make the meal seem incomplete without the extra purchase.

Five Keys for Up selling Dessert Items

Wine Pairing

Wine can provide an excellent complement to a meal. Hence, wine pairing is a great way to up sell to your customers. However, satisfying the customer's palate with a well-paired wine requires training, experience and extensive knowledge of both the food and wine menus. Taking the time to learn about food and wine pairings can improve the customers dining experience and make even more sales for the restaurant.

Desserts in particular are lucrative but challenging items to up sell. The guest is often satisfied from the main entre and may not ask for dessert directly. Listed below are five popular strategies for up selling desserts:

1. Present dessert menus after lunch or dinner. Bring out dessert menus for each diner after clearing dinner plates. Seeing the descriptions and ordering from a menu may make the guests feel more in control of their choices.

2. Use vivid descriptions. Describe a few of the dessert specials using vivid imagery to appeal to the guests.

3. Bring out the dessert tray. Utilize a dessert tray to show guests how tasty the desserts look.

4. Offer low-calorie options. Do not forget to offer low calorie dessert options, which may sway diners who are trying to watch their figures. Also suggest coffee or tea.

5. Show off your desserts. When someone does order a dessert item, be sure servers or runners carry it at table level. This way, other diners can see and smell the dessert and may be convinced to order one of their own.

How to Integrate Up selling Strategies into Training Sessions

Up selling does not always come naturally. Make up selling part of the training regimen by offering tips and suggestions to restaurant workers and servers at the start of every shift, as well as during initial training sessions. Managers and lead servers can help their staff learn to up sell by following these suggestions:

Allow servers to taste menu items. Provide opportunities for servers to taste menu items, including daily specials.

Train in menu knowledge. Make menu knowledge a priority, so servers can speak intelligently about the preparation and quality of food.

Suggest vivid descriptions. Offer ideas for how to use colorful language when describing dishes. For example, avoid simply offering "a slice of chocolate pie" and instead up sell "an exquisite slice of delicate chocolate mousse pie with a drizzle of caramel." The second description makes a big difference.

Role-play with servers. Role-play with servers to demonstrate how to ask questions or offer more items

Provide rewards. Hold contests and offer incentives for servers who sell the most dessert or daily special, giving food or gift cards as prizes.

Breaking the Language Barrier: Training and Managing a Multilingual Restaurant Staff

Approximately one third of workers in the quick service restaurant industry are non-native English speakers.1 With an increasing population of multilingual food service workers, the importance of communication and management styles geared toward non-native speakers is paramount to a smooth operation. Consider these guidelines to create a culture of acceptance and make the most of your non-native speakers skills and talents.

Tools for Employees

When working with non-native English speakers, or even those who barely speak English at all, it helps to have materials translated into the appropriate languages so these employees can learn the job as well as a native English speaker.

Multilingual training materials. Bilingual or multilingual tools like booklets, quick-reference cards, employee manuals and menus are helpful when training someone new.

Multilingual POS system. Many operators overlook simple business components like the Point of Sale (POS) system. Instructions for clocking in and clocking out should be in English, Spanish and any other language frequently spoken in the restaurant.

Audio or video tapes for employees. Some restaurant chains will provide audio or video tapes to employees to help bridge the language gap.2 The tapes include important words and phrases to help non-native speakers with typical English restaurant terminology.

ESL classes. On occasion, a restaurant or company will offer education as part of the benefit package. This allows employees the means to study English as a second language on a deeper level, improving confidence and skills in the restaurant or any other workplace.

Visual tools. These can include posters that outline the proper step-by-step procedures for cleaning an area or color-coded bilingual labels to identify chemicals.

Tips for Management

Although non-native English speakers and other bilingual employees often need extra training, some real benefit comes from managers who take the time and make the effort to incorporate an understanding of other languages and cultures into the workplace.

Training materials. Many chain restaurants or large companies offer training classes for managers to learn enough of a language to communicate with their non-English speaking employees. Even a few functional words help communication as a whole, especially between kitchen managers and kitchen workers in a busy restaurant.

Learning the culture. Managers who learn about their employees cultures as well as their languages will often be better able to accommodate any differences in communication styles. For example, some communication difference that vary by culture may include:

Volume of speaking voice

How close one stands to another while holding a conversation

If people look directly at one another while speaking3Opportunities for advancement. Improvement in English can be perceived as excelling in the job itself, and any significant improvement in the workplace should be rewarded with a promotion both in job responsibility and pay rate.

Appreciate diversity in the workplace.Bilingual and multilingual skills are often an important addition to the workplace. Many people go out to eat, and it helps when you can provide exceptional service to all of your guests, especially non-native English speakers in the area. Some restaurants look specifically for qualified job candidates who are able to speak a language other than English to help drive business in a multi-cultural area.

Diversity Efforts

Although linguistic and cultural differences can form a barrier, diversity can enhance the workplace environment in many ways. In 2002, Nation's Restaurant News and the Multicultural Foodservice & Hospitality Alliance jointly delivered a Diversity Study. Of about 150 responses from companies within the food service industry, almost 40 percent responded that they have programs in place to hire and retain qualified non-native English speaking workers.4 These programs include the following:

Management succession plans

English language classes

Support networks

Initiatives like these help promote diversity. They capitalize on the skills and talents of people who often fall under the radar because of a language barrier. On the whole, diversity can be a positive concept for a restaurant. Diversity in the workplace shows and encourages cultural acceptance both for employees and guests.

Basic Restaurant Accounting

The key to any successful business is simple: profits. Restaurant businesses need to make money to survive, and in order to make money, restaurant owners, operators and managers need to know basic restaurant accounting systems to control cash flow, reduce losses and maximize their profits. Keeping track of your finances will put you in a good place to monitor your cash flow and make the most of your business in the long run.

