Restaurant management tasks naturally fall into two main categories: managing the overall health of the business and directing daily operations. The first three steps on this list—knowing costs, adjusting to meet targets, and forecasting for growth—fall under the first category. The final three—maintaining operational standards, building a positive staff culture, and focusing on customer service—are part of directing daily operations.
Whether you are a new restaurant or an established brand, you need insurance that works for you. Next Insurance is built for small businesses, with affordable, comprehensive bundles for General Liability, Workers’ Compensation, Liquor Liability, and Commercial Property
Whether you are a new restaurant or an established brand, you need insurance that works for you. Next Insurance is built for small businesses, with affordable, comprehensive bundles for General Liability, Workers’ Compensation, Liquor Liability, and Commercial Property
Consider these tasks like spokes on the same wheel, as a high-performing restaurant needs to be strong in all areas to stay on track. Building a positive staff culture, for example, is just as important to a successful operation as figuring food costs.
Let’s dive into the six steps that best illustrate how to manage a restaurant.
1. Know Your Restaurant’s Operating Costs
First, we’ll start with the part that restaurant managers may find tricky: the math.
There are several things that eat into a restaurant’s operating budget. Managing a restaurant of any size begins with knowing these operational costs and expenses and the ways they influence your business. Costs, in particular, show the health of a restaurant more accurately than any other measure. Knowing how to figure these numbers is important and doesn’t need to be difficult. To begin, it is important to know the difference between expenses and costs.
Restaurant Costs vs Expenses
Balancing Restaurant Expenses & Costs
Expenses, food, and labor are where any restaurant spends its money. A restaurant manager can impact expenses by negotiating a flat rate for monthly utility payments, shopping around for the most competitive rates on necessary insurance policies, or negotiating with vendors for complimentary equipment or lower prices. The guts of restaurant management, however, are figuring the fluctuating costs of everyday operations and developing strategies to continuously spend less than what the restaurant generates in revenue.
The two biggest costs are food and beverage and labor. Let’s look at labor first.
Managing Labor Costs
Labor cost is not just the wages that are paid to hourly staff. Labor cost includes salaries paid to full-time employees like chefs and managers, as well as overtime, sick pay, vacation pay, payroll taxes, bonuses, and benefits packages. Labor cost, like all costs associated with the management of a restaurant, is most easily expressed as a percentage of total sales (i.e., Across the restaurant industry, a daily labor cost of 21% to 25% is considered excellent).
The simplest way to figure labor cost is to tally the total wages paid and divide that number by the total sales. Depending on what you hope to learn, you can shift the timeframe from one day to a week, month, or year.
For example, if you want to know if the new clock-in times you rolled out on the last schedule have had an impact, you need to know the labor cost for the previous week. To assess the general health of the business, a month-long range might be more useful. Just be sure that you are using wage and sales numbers from the same timeframe before you plug them into the formula:
(Total wages / total sales) x 100 = labor cost percentage
The wage figures you need will generally be in the payroll processing reports that your payroll processor provides along with your payroll checks. The sales numbers can be pulled for the same period from your sales reports. Nothing makes labor costing simpler, however, than using a high-functioning POS that acts as both your register and your time clock.
A well-integrated POS will have your sales and labor figures in one place and allow you to edit your parameters to tailor a report to produce only the information you want. The POS does the math for you, showing your labor cost percentage in real time.
Most restaurants will look at their overall labor costs as well as separate FOH labor from BOH labor in their daily reporting. This allows managers to see emerging trends in the business and identify opportunities to lower labor costs.
There are more complex methods for figuring different kinds of labor cost. When forecasting for the year ahead, figuring a labor cost by labor hour is helpful. If your restaurant operation is underperforming and you need a more detailed picture of where each dollar is going, figuring labor as a percentage of total operating costs is ideal.
You’ll most often hear restaurant managers speak about food cost. Typically, this is a catch-all term that includes both food and beverage cost. There are two types of food cost to keep in mind: per-item (or per-plate) food cost and overall food cost. Restaurant managers should know how to figure both, as each number is useful in different ways. Per-plate food cost is the best foundation to set your menu pricing. Overall food cost gives you a more accurate idea of your profit margins and how much revenue is flowing through to your bottom line profit.
