|Ten steps to a more profitable food service.|
By Ed Rehkopf ~ President of Professional Business Communications
Sunday, 14th September 2003
While creativity and innovation are hallmarks of a truly outstanding culinary experience, it is a daily focus on the basics that makes a foodservice operation profitable.
The following ten basic guidelines are taught in every restaurant or hospitality program; it is, however, the daily application of these principles that will make a difference on your bottom line.
1. STANDARDIZED AND COSTED RECIPES
Every recipe for every menu item, both à la carte and catered, must be standardized and costed. This basic discipline ensures consistency of product and ongoing profitability. While the initial set up requires some effort on the part of the chef, it allows each item to be priced based upon its raw ingredient cost. Given the volatility of some ingredients, it is important to revisit recipe costing on a periodic basis. One way to simplify this process is to set up each recipe on a separate worksheet in an MS Excel® file. By linking each recipe ingredient to a master ingredient list, the chef can easily update the master list, hence all recipe costing, on a monthly basis. This discipline, once established, can easily be delegated.
2. PRICING BASED ON KNOWN COST STRUCTURE
The standard method of pricing is to take the cost of each menu item and multiply it by an appropriate multiplier to cover the cost of labor, other expenses, and overhead. For instance a 2 ½ times multiplier should yield a 40% food cost; a 3 times multiplier yields a 33% food cost. This simple formula is all well and good, but if your revenues are below projections and/or your payroll cost or overhead are higher than expected, you may still lose money. Given the interplay of revenues, pricing, volume of business, and cost structure, these numbers must be tracked closely and reviewed frequently.
3. PORTION CONTROL
Standardized recipes are costed based upon specific portion sizes. If untrained or poorly supervised employees routinely serve larger than costed portions, you can kiss your profitability goodbye. Costly meat and fish products should be weighed to ensure correct portion size. Ladles of specific sizes should be used to plate specific menu items. Pies, cakes, and other baked desserts should be cut and served using templates to ensure the correct number of portions are realized. Cooks and pantry workers must be trained to prepare and serve appropriate sized portions.
4. LABOR CONTROL
Labor, both front-of-house and in the kitchen, is the single largest expense in a foodservice operation; it is also a continuing challenge to control. Electronic timekeeping systems make it easier for supervisors to verify employee hours, but regardless of system used, supervisors must monitor payroll hours daily. Close monitoring of employee hours will reduce overtime and milking the clock, while allowing daily comparison of payroll cost to revenues. Front- and back-of-house supervisors should also keep a daily log that notes revenues, meals served, payroll hours, and a subjective evaluation of the smoothness of service. Such an evaluation of each meal period will enable supervisors to better schedule staff.
5. BENCHMARKING REVENUES AND EXPENSES
Benchmarking is the act of measuring and analyzing operating performance. In a food service operation there are many things to benchmark, such as meals served and average check per meal period by day of week; payroll hours by position by meal period or day; and beer, wine, liquor sold per meal period and day of week. When tracked over time, these statistics become the baseline to project and monitor future performance. Benchmarks also allow measurement of member reaction to foodservice initiatives such as new menus or pricing. Most importantly, benchmarking makes supervisors more knowledgeable about their operations. Such knowledge translates to improved operations and bottom lines.
6. ROUTINE AND CONSISTENT INVENTORIES
Inventories are critical to monitor stock levels, avoid shortages, control pilferage, and determine cost of goods sold. Inventories can also be time consuming and inconvenient for hard working chefs. Inventories sometimes get delegated to poorly trained subordinates who miss or miscount key items. Sloppy inventories contribute to erratic cost of goods sold. Poorly organized storerooms contribute to sloppy inventories. Keys to accurate inventories include well-organized storage areas, knowledgeable individuals conducting inventories, routine and timely inventories, and organized receiving documents, invoices, and credits slips. Delegating counts is acceptable if employees are trained. However, having the same employee conduct all inventories without spot-checking and oversight will invite problems.
7. SUGGESTIVE SELLING TRAINING FOR EMPLOYEES
Service employees who are trained in the techniques of suggestive selling can improve your average check and bottom line. Whenever a new menu is put in place, all servers should be provided a “selling sheet” that gives key information about each entree. Such information should include cooking method, ingredients, time of preparation, and enticing descriptors to help sell each item. Just as standardized recipes are important in the kitchen for consistency of product, selling sheets provide the service staff with the knowledge and information they need to sell the product. In addition to entrees, special training should be given for the suggestive selling of appetizers, desserts, wines, and specialty alcoholic beverages. The time spent providing servers with the information and confidence to sell your food and beverages will yield consistently higher average checks.
8. CONTINUAL FEEDBACK TO EMPLOYEES
Every month’s budgeted food sales is made up of how many meals are sold and how much each guest spends on average for a meal. By breaking your projections down into meals and average check and posting your daily targets prominently in the pantry, you provide your servers with goals that connect their daily efforts to your profitability. By comparing month-to-date actual meal counts and average check to projected, you give your employees a day by day record of their progress. Most people are competitive by nature and this simple technique will become a powerful incentive to servers. The same technique can be applied to appetizers, desserts, and bottles of wine sold.
9. FORECASTING AND SCHEDULING
By tracking key benchmark statistics and keeping a daily log of business levels and staffing, foodservice supervisors can develop a routine system of forecasting business levels. While some level of volatility can always be expected in guest patronage, the act of forecasting, when formally done and evaluated after the fact, will assist in maintaining service levels while controlling labor cost.
10. GUEST FEEDBACK
While some guests are vocal with their opinions, many are not. Foodservice supervisors should make it easy for guests to provide feedback. Comment cards must be readily available, periodic surveys should be conducted, revenue benchmarks should be analyzed to measure guest responses to offerings and initiatives, and employees should be trained to routinely report comments made or overheard to supervisors.
Every professional food and beverage manager is aware of these necessary elements to success. Unfortunately, in the ongoing rush of business they are often overlooked. At its root the problem is one of organization. By taking the time to establish systems to address each guideline, by training and delegating tasks, by making each guideline part of the daily routine, each of these steps can be easily integrated into your operation. While the initial exertion may be great, so also is the ongoing payback.
Ed Rehkopf is the President of Professional Business Communications, a company providing written documentation to the hospitality industry. He is the author of Leadership on the Line, A Guide for Hospitality and Service Sector Supervisors and is currently working on a book on hospitality benchmarking. He can be reached at REHKOPF6@aol.com.