Cash Flow Management

Managing cash flow means tracking all the cash that is coming in and leaving your restaurant. With sales and expenses always playing a balancing act, estimating future cash flow can be a guessing game until you get the feel for your restaurant's business patterns, or when the money comes in versus when it goes out. Essentially, restaurants strive for more income than expenses. When a restaurant is able to bring in more money than it spends, it maximizes its net income, and the overall profits grow. Learn MoreKeeping Record

Recording your cash flow, including income and expenses, is critical to your restaurant's accounting procedures. Your income includes all cash, credit card and check sales received. Outgoing expenses should be recorded with the help of receipts and invoices. Your Point of Sale (POS) system typically keeps track of all credit card and cash sales, and all receipts should be filed and recorded in a Profit and Loss document (P&L). It is also essential to keep a close eye on your inventory counts.

Taking Inventory

Your restaurant's inventory includes the supplies, products and ingredients you have on hand to prepare and serve food and beverages. Inventory is an important factor in managing restaurant accounting, because it represents an investment in food and supplies that are needed to make a profit. You should always consider your inventory as cash in a different form, and count it consistently and thoroughly. Learn MoreProfit and Loss Statement (P&L)

A restaurant's profit and loss statement, or P&L, is much like an income statement for the restaurant. This document serves as a report to summarize income, expenses and inventory, illustrating a restaurant's total profits and losses over a period of time. It is best to prepare a P&L each week if possible. This makes it easier to track numbers and comparing reports from month to month and even year to year.1 A P&L statement includes information relevant to your cash flow, including sales and labor expenses. Learn MoreAccounting Software

Although large chain restaurants may have an in-house staff of accountants available to do the leg-work, many restaurants use computer programs to help record their financial information. The best software includes a Point of Sale (POS) system, financial software, and the software to integrate the two. Fully-integrated systems like these can take the burden off operators and help them fully analyze their financials by running comprehensive reports. Learn MoreThe Restaurant Profit and Loss (P&L) Statement

A restaurant's profit and loss statement, or P&L, is much like an income statement for the restaurant. This document serves as a report to summarize income, expenses and inventory, illustrating a restaurant's total profits and losses over a period of time. Most P&L statements involve two major sections:

1. The section first specifies any sources of revenue, including food, beverage sales, merchandise sales, catering, and any other source of income important to the restaurant. This section also includes the usage cost associated with the sales, known as the Cost of Goods Sold (COGS). Learn More 2. The other section involves all operating expenses in the restaurant. This includes payroll, rent, utilities, and repairs, among others

The difference between the revenue and the expenses determines whether the restaurant reaps a profit or suffers a loss at the end of a given period.

Restaurant Revenue

All sales income is recorded on the P&L statement. There are usually separate lines on the statement for the different sources of income, including the following common sources of restaurant revenue:

Food and beverage salesThe most obvious means of income in your restaurant is food and beverage sales, since this is the reason most people come to your restaurant in the first place. Food sales will likely be your major source of income. However, this depends on your restaurant concept. If you run a juice bar, juice will constitute most of your sales.

MerchandiseMerchandise is another method of boosting profits. Merchandise includes souvenirs, gifts and other retail items unique to your establishment that can increase sales, especially from tourists or holiday shoppers. Merchandise includes the following:

Gift certificates or gift cards

Cookbooks

T-shirts

Hats

Mugs

Prepackaged food or beverages

CateringAnother method of creating income is by catering, or engaging in other off-site selling opportunities. Catering parties and events for customers is a great way to increase daily sales and reach out to people who have never tried your restaurant. Limited service restaurants can offer a catered lunch option for surrounding businesses. Smoothie shops can sell smoothies at local high schools and sporting events. It pays to learn about your surrounding area and how you can take your sales outside your restaurant's walls.

Restaurant Expenses

There are many expenses involved in operating a restaurant. Restaurant owners or operators can include whatever expenses they like on their P&L, as long as it helps them to stay organized and aware of the costs they face. The following are commonly included on restaurant P&L statements:

Cost of Goods Sold (COGS)Cost of Goods Sold (COGS), also known as Cost of Goods Used or simply usage, is the cost of the products, or goods, that your restaurant sells. Essentially, this is the money spent on inventory. This is usually denoted just below total sales on the P&L report. To control usage and make the biggest profit, the restaurant must purchase enough products to serve your customers without running out and without having too much left over going bad on the shelves. Learn More

PayrollAlso called labor cost, this is one of the most important expenses in your restaurant. Part of your business's income must go to salaries and hourly wages in order to provide paychecks for your employees. This is considered a controllable cost, however, since the manager can determine how many hourly employees to schedule, and can manipulate the number of people on a shift at any time. The trick is to balance labor in order to provide great customer service without scheduling more workers than you need. Learn More

Operating ExpensesThere are several daily expenses incurred while running the restaurant, such as purchasing or replacing china, flatware or glassware, as well as any linens or paper products that may need to be cleaned or replenished. These can be lumped into operational expenses on your P&L.

Occupancy CostsKnown as occupancy costs, rent or mortgage, property taxes, water and sewer taxes, gas and electric, insurance, and repairs all fall under the restaurant owner's responsibility. These are typically known as fixed expenses since restaurant owners usually have to pay a steady amount on these costs every month.

When to Prepare a P&L ReportIt is best to prepare a P&L each week if possible. This makes it easier to track numbers and compare reports from month to month and even year to year.1 The main reason for the P&L report is simply to track these profits and expenses to see how well your business is doing. When you know the numbers and trends, you know what changes you can make to improve your business profits.