If you only serve one menu item—which some classic mom-and-pop eateries do—then you may choose to only figure per-item food cost. Most restaurants have more than one item on the menu, however, and the cost per plate can vary wildly between a filet mignon entree and a grilled artichoke appetizer. Figuring the overall food cost of your entire operation provides a better picture.
The simplest way to figure food cost is calculating the cost per menu item. For small restaurants that primarily sell a single item—like tacos or burgers—per-plate food cost can give a pretty full picture of profitability.
To figure per-plate food cost you should:
- List all the ingredients: A burger ingredient list would include a bun, meat, condiments, toppings, and any side items like fries. Don’t forget the garnishes; even pickle spears must be counted.
- Cost each ingredient: Suppose you portion out your own burger patties from meat that you purchase by the pound. A quarter pound burger would give you four portions per pound. Divide the total pound cost of the meat by four to get the cost of one portion. For example, if the total cost of one pound of meat is $4, then the portion-cost of a single patty would be $1 (or $4 for four patties).
- Combine ingredient costs: Let’s say that, in this case, our bun, patty, lettuce, cheese, fries, and pickle spear add up to a plate cost of $2.75.
If your food cost target is 25%, then you know the menu price for this gourmet burger and fries should be $11. Or:
(Item cost x 100) / target food cost = menu price
In this case:
($2.75 x 100) / 25 = $11.00
If all this restaurant sells are burger baskets, and they are priced with the target food cost in mind, a restaurant manager can feel secure that, under normal operating conditions, costs will be in line. They can easily forecast the number of orders on hand based on the inventory as well as spot waste or theft issues.
For example, if the restaurant has $275 of inventory on hand, they should be able to make 100 orders of this burger. If the inventory runs out after 65 orders, the manager knows immediately that something is not operating correctly. It could be spoiled product or lack of portion control in the kitchen.
You may hear per-item food cost referred to as “per-plate food cost” or “plate cost.” These terms are interchangeable. I prefer “per-item cost” since you use the same formula to figure menu costs for cocktails and non-alcoholic beverages.
Just like figuring the food cost per plate, figuring overall food cost begins with your purchase costs. In this case, we’re talking about the overall amount of money you spent on purchases in a specific timeframe. Then you’ll compare your total purchases with total sales (minus comps and spillage) to figure out what percentage of your sales went to food and beverage purchases.
The math looks like this:
[Purchases / (Total Food Sales – Comps/ Spillage)] x 100= Overall Food Cost Percentage
For example, if in the course of a week, a restaurant spent $3,000 on food purchases, sold $14,000, and had $1,500 in comps and food spillage, the total food cost for that period would look like this:
[$3,000 / ($14,000-$1,500)] X 100 = 24%
Use comps sparingly. Without the $1,500 in comps and spillage, the food cost in the example above is a much tighter 19%. Some comps and spillage are inevitable. Sending a complimentary appetizer to a guest who has waited a long time for their entree is good customer service. But if there is a customer service issue that is frequently being smoothed over by comps, that’s a sign that you as a restaurant manager need to improve your operation.
Beverage costs are determined in the same way. To gauge the overall health of your business, you’ll consider food and beverage costs together as a combined percentage of sales. But to get the most insight into where to alter your supply ordering, recipes, or staff training, you should do the math for beverages separately, too.
To get the most detailed picture of your operation, separate your beverage COGS and sales by liquor, wine, beer, and non-alcoholic beverages. Figuring each of these overall costs separately shows you where your operation has the greatest opportunities to improve.
Note on your invoices what category your purchases will be used for. For example, if it is used to make guacamole, lime juice is a food cost. If it is used to make margaritas, however, lime juice becomes a liquor cost. Categorizing products as they arrive will help you know where to adjust if your food and beverage costs are off-target.
2. Adjust Your Operation to Meet Targets
Much of the daily work of managing a restaurant is controlling costs. Daily operational targets for labor and food costs usually come from owners and managers creating a forecast of expected sales. On a daily and weekly basis, you then adjust employee schedules, supply orders, and sales promotions to meet targets.