Sample P&L Statement

The categories listed on the P&L, including all the line items in each category, are dependent on the information the owner needs or wants to analyze. P&L statements will look different for each restaurant, depending on the type of food product, the required occupancy expenses, and the operations costs unique to the establishment. Look below for a sample restaurant P&L:

Download a sample Profit Loss Statement (xls)

Restaurant Cost of Goods Sold (COGS) Made Simple

Cost of Goods Sold (COGS), also known as "cost of goods used" or simply "cost of usage," is the cost to your restaurant of the food and beverage products your restaurant sells. Since your goods pertain to your food and beverage inventory, COGS is determined with the following equation:

The beginning inventory means the amount of product that you have in your kitchen and storage rooms at the beginning of a period, usually the beginning of the week. For instance, if Monday is the start of your business week, and you have $5,000 worth of food and beverages on your shelves, $5,000 is your beginning inventory.

Purchases means the amount of inventory you purchase in food and beverage orders in that period of time. If an order of another $3,000 worth of inventory arrives on Friday, this would be considered the purchase.

Ending inventory, then, is the amount of food product you have left when the work week is over. Although you purchased product during the week, but you will have less inventory at the end of the week since you sold the food to your customers. For example, at the end of the work week, you have $4,000 worth of inventory remaining.

For example, if your restaurant has $5,000 worth of inventory on hand on Monday, and then purchases another $3,000 of food and beverage product, you have a total of $8,000 worth of inventory at the beginning of the week. The following Monday morning, you arrive at the restaurant and count $4,000 worth of inventory. This gives you a usage cost, or COGS, of $4,000. This means that you sold $4,000 worth of inventory. The equation looks like this:

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To be even more accurate, you can use the equation below: "Transfers out" include any products that you send out of the restaurant to another area in your restaurant (such as from the bar to the kitchen) or to another restaurant altogether (often another restaurant in the same chain). Thus, "transfers in" are products that you transfer from another restaurant to your own. If you have no transfers in or out, simply leave these parts of the equation at zero value. It is important that any transfers are recorded because any items coming in or leaving your kitchen will affect your inventory count.

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INCLUDEPICTURE "http://img4.foodservicewarehouse.com/education/images/operations/cogs9.jpg" \* MERGEFORMATINET Referring back to our example from above, imagine the following scenario: due to the unanticipated celebrity of your weekend special, chicken with exotic fig sauce, your restaurant is about to run out of exotic figs. Since you are a chain restaurant, you are able to phone another location and ask if you might be able to use some of their exotic figs. It happens that the other location has excess inventory of figs and can transfer one box of figs to your restaurant. You drive over the following morning to pick them up. One box of exotic figs costs $85.00. Keeping with the same numbers as above, your COGS equation would look like this:

The other restaurant operators would do the opposite; that is, remove $85.00 worth of inventory from their kitchen and subtract it from their beginning inventory numbers.

Food Cost Percentage

One of the most important numbers restaurant managers and owners look at is food cost percentage. In food service, this percentage represents the portion of sales spent on food. Since you reap sales from the inventory you use, you can determine the food cost percentage by money you spent on food sales (COGS) by your total food sales. The following equation may help clarify the process:

Using the original example, one would determine the food cost by taking the COGS dollar amount and dividing it by the total sales for the week. So, let's say the sales for the week were $12,750. Your new equation would look like this:

INCLUDEPICTURE "http://img3.foodservicewarehouse.com/education/images/operations/cogs13.gif" \* MERGEFORMATINET In this case, about 31% of sales were spent on food and supplies. This is a fairly typical food cost for a restaurant.

Categorize the Cost

It is very helpful to break down your food cost into all the types of foods and beverages your purchase. For instance, a 31% food cost may be broken down into the following food categories:

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INCLUDEPICTURE "http://img2.foodservicewarehouse.com/education/images/operations/cogs18.jpg" \* MERGEFORMATINET If food cost is high, categorizing like this will help determine where the money is being over-spent. Operators can keep a much better tab on food cost when they know exactly what percentage of the total cost they are spending on each category of food.

Determining Gross Profit

The COGS equations are essential for figuring the restaurant's gross profit:

Gross profit is calculated by deducting money you spend on food and beverages from your total revenue. Using the ongoing example, you would subtract your COGS ($4,000), from your total sales ($12,750) in order to find your gross profit. The example looks like this:

INCLUDEPICTURE "http://img3.foodservicewarehouse.com/education/images/operations/cogs21.gif" \* MERGEFORMATINET Although gross profits may be included in your Profit and Loss (P&L) statement, the important number to look for is the net profit. Net profit, or actual profit, is the gross profit minus all operating costs such as labor, rent, repairs, and marketing costs, to name a few. This is your restaurant's true profit after all is said and done. Learn MoreMaking profits is the restaurant's number one goal. In order to do this, the manager needs to simultaneously bring in revenue and control costs in the restaurant. This is one of the biggest challenges, but also one of the manager's most important responsibilities. Maintain a steady, profitable food cost by adhering to all recipes, assessing purchasing procedures and properly conducting inventory in your restaurant. Basic Tips for Creating and Using an Annual Budget in Your Restaurant

Creating an annual budget involves estimating about how much money you will spend in different areas of your restaurant. For instance, you know there will be expenses associated with running the business, but it will help you enormously if you can anticipate those expenses and stay within a financial plan from one month to another. An annual budget gives you goals to reach and limits to beat. The budget is also essential to plan for the restaurant's future spending. Here are a few tips for creating a budget that works for your restaurant.

Plan by Month or Period

Most restaurants use a system of 12-month or 13 four-week periods to track their annual budget. By breaking the budget down into these types of sections, it is easier to see when money is moving in and out of the restaurant.

Determine Your Projected Sales

Ascertaining your projected sales, also known as a sales forecast, helps you figure out how much your restaurant will make in sales during a given period. There are many ways to determine your restaurant's projected sales. It comes down to making an educated estimate about the customer traffic and resulting sales your restaurant generates.

Anticipate Your Costs

In the restaurant, budgeting is often a game of balancing costs and income. In fact, a budget is much like a profit and loss (P&L) statement extended over a longer period of time. Be prepared to account for the following costs in your annual budget:

Rent or mortgage payments

Taxes

Insurance

Labor/payroll

Utilities

Loan payments

Operational supplies

Repairs and maintenance

Marketing

Training

Food service professionals suggest that you plan to spend about 30 percent of your budget on food, 25 percent on labor, 10 percent on rent or mortgage, and 3 percent on utilities.1 The rest goes in small parts to operational expenses, marketing, taxes, maintenance and other variable costs. These are simply estimated guidelines to follow, as every restaurant's expenses and budget are different. Look below for a graphical representation of these suggested expenditures:

Know Your Breakeven Point

The breakeven point is the volume of sales needed to cover all expenses without making a profit. It is the bare minimum amount of sales the restaurant operation needs to bring in to survive. It is important to know your restaurants breakeven point so that future financial decisions can be made in hopes of making a reasonable profit.

Analyze Your Financials Every Period

Examining your P&L and your budget on a weekly and monthly basis will help you keep your bases covered in terms of realizing your expenses and income. Evaluate your budgeted operating expenses and your actual expenses, as well as the net profit you anticipated and what your restaurant actually made. Make a note of any areas in which your expenses exceeded your budgeted amount.

When budgeting for the year, especially if you are doing so for the first time, it helps to have a budget worksheet. Download a sample budget worksheet (xls) to your own back office computer.

How to Price Menu Items in the Restaurant

Books on restaurant management will tell you that pricing your restaurant menu items is somewhat of a vague process. You can figure out how much you are paying for food supplies and simply charge three times as much. You can try to out-do your competition by lowering your prices, or you can guess and hope your customers will pay the prices you apply.

The options above, although not unheard of, probably incur too much risk. After all, your menu, pricing included, is one of the main reasons your customers come through your doors. They want a quality product and they want to pay your operation accordingly. Your prices will influence how your restaurant is perceived by the public. Prices directly affect your restaurant's profitability, so it is important to spend the time required to get it as close to perfect as possible. Although there is no exact formula, the guidelines in this article will help demystify the process so you can gain the most benefit from your decisions.

Things to Consider Before Pricing

There are a variety of aspects that affect restaurant menu pricing methods. Consider the following influencing factors and how they affect your restaurant before you begin pricing or changing menu prices.

Direct costs. These are the ingredient costs associated with the food item itself. This also involves the food cost, how you portion the servings, and how much is spilled, overcooked, thrown away or otherwise wasted during the preparation process.

Indirect costs. Indirect costs are those that do not include the actual ingredients that make up a dish, but the aspects of your restaurant that add perceived value or quality. These provide significant basis upon which to charge higher prices.

Preparation and labor. The labor to prepare a menu item is considered an indirect cost. Menu items that require time, effort, artistry or talent to prepare merit a higher menu price than something that simply requires heating and plating.

Overhead expenses. Overhead costs for items such as dcor, product presentation, amenities and marketing efforts. Although slightly less common, these can create added value and validate higher menu item prices.

Volatile food costs. Many raw commodity food items, or basic ingredients with minimal quality variance, may fluctuate as often as daily. For instance, flooding in Texas could wipe out a tomato crop, causing supply to drop and demand to increase. You may want to set your menu prices slightly higher for items that tend to swing in price, especially for when food costs increase unexpectedly. This way, you will avoid losing money even when paying slightly more for those products.

Competition. Check out your competition on a regular basis. You might even go out to eat at your rival restaurants and take advantage of the opportunity to see what you can improve about your own operation.

Service type. Prices will undoubtedly change depending on whether your restaurant is a fast-casual restaurant or a fine dining restaurant. Be sure your prices represent the service value your customers receive. For instance, full service restaurants can always charge more for their hamburgers than quick-service joints, because full service restaurants are also providing greater ambience, better service and often better ingredients than the quick-service alternative.

Pricing boundaries. Determine your boundaries. Every restaurant situation is different and prices will vary depending on location, preparation and simple supply and demand. Figure out the very least you can charge while still making a reasonable profit in your business, and then determine the highest price your market will pay for your items. Gather information about demographics and average income levels in order to find out the prices people in your market area will pay.

Common Menu Pricing Methods

Your restaurant concept, that is, the type of food, service and ambience has a lot to do with the different challenges a restaurant owner might face when pricing menu items. There are other methods of pricing menu items, but below are some common suggestions for how some restaurant owners choose to proceed:

Ideal Food Cost Pricing MethodThis method calls for an owner to consider the actual cost of a menu item, then consider his or her ideal food cost percentage. Ideal food cost percentage varies, but typically lies somewhere between 25 and 30 percent. The two are divided and voila, you have a menu item price. See the example below:

Using the ideal food costing method method, the chicken entre should be priced at $14.16. To use this method, you need to know the cost of all the ingredients in the recipe for Lemon Rosemary Chicken, from the half cup of lemon juice to the pinch of fresh rosemary to the chicken itself. You also need to account for any side items that come with the entre, and factor that into the menu price as well. Every food item on the plate matters. Since $14.16 is not a typical menu item price, you may want to lower it to $13.99; that is, if you cannot think of an inexpensive way to increase the perceived value of the plate enough to raise the price from $14.16 to $14.50.

Did You Know?

Items like fryer oil, salt and pepper and condiments can affect your overall food cost. You should account for a variance of about 4% to keep from losing money on these indirect costs. For instance, if you are shooting for a food cost percentage of 32 percent, you should actually try to hit 28 percent to account for those extra costs.1 Learn More

However, since factors like indirect costs, price volatility and competition are important to consider, this may not be the most reliable pricing method. Applying a price markup to all items in one fell swoop like this may inaccurately and unreasonably over- or under-price some of your items. And finally, it is always important to pay attention to the market and see what the customers in your area are willing to pay.

Competition Pricing Method

The restaurant owner using this method assigns prices to items based on the general market price or the prices assigned by the competition. Usually, the owner will either price the item to be the same as the competing prices, price it slightly lower to get those looking for a bargain, or price it higher to attract those looking for higher quality. This means that a restaurant has to work within a certain price, including labor and preparation, potentially putting a strain on the chef.