Your cost targets are, essentially, what percentage of your total revenue can you afford to spend on supplies and labor and still turn a profit. Every restaurant is different, so your targets may veer from the industry standard targets (about 60% for food and labor costs combined; also called Prime Costs).
Expand the sections below for an in-depth look at strategies for managing your restaurant’s costs.
One of the best things you can do to control costs is increase sales. You’ll often hear veteran restaurant managers say “sales fix all sin.” There are several strategies for increasing sales.
Increasing sales is a major part of a restaurant manager’s job description. Many restaurants tie sales growth to their managers’ bonus structures, so their managers earn more as the business grows.
Upselling is the most common way to increase sales. Good restaurant managers train their order-taking staff to suggest specific, additional menu items to customers. Upselling can look like:
- In a full-service restaurant: Challenge your server team to add an additional course—like an appetizer or dessert—to their orders during a shift.
- In a quick service restaurant: Program your point-of-sale (POS) to prompt suggested add-ons based on a customer’s order. This works equally well for staffed terminals in a counter-service restaurant or for self-service kiosks.
You can also drive sales via loyalty programs. Some mom-and-pop shops may prefer a simple punch-card loyalty system. But these days you can find excellent and affordable options for loyalty apps, many of which are built into a POS system. The task of designing and implementing a loyalty program would typically fall to the restaurant manager.
Market the Restaurant
Finally, restaurant managers may implement a marketing strategy to grow sales. Restaurant marketing comes in many forms, including starting a loyalty program, contributing to community fundraisers, buying advertising in local papers, and creating social media ads.
A 2022 study by PYMNTS found that 42% of customers said loyalty programs encouraged them to buy from restaurants. So if your restaurant doesn’t yet have a loyalty program, adding one is an excellent way to grow sales. Other marketing strategies for restaurant managers include:
- Email marketing: Use customer information from your reservation or POS system to create lists of customers by interest (such as wine lovers) or occasion (like January birthdays) and send relevant offers directly to them.
- Social media marketing: Feature your food, beverages, and upcoming events on social media channels like Instagram, TikTok, and Facebook. Find additional strategies in our guide to social media marketing.
- Seasonal events: Look for upcoming local and national events that tie easily into the theme of your restaurant. A family-style Italian restaurant with a large private dining room might want to advertise with a local bridal show ahead of wedding season. A Mexican restaurant would want to be sure to capitalize on National Margarita Day or National Taco Day.
- Internal marketing: There’s a reason you still see table tents and rack cards in check presenters—they work. Customers in your dining room are a captive audience, so don’t forget to promote upcoming events directly to them. If you’re accepting reservations for your New Year’s Eve bash or offering a new happy hour menu, print eye-catching rack cards to let customers know.
As with most tasks, good restaurant management requires you to track the return on investment (ROI) of your marketing efforts. This is easier to do with a modern restaurant POS system that can manage a rewards-based loyalty program and track an endless number of promotional codes so you know which campaigns are working.
Suppose your food costs are in line, but your labor costs are consistently off target. There are some specific steps a restaurant manager can take to have an impact on labor cost.
Use Technology to Optimize Schedules
Base your staff’s shift start times around when the restaurant is busiest. A POS system can easily show you your sales per hour, making this strategy a snap. A POS that syncs with your scheduling software can also enforce the schedule by preventing employees clocking in early for scheduled shifts. It may not sound like a big deal, but if you have employees clocking in five to 10 minutes early every day, it can add up to thousands of dollars over the course of a year.
Update Your Service Style
The fastest-growing style of restaurant is the Quick Service Restaurant (QSR) model, where customers order at the counter, pay in full, and then wait for their food. In some cases, QSR restaurants give customers a number to take to a table and have service staff to run the food to them.
Another option is to place scannable QR codes on tables or order counters, allowing customers to order and pay via their smartphones. QR code systems typically also include optional alerts to notify customers when their food is ready so they can pick it up from a service window themselves. Models like this create only one hourly labor cost center and can help keep costs down.