Beware of Price Gouging

Food service operations in ballparks or stadiums tend to charge people more for their food and goods, since guests do not have the option to leave and get food somewhere else. However, some places take this too far by charging more than what is considered reasonable. Be careful of those upper limits and be fair to your customers.

For instance, if the owner prices the Lemon Rosemary Chicken at $14.00 because that is just under the current competition's prices, and the ideal food cost percentage is 30 percent, the chef needs to make sure the kitchen is producing this item at no more than $4.20. This can be complicated.

Demand-Driven Pricing MethodThis concept is based on the economics of supply and demand. For instance, restaurants in airports or concession stands at sports stadiums can get away with charging more for their food items because it is the only source of food in the vicinity. The demand for food is greater than the supply, so people are willing to pay more for it. Restaurants that offer specialty menu items or a unique and exciting ambience can get away with charging more since it reflects both the food and the experience.

Study your market and your customer base before pricing your menu items. You will most likely know what prices are simply too high, and the last thing you want to do is drive your customers away. Make your prices competitive and reasonable, and make sure you are offering the value appropriate for higher cost items.

Evaluate Current Profitability

When you know which menu items are the highest grossing items (meaning they result in the most profit before any other expenses are considered) then you know which items to promote. In the chart below, you can see by looking at the last column that the king crab legs are the most profitable item on this seafood menu. Even though the food cost is greater for the crab legs, the gross profit is higher as well. To many operators, it is the gross profit that matters most. To maximize your profit, you might consider raising the price of the other fish entres slightly, or simply train your serving team to upsell the crab legs.

FishFood CostSelling PriceFood Cost %Gross Profit

Halibut$2.75 $12.79 21.50%$10.04

King Crab Legs$7.50 $20.79 36.40%$13.29

Salmon$6.42 $18.99 35.60%$11.57

Increasing Profitability

Raising menu prices is a delicate issue. Many restaurant owners are unsure how to handle it because of how it might negatively affect their consumers' perception of the restaurant. Try the following suggestions to increase your restaurant's profitability:

Promote your value. Marketing your brand and your best products can communicate your value to potential customers. Use coupons, advertisements, and other marketing strategies to start making more money.

Make your profitable items stand out. Filler items are those that take up space on your menu pages but do not offer much in the way of gross profitability. Make sure you make your highest grossing items stand out on the menu.

Add appeal to basic menu items. You can make your menu items more flexible and add value by creating a more attractive name, an intriguing sauce or dressing or a special theme to the food. For instance, taking a normal hamburger and drizzling it in a spicy honey barbeque sauce might add a little pizzazz and appeal, giving the public more incentive to try it and the owner a reason to slightly increase the price.

Change prices in small increments. Small increments are less noticeable when you need to increase prices, and small amounts of revenue can add up to a large gain in profit. Additionally, items ending in odd numbers such as .95 or .99 are less off-putting than whole numbers. 2Use specials to fuel guest interest. Full-service restaurants are able to create occasional specials that guests can order off the menu. Although specials can be created from the food you already have in your inventory, they should not be concocted from week-old leftovers. Menu specials are a great way to create new, exciting menu items to entice your customers. If the special goes over well, you can certainly consider adding it to your menu to start making a consistent profit from it.

Top Ten Tips for Controlling Food Cost in the Restaurant

Food cost is one of the highest costs in the restaurant. In order to keep food cost percentage, also known as Cost of Goods Sold (COGS) at a manageable rate, follow these tips:

1. Keep an eye on your profits and losses (P&L).When you know what profits you are bringing in as well as the fixed expenses affecting your business, you can better evaluate your options and see where you can cut costs. Learn More2. Conduct inventory consistently.Regular and thorough inventory counts will help you stay in control of your usage and the costs associated. This is especially important for high-cost items such as meat and liquor. Learn More3. Price menu items properly.When you price your menu items reasonably, your customers will continue to pay you and you will make a profit on your products. Learn More4. Portion food correctly.Be sure to serve food in portions that will not over- or under-fill plates. When customers are finished eating, look at the plates as they come back to the kitchen. If there is a lot left on the plate, or you are consistently wrapping up take-home containers, you may be over-portioning your meals.

5. Handle food properly.Enforce first-in, first-out (FIFO) rotation for all perishable foods. Keep foods at proper temperatures and cook all foods correctly to avoid waste and prevent contamination. Learn More6. Rethink the garnish.Garnishes often consist of fancy fruits or layers of fresh lettuce which add visual appeal but are rarely eaten. Use less expensive food items or remove garnishes entirely to save on food costs.

7. Keep a record of all food waste.Use a waste chart to write down any foods that are made incorrectly, thrown away or spilled. Failing to record this "usage" will skew inventory reports and throw off your food cost percentage.

8. Be consistent with food purchases.Consistency with food purchases comes with time but can help you to anticipate expenses from week to week and keep your food costs steady. Learn More9. Create a rapport with suppliers.Once you are in business a while, your suppliers will get to know your regular food orders and you will become familiar with the cost of your purchased goods. Be sure you stay in communication with your suppliers in case of any problems with food quality or any issues with food prices. Learn More10. Train employees to care.When your employees see how your inventory represents potential profitsas well as their paychecksthey are more apt to stay aware of waste, portioning and overall food quality.

How to Control Labor Costs in the Restaurant

Operating a restaurant involves many expenses. Essentially, you incur labor costs when you have employees working for you. Labor is an operational expense in just about any restaurant, predominantly including hourly wages for staff members.

Labor Cost Awareness

Labor costs are typically understood as a percentage of sales. To figure your labor cost, use this equation:

Many restaurants hope to run a labor percentage below approximately 20 percent. When the costs begin to climb, anxiety levels rise as well. Still, simply paying your employees less will not solve labor cost issues. The keys to controlling labor costs are improving workplace productivity and scheduling your employees wisely.

Control Your Labor Costs with Improved Worker Productivity

Increasing productivity improves your overall operation by building employee skills and confidence. Take time to provide your staff with sufficient training and communication.

Cross-Train Your Staff

Cross-training is beneficial to both the employee and the business, since the worker will have a wider range of skills and be able to help in multiple areas of the restaurant. This allows the manager to schedule fewer workers while still being able to achieve the same production and service standards. Some suggestions for cross-training include:

Train your prep cook to handle the grill

Train your hostesses to work as back-up servers

Train bussers to help run food to customers

Conduct Frequent Staff Audits and Reviews

Another great way to help improve productivity is to perform regular audits. Take the time to watch and assess your employees performances. If you find that a large portion of your employees work days includes inordinately long breaks or downtime, it might be wise to revise your schedule. Conducting face-to-face reviews with each member of the staff will help communicate your thoughts and concerns.

Control Labor Cost With Precise Scheduling

Make sure you have constructed a budget to help keep track of your annual sales and expenses like labor. Through your budget, allow a percentage of your sales to cover labor expenses. Then, create a staffing schedule to reflect your budgeted allowance for labor expenses. The following tips elaborate these guidelines:

Break down your annual budget. Break down your annual budget into monthly budgets to help divide the money into weekly sections. This will give you a weekly budget, from which you can determine labor costs and make an appropriate staffing schedule.

Design a new weekly schedule for all employees. Relying on a fixed schedule week after week fails to acknowledge shifts in projected sales, changes in the weather or other factors that can affect your business. Adjust the number of staff scheduled each week to keep compliant with weekly budget constraints. Learn moreMonitor clock in/clock out times. After every shift, make sure that all employees have punched in and punched out exactly according to the schedule. Managers can usually use tools within the Point of Sale (POS) system to monitor and alter this information when necessary.

Discuss all schedule change requests in advance. Switching shifts can create problems when people start to work overtime, working more hours than the budget allows and potentially breaking a law, if the workers are youths. Be sure a manager is constantly aware of any proposed changes in the schedule.

Avoid Over-Staffing

It is often tempting to schedule more people than necessary in order to ensure that the business runs without any kinks. The reality is, however, that there will always be a few kinks in the restaurant business. Scheduling too many employees will increase your labor costs and reduce your overall profit, hurting your business overall. If you find that you have over-scheduled, you can send staff members home early. Train your people to work quickly, accurately and efficiently while also treating guests with respect and care. This allows you to operate at a high standard while still hitting your target labor percentage.

See below for a useful worksheet recording employee labor hours, pay rates and total labor hours per shift.

Restaurant Employee Wages and Benefits

Wages and benefits vary slightly from restaurant to restaurant, even for the same position. If you are a manager hiring people for the first time, or simply assessing wages in order to make changes to your current payroll, check out the average national statistics.

Restaurant Employee Wages

Median Wages for Restaurant EmployeesRestaurant worker wages are different depending on the type of restaurant, the geographical location, and the worker responsibilities. The chart below illustrates several restaurant workers' average hourly and annual wages, as well as the highest and lowest percentile wage estimates for the jobs, according to the United States Bureau of Labor Statistics:1Employee PositionHourly WageAnnual Wage

AverageLowest - highest percentileAverageLowest - highest percentile

Food Service Managers:$23.39$13.58 - $35.61$48,660$28,240 - $74,060

Restaurant Cooks:$10.56 $7.27 - $14.55$21,960$15,120 - $30,270

Fast Food Cooks:$8.11 $6.34 - $10.34$16,860 $13,180 - $21,510

Restaurant dishwashers:$8.20 $6.56 - $10.38$17,060$13,640 - $21,580

Bartenders:$9.49$6.66 - $14.50$19,740$13,850 - $30,170

Restaurant Hosts/Hostesses:$8.54$6.54 - $11.34$17,770$13,610 - $23,580

Waiters and Waitresses:$8.93$6.31 - $13.55(with tips)$18,570$13,120 - $28,180

Minimum WageMinimum wage is the lowest rate businesses can legally pay their employees. In the restaurant industry, employees' salaries are often determined by assessing the national minimum wage and raising it accordingly. As of July 24, 2008, the minimum wage is $6.55 per hour.2 Minimum wages increase every year. Learn MoreCommon Restaurant Employee Benefits

TipsTips are often considered a benefit of working in a restaurant, but many servers and bartenders would most likely consider it part of their income. These restaurant workers usually work for a pay rate of less than minimum wage, but take home a good deal more based on their tip income. Tips are sometimes distributed among kitchen staff and bussers as well. Unlike other restaurant benefits, tips are given by guests, not restaurant owners. Learn MoreMeal BenefitsRestaurants often offer daily employee meal benefits to their workers. These usually involves one discounted or free meal from the restaurant menu per employee per shift. However, each restaurant meal policy is different, depending on corporate rules, food type and budget. Learn MorePaid Time OffRestaurant managers may receive a certain number of paid sick days and vacation days, depending on the restaurant's policies. Hourly workers typically need to request time off in advance and do not get paid for vacation days or sick days.

Uncommon Restaurant Employee Benefits

InsuranceRestaurant managers and other supervising positions are often entitled to insurance benefits in the restaurant. Sometimes these benefits are even extended to hourly workers, but this depends on the company. Insurance benefits typically include the following:

Medical

Dental

Vision

Life

Disability

401KA 401K is a tax-deferred retirement savings investment plan sponsored by an employer. Employees who are offered a 401K plan transfer a portion of their income to the 401K account each month and plan to withdraw it after retirement. Much like insurance, 401K plans are not offered by all employers, and when they are, they are mainly offered to managers and assistant managers. Since many restaurant workers are youths who may not be fulfilling their careers in the restaurant, 401K benefits are not quite as common for these hourly workers.