Cross-train Your Team
In addition to enabling you to reduce staff when business slows, cross-training makes it less likely that you will be short-handed when an employee is out sick or running late. Cross-training is probably the best way to reduce labor cost in the back of the house, as well.
Spread Sidework Tasks Through the Day (and Week)
Sidework is the restaurant industry term for the non-service-related tasks that must be completed to keep the restaurant running. Tasks like cleaning reach-in refrigerators, folding napkins, polishing glasses, and organizing the dry storage room are all sidework. These tasks can be tackled during lulls in service, allowing you to save labor hours at the beginning or end of a shift.
Avoid Overtime & Break Penalties
Federal law requires employers to pay time-and-a-half for hours their employees work over 40 in a workweek. Some states require time-and-a-half pay for hours that are worked over eight in a day. Other states require employers to pay a full hour’s wage as a penalty to staff that do not get a scheduled meal break.
Check your local labor laws and keep an eye on the hours your team is working to avoid accruing penalties. These are an avoidable cost, and the best restaurant operations plan ahead to run an efficient operation.
Don’t Forget Your Payroll Liabilities
Employers should expect to pay an additional 10% above the cost of employees’ wages to cover payroll taxes, unemployment taxes, and workers’ compensation insurance. If you are targeting a 30% overall labor cost, your daily overall labor costs should be 20% or lower to stay in the 30% target range. In most locations, the kitchen staff earn a higher hourly wage than the front of the house staff, so it is not uncommon to see daily labor costs break down to 12% labor in the kitchen and 9% in the dining room.
Controlling food and beverage costs are as important as controlling labor. Controlling food cost requires the cooperation of your whole staff. The manager placing the orders, the prep cook stocking the new deliveries, and the cook or bartender preparing the final dish or drink for customers all have hands-on opportunities to impact food cost. On a lesser scale, every staff member that enters a walk-in refrigerator or dry storage area can affect the spoilage, spillage, or shrinkage of a restaurant’s supplies.
Avoid Spoilage & Spillage
Spoilage is just what it sounds like—products spoil before you have a chance to sell them and turn a profit. Spillage refers to items that are prepared but cannot be served or sold. A bottle of milk that expires before you can sell it is spoilage; a milkshake that gets dropped on the floor and breaks is spillage. In either case, your restaurant loses money on these items.
Some spoilage or spillage is inevitable. But a restaurant manager can train employees to reduce their occurrence. The team in the kitchen and behind the bar can reduce spoilage by labeling all food items with the use-by date, and store them in accordance with FDA food storage guidelines. New items should be stored behind older items so that items closer to spoilage are used first—as most health departments advise “First In, First Out” (FIFO).
Spillage is typically caused by human error. These items are usually errors like steaks that are not cooked to the correct temperature or cocktails that a customer did not enjoy. The staff that takes orders, whether at a counter or tableside, can help prevent spillage by accurately answering questions about the menu items and avoiding mis-rings in the POS.
Know Your Inventory
You can’t prepare and serve what you don’t have on hand, but you also don’t want to over-order inventory, especially perishables. Accurate inventory checks and sales forecasting help managers keep stock levels on par with daily sales. Keeping par with sales is a huge way to reduce spoilage.
Par: “Par” is the restaurant industry term for the inventory needed to meet daily demand.
Regular inventory counts help manage par levels and prevent over-ordering, especially on fresh foods. For smaller operations with tight margins, a weekly inventory may be more helpful than a monthly count. Weekly inventories allow you and your team to become deeply familiar with your physical inventory. If theft is contributing to a spike in food cost, a weekly inventory will help pinpoint when the product is disappearing as well as telegraph to any would-be pilferers that someone is keeping a close eye on the stock.
If you don’t have the steam to gear up for a full physical inventory count every week, you can stick to inventorying only your top-selling items, or the ones that are most likely to “walk away” like reserve wines, top-shelf spirits, pricey cuts of meat, or bottled ready-to-drink beverages.
Shrinkage is the term used to describe unexplained missing product. If after an inventory count you have less product than you expected based on your sales, voids, and comps, then you have shrinkage. The most common reason for shrinkage is theft by customers or employees. Investigating shrinkage is one of the most frustrating challenges a restaurant manager will face, because the people with the greatest opportunity for theft are the restaurant’s employees.
Customer theft is typically obvious. A customer may steal the tip jar from a service counter, grab a bottle of wine and make a run for it, take cash off of a neighboring table, or leave without paying. Employee theft can go unnoticed for days, weeks, or months.
There are some things you can do to deter thrift before it happens.
- Install security cameras: And make sure your staff and customers know that you check them.
- Perform regular inventory counts: As mentioned above, if your staff knows that you regularly count your on-hand supplies, they are less likely to steal. And on the off-chance that some product is missing, regular counts (ideally weekly) help you identify losses before they are out of control.
- Compensate your staff well: Employees who are well-paid are less likely to steal. A one-time payday won’t be worth risking their job. If you underpay or overwork your team, it could lead to the sort of ill will that leads to theft.
- Learn basic bookkeeping: Bookkeepers are an excellent timesaver for restaurant managers and owners. But they are also in a unique position to embezzle from the restaurant. So, it is important to know what you are looking at when checking the restaurant’s books so you can identify suspicious line items and transactions.
Tools for Managing Restaurant Costs
Price: From $0 per month
Price: From $69 per month
Price: From $179 per month
Price: From $0 per month
Price: From $0 per month
Industry-grade POS with best-in-class workforce and labor management tools
iPad POS system with excellent built-in automated inventory controls
Inventory and vendor management system that integrates with most popular POS systems
Cloud-based scheduling app with labor cost controls and multiple POS integrations
Self-installable security system with multiple options for cameras, sensors, and live monitoring
3. Plan for Growth Using Logs & Forecasts
So, you’ve figured all of your food and labor costs. You’ve done inventories. You have spreadsheets on spreadsheets. Now it’s time to apply all of those numbers to make proactive plans to meet the challenges ahead.
Well-run restaurants with an eye on profitability complete a daily shift log that is shared with the owners and management team. If there are multiple managers throughout the day—one manager in the morning and one at night, for example—each manager completes the portion of the log that corresponds with their shift. These reports become the building blocks for weekly, monthly, and annual manager meetings.
A daily shift log shared across managers and owners in the front and back of house should include:
- Forecasted sales for the day
- Actual sales for the day, split by food and beverage categories
- Comps and spillage dollar amounts
- Guest counts
- Check average
- Labor costs
- Notes on anything out of the ordinary; large parties, unseasonable weather, road closures, staff issues, anything that might have impacted sales
- Notes on inventory—any items where the stock is low, any items that are expected to be delivered the following day
Beyond the dry facts and figures, a daily report should also look for opportunities to celebrate milestones. Did the team exceed the sales goal for the day? Did the kitchen have excellent ticket times? Were several of the day’s customers responding to the ad you placed with a nearby theater?
Look also for opportunities to improve. Are customers confused by the menu description of a new dish? Is there a draft by the front door? Finish by including any information that will be relevant for the next shift. This could be anything from a reminder that two servers have swapped their shifts to the suggestion that the patio furniture be covered when the forecast calls for rain.
If your restaurant doesn’t already have a daily shift log, this template can help you start one:
Weekly and monthly manager meetings should survey the daily reports alongside profit and loss statements (P&L) to identify trends in the restaurant. A regular meeting of the management team, even if it is only two people, is the best time to make plans and set goals for the upcoming weeks and months ahead.
In these meetings, teams should review:
- Profit and loss statements: Many restaurants find it helpful to compare apples-to-apples by running their profit and loss reports on a 7-day week and a 28-day cycle to avoid inflated numbers for months that have more Fridays and Saturdays. An abbreviated weekly P&L review helps your team keep track of trends and make adjustments.
- Upcoming operational changes: Sometimes you need to rearrange the floor plan to accommodate additional tables for two on Valentine’s Day or close part of the restaurant for a private party. Ensure that all members of your management team are aware of these expected changes and know their roles in creating a smooth operation for the rest of the team.
- Marketing strategy: Are there upcoming seasonal events that are relevant to your brand? Do you have email, text, and social media campaigns to promote them? Are your previous marketing efforts paying off?