Stock OptionsStock options are a rare benefit, and one that almost exclusively offered to restaurant managers or partners, if ever. However, in 2000, the United States House of Representatives passed a bipartisan bill amending the Fair Labor Standards Act (FLSA). This bill allows restaurants owners to offer stock option bonuses to hourly restaurant employees. According to the National Restaurant Association, the passage of the bill was a major step in improving restaurant employer-employee relationships.3 Stock options are often seen as a way the employee can make money in the stock market. Thus, a benefit like this may improve recruiting results and employee retention in the restaurant.

How to Make a Restaurant Schedule

A restaurant schedule is essential to your operation. Not only will the schedule delineate which employees will work the daily shifts, the schedule is a crucial way to anticipate the daily sales, control labor costs and ensure that all parts of the operation have the help they need to run smoothly. The most important goals of the restaurant schedule include guest satisfaction and controlled labor costs.

Finding the Staffing Balance

Staffing your restaurant requires a certain finesse. A manager has to keep in mind that a restaurant schedule needs to reflect the business needs first. This includes the quality of service your restaurant provides its guests, as well as keeping labor costs under control. A big part of this balance is achieved by appropriately scheduling staff members.

Some restaurants find it difficult to avoid the temptation to overstaff. Overstaffing the restaurant can help provide improved attention and service to guests, but can cause your labor costs to diminish any profits you receive. On the other hand, understaffing can appear to be a viable way to save money. However, this quickly leads to employee burnout and diminished service standards, which ultimately harms your business more than the few saved dollars. Finding the balance and the perfect staffing levels for your establishment takes practice and depends on the people you have hired, your restaurants patronage, your budget allowances and other variables.

Creating the Schedule

When making the schedule for your restaurant, keep in mind that there are numerous ways to go about it. Make sure to keep in mind that the simpler the better, since this can be a time-consuming process. Project sales and labor data as best as possible to keep within your budget, and plan for the unexpected when it comes to the employees.

Use TechnologyThere are several ways of actually making the schedule. Modern technology simplifies the process, allowing for daily and weekly labor cost calculation as you plan. Some Point Of Sale (POS) systems are so advanced that they will prevent staff members from clocking in too early and record when they clock out later than scheduled. This is an easy and effective way to maintain your labor budget as well as your schedule.

Make PredictionsAs you work to create the schedule for each week, try to predict customer counts and sales. Predicting the amount of business you will do in a given week is one of the keys to preparing an accurate schedule. After all, your goal is to schedule for a well-functioning restaurant. Be sure to match these predictions with the percentage of your annual budget and sales to ensure that you are hitting your labor cost target.

Mindfully Schedule Your EmployeesCreating a schedule can be time-consuming and even tedious. You must keep in mind the availability of each employee, as well as their skills and talents to make sure your restaurant has the people it needs to run successfully. Scheduling a mix of strong team members and those who need extra help can be a good strategy. It is also a good idea to stagger employees hours, overlapping them during busy shifts such as lunch and dinner times.

Finally, be sure to collect information from employees beforehand, as far as their availability, vacation plans and other needs. Of course, your main priority is to run the business, but try to be prepared with this information so that you are not left with the task of covering shifts at the last minute.

Often, a restaurant will create a schedule to show how all the different areas of the restaurant will be staffed. This is often called the Master schedule, and will reflect how the dining room, kitchen, bar and any other areas of the restaurant should be staffed in order to handle the service the restaurant expects. The example below shows the positions, days, times and even the labor costs of employing the staff:

Using the Schedule

Regarding scheduling, it is a good plan to have a set of regulations regarding how it will be used, where it will be posted, how it can be altered, and how often a new one will be made. Consider these factors and communicate any pertinent information to your employees. This type of planning can save a good deal of headache for any manager.

Schedule FrequencySome businesses will create a new schedule for each week, which can be a good way to stay abreast of sales projections as well as staff needs or other variables. However, this is up to the restaurant.

Employee AccessOnce you have created the schedule, hang it where your employees can see it and make copies of their upcoming shifts for the week. Some businesses have the ability to post their schedules online so employees can access it at home, school or work.

Altering the ScheduleNo matter how much time and effort you put into creating the perfect schedule, no schedule is going to remain pristine once tacked onto the staff bulletin board. A typical manager is often approached with requests to change the schedule with a multitude of reasons. An employee may become sick after you have created the schedule for the week, and you need to cover his or her shifts. An employee may want to take more shifts to make more money. Another employee may have weekend plans and cannot work the time you scheduled.

In cases like these, have a plan of action. Communicate to employees that managers are the only ones allowed to make changes to the schedule, and must notify a manager at any time they need to change anything. Some employees are more responsible than others, and it can be risky to let employees change things without notifying a manager first.

How to Reduce Staff Turnover and Improve Employee Retention in Your Restaurant

Hiring great restaurant workers is one thing. Keeping them is an entirely different thing. Most restaurant operators realize that their employees are not typically planning on a long-term career in the food service industry. At least, that is the trend according to research from the National Restaurant Association. Research shows that employee turnover in a sampling of full-service restaurants lingered just over an average of 78% in 1997.1 Almost ten years later, another report showed that employee turnover had risen to a rate of 107% for another sampling of restaurants.2 Although comparisons between these two findings are not direct, the research suggests that employee turnover in the restaurant industry is a growing concern for owners and operators.

Reasons Employees Leave

There are numerous reasons for an employee to leave a job. However, the reasons can become amplified by the high stress levels and relatively low pay rates in a typical restaurant. Some of the most influential reasons employees leave their jobs are listed below.

Inadequate Pay Rate

Lack of Recognition

Not Enough Hours

Conflict With Staff or Management

Too Few Opportunities for Advancement

Lack of Employment Benefits

Best Ways to Encourage Employee Retention

Despite the numerous reasons restaurant staff leave their jobs, there are ways you can work to retain them. Finding and training new employees can be a time-consuming and costly enterprise, so taking the extra step to keep your best workers around will improve both your business and your peace of mind.