- Local partnerships and philanthropy: Partnering with local brands is a great way to foster a sense of community in your restaurant. So are things like sponsoring a local Little League team. Nonprofit fundraisers for Alex’s Lemonade Stand or No Kid Hungry are great places to collaborate with other restaurants in your market.
- Forecast future sales and cost targets: All manager meetings should look at the sales and business forecast for the upcoming week or month. Meetings should end with strategies to maintain targets and increase sales for the week ahead.
Forecasting is a tool utilized by all major restaurant and hospitality groups. Small restaurants might think that they lack the resources to create accurate forecasts, or that their operation is too small for forecasts to matter. Forecasting, however, is a key to planning ahead for major purchases and growing your operation.
In its simplest form, forecasting is looking at your past sales, guest count, and labor costs to find patterns that might apply in the future. You might notice that on the previous four Saturday nights, you sold 50 pork chop entrees. So, you’ll want to be sure to have enough meat delivered on Friday to maintain that momentum. Your previous scheduling reports might show that you have the most requests off on Sundays. If your restaurant is busy on Sundays, you will want to be sure that any new hires have availability to work Sundays.
Like many processes in restaurant management, there are more complex ways to forecast. The more complex the forecast, the more useful information it can give you. If the concept of forecasting seems daunting, you can start small. Look at your sales and labor from the previous week and use that information to inform choices in the week ahead. Once you feel comfortable with that data, try to use previous weeks’ invoices to predict future ordering needs. Then expand backward; start looking at the previous year’s patterns to forecast the weeks and months ahead.
The biggest gift that all this tracking and reviewing gives a restaurant manager is the ability to notice the operation around them. Noticing the operation will quickly lead to noticing patterns, and then feeling confident making split-second decisions in the heat of the moment. The best restaurant managers become so fluent in noticing patterns and directing operations that forecasting becomes second nature.
If you worry that your restaurant lacks the managerial bandwidth to stay on top of all this reporting, see our recommendations for time-saving restaurant POS systems and restaurant accounting software. These software tools track information in real time, providing deep analysis that makes forecasting a cinch.
4. Monitor Standards Daily
Speaking of noticing, it is important to notice changes in the physical items in the restaurant as well as the numbers on a page. High-performing restaurant managers begin each shift with a full walk-through of the restaurant. A restaurant space is constantly in use, so a comprehensive daily walk-through from the kitchen to the front door is the best way to catch small things like refrigerators struggling to stay cool or burnt out lightbulbs in the dining room before they become a customer service issue or lower your health department rating.
There are a few standards for a restaurant manager to keep in mind when walking through the restaurant:
- Local Health Code: The .gov website for your local department of health will have all the information about local codes. A good daily baseline is to check that all of your hand wash sinks have hot running water, soap, and hand towels, and that your refrigerators and freezers are cooling to the correct temperature.
- Local Fire Code: Your local Division of Fire Safety will have guidelines specific to your area. Generally, you want to be sure that your smoke alarms are unblocked and in working order, fire extinguishers are stocked in designated locations, and that all of your emergency exit routes are clear of debris and unblocked.
- Labor Code: Specific labor codes will vary by location. Some states require employers to compensate staff for “on-call” shifts, others designate a minimum 12 hours between the end of one shift and the beginning of another. Look at your staffing plan at the beginning of every shift. Scan for potential overtime, break penalties, or rest time violations. If you have any staff scheduled as “on-call” either bring them in or release them as soon as possible.
- Restaurant Standard Operating Procedures (SOPs): These are the standards that your ownership and management team set for your particular restaurant. These ensure that the dining room is set the way you specified, the server stations are stocked with the items you specified, and that the kitchen stations are stocked as specified.
Here is a downloadable checklist of some key things a restaurant manager should check every day. You can update with your local health codes and personal SOPs where necessary. Managers usually find that after several weeks of following a checklist like this, the checks become like a reflex.
Besides looking at refrigerator temperatures and fire exits, a daily walk-through is also a great opportunity to greet each of the team members you will be working with that day. It can be a great foundation for maintaining a positive team environment, which leads to the next step.