Offer Pay Raises

Studies show that about one third of all employees who choose to leave the workplace leave for a better paying position elsewhere.3 You should not only offer competitive wages, but when you notice an employee with consistently high performance, take the opportunity to reward them with a raise. Even a small increase is important to keep your best people onboard.

Offer Care and Benefits

Take the time to get to know your employees as people. Learn about their families, pets, hobbies and passions. When you build a relationship of respect and care, your people will feel better about coming to work and likely return the sentiment. Another part of taking care of them is offering them insurance. Whenever possible, offer a benefits package.

Recognize and Reward

Hardworking, committed and ethical employees can be hard to come by. When you find them, be sure they are appropriately recognized. For instance, praise their work in front of their peers. This shows the rest of the team that you like what you see. You might reward an employees achievement with a gift card or some free movie passes. Small gestures like these can let the employee know his or her efforts are not going unnoticed.

Be as Fair as Possible

Employees are looking for someone who is fair to them, especially when it comes to pay rates and scheduling. When determining pay rates, pay fairly according to the offer given during the hiring process. If the employee shows extra effort or increased achievement, then consider discussing a pay increase. Scheduling can be a difficult task, but attempt to assign shifts based on labor budget requirements, positions needed and requested time off. Remind employees that you need to run a business at all times, and that your scheduling choices are made for the good of the company. Learn MoreImprove Communication

Staff members may say they feel a lack of connection between the rest of the staff and the management team. As a manager, be sure to promote healthy communication whenever possible. If you give direction, be sure to follow up afterward. Hold staff meetings frequently. Greet and talk with each employee daily, or as often as possible. Let staff members know what is happening in the business and make them feel that they are a part of its successes.

Resolve Conflicts

Part of a managers responsibilities is to ensure that employees can work together as a team, even when they do not especially like one another. Speak to the whole team about cooperation and the importance of running the business. Take further action if needed, such as mediating a private conversation with just the staff members involved. If the trouble is with your management style, you might speak privately with the employee to see if you can resolve it. You may have to respectfully acknowledge the difference in opinion but still make it clear that you are in charge of their paycheck when all is said and done.

Properly Train All Employees

From day one, all staff members in the restaurant should have an adequate training program. This should include an orientation to the position and the restaurant, as well as all necessary information to perform up to standard, including safety training, equipment training and customer service training, among others. Employees who feel knowledgeable and comfortable in their surroundings will more often feel successful and content with their position.

Provide Opportunities for Advancement

Whenever possible, consider each staff member for potential advancement within the business. For example, take note of employees performance and interests, and offer training programs for hostesses who want to become servers, or dishwashers who would like to move up to line cooks. These types of advancements boost morale as well as interest in the industry.

Restaurant Server Training Guidelines

Most fine dining and casual dining restaurants employ a waitstaff to serve and care for the patrons. Servers are an essential part of your concept; they deliver the positive attitude and respect that create a memorable experience for dining guests. Just as a manager should expect a top-notch server, servers need solid training and ongoing support to succeed.

Initial Training

When servers first start in a restaurant, training is essential. Even if the newly hired server has experience working in a restaurant, they will need an orientation to the new environment, new procedures and a new management team. They may even have acquired some bad habits in their past jobs. Train your new servers right from the start by educating new hires in the following areas:

Restaurant concept. Inform your employees of the history and other interesting facts about the restaurant. Often the restaurant name, founder, owner or structure will have some special meaning or interest value which can engage the patrons and make them feel like part of the concept itself.

Restaurant layout. Servers spend their entire shifts on their feet, moving quickly between the kitchen and the dining room floor. Proper orientation to the layout of the restaurant, including restrooms, emergency exits, storage rooms, kitchen space and dining room arrangement are important to a servers speed and comfort in the restaurant environment.

Menu knowledge. Managers often provide new servers the opportunity to taste several items on the menu before serving them. In order to sell the items, it is essential that servers sample as much as possible so they can suggest a favorite or describe the flavors of the special. Additionally, guests often want to know the nutritional information of dishes, or how they are prepared.

Etiquette. Proper service etiquette is paramount to a memorable dining experience. Servers must be adequately trained in exceptional customer care before they begin working shifts. Provide opportunities to practice proper serving techniques and etiquette by engaging in role-modeling exercises, or by pairing more experienced workers with new ones. Emphasize the desirable traits in a restaurant employee.

For example, use the acronym S.E.R.V.I.C.E. to remind your servers of how they should portray themselves.

Shadowing. Many restaurant owners or managers will require that all new hires spend time shadowing, or following other servers throughout one or more complete shifts. This allows the more experienced server to model proper server etiquette, menu knowledge and responsible behavior to the new hire, easing him or her into the new role.

Instill the right behaviors. Throughout the initial training period, instilling the correct behaviors in new hires is crucial. One of these crucial habits involves writing orders down. This shows a desire for precision and eliminates embarrassing, forgetful moments. Other behaviors that deserve emphasis include:

Completing cleaning duties throughout the shift

Helping team-mates whenever possible

Leaving personal issues at the door

Ongoing Training

Though your experienced servers may not require intensive training sessions, ongoing training can help improve skills and address any recurring issues.

Improve suggestive selling skills. As servers become better acquainted with the restaurant and the menu, they are able to suggest the best appetizers, the most profitable entres and the most irresistible desserts to improve their sales. Some ideas to help guide employees in this direction include the following:

Becoming familiar with the menu

Learning which menu items are most profitable

Gaining knowledge of daily specials

Selecting favorite menu items

Suggesting wine pairings

Upselling menu items

Ignoring vs. smothering a table. When serving a table, it is important to find the balance between ignoring the patrons and spending too much time with them. Training a server to read the attitude at a table is a good way to tell about ho