5. Build a Positive Staff Culture
In a recent survey by the National Restaurant Association, 78% of restaurant owners said they didn’t have enough staff to keep up with customer demand. Good restaurant management must include staff retention strategies, supporting the staff you have and giving them the tools they need to be successful. Those tools can be a comprehensive training program, health benefits, flexible scheduling software, or dining discounts and paid time off.
No restaurant operation is too small for a training program. If you’re not sure how to put one together, start by considering each role in the restaurant and writing out what a typical workday looks like for them. You could assign this task to a star hourly performer on your team, if your management team is strapped for time. From these notes, you can create a simple checklist to ensure that you—or one of your star staff members— walks new hires through every necessary task.
Most cloud-based POS systems allow you to give new staff a limited login to create practice orders and self-train on the system without saving actual data. If you rely on integrated apps for scheduling and employee management, they typically offer training videos that show your staff the granular details of posting their availability, requesting time off, and requesting adjustments to their time cards.
Training is not only a one-time job. A good training program is continuous. The most straightforward way to include training on a daily basis is to hold a staff meeting at the beginning of each shift. This should be an opportunity to get everyone on the same page with daily specials or 86’d items and refresh menu knowledge. A pre-shift meeting is also a great forum for public praise and recognition, as well as an opportunity to set team goals or brush up on best practices with the POS or scheduling software.
There are some simple ways to motivate staff and train continuously:
- Correct like a coach: When you see an opportunity for one of your staff members to improve, don’t get angry. It is best to assume that he or she simply doesn’t know how you want a particular task done. Approach your staff like a coach who is helping this staff member reach his or her full potential. Be sure to tell them the “why” behind your correction. As in, “We use one door for entering the kitchen and another for exiting it so people don’t crash into each other.”
- Offer perks: A simple employee discount of 20% to 30% is a common perk. Some restaurants have a weekly or monthly staff lottery that entitles the winner to a dinner for two in the restaurant. This lottery includes the entire team, from dishwashers to line cooks. A perk like this allows your team to experience the restaurant as a guest and see firsthand the impact their work has on a daily basis.
- Share successes with the entire staff: After a busy season, like a summer tourist season or the holidays, set aside a time to celebrate your wins with the entire staff. A slow Sunday or Monday night is a good choice. Close the restaurant for the evening, bring in some snacks, and show your team that you saw and appreciated their work through the busy times.
In a competitive labor market, building a positive work culture is necessary for a successful restaurant. That same National Restaurant Association study found that the majority of restaurant staff that give notice leave to work at another restaurant. Maintaining a positive work culture to retain employees is just good business; it can cost a business 33% of an employee’s salary to find a replacement.
In recent years staff retention has become a big part of restaurant management. If you are able to keep the staff you have, you will save time and money and create a more positive work environment. Several recent surveys of restaurant workers offer a clear view of what employees want from their restaurant jobs.
- Good wages: Check what other restaurants in your area pay and ensure that your restaurant is on par or a little higher. If your restaurant pays less than others, you’ll have trouble keeping staff.
- Empathetic scheduling: Try to post your schedules two weeks in advance. This gives hourly employees a chance to plan their lives.
- Recognition: Take the time to recognize your team’s efforts and celebrate good services and making it through busy times.
- Time off: After busy seasons or hectic services, schedule time off for your team so they can recharge.
Restaurant POS system Toast gives employees the opportunity to access their earned wages and tips before payday using the Toast Pay Card. This advance payment option can be a huge incentive for employees who need small sums between paychecks. Learn more about all Toast offers by reading our Toast POS review.
6. Focus on Customer Service
Your staff are not the only people that regularly require a restaurant manager’s attention. There are, of course, the customers to consider. During active service, most restaurant managers will find themselves walking a circuit from the front desk to the dining room, the bar, and then the kitchen as each station experiences a rush in service. Circulating in this way can be an excellent way for the manager to interact with all the guests and make themselves available to solve any problems that arise during the shift.
When the restaurant is busy, an effective restaurant manager:
- Is present in the dining room: Make it a priority to interact with every guest that is in the restaurant or “touch tables.” A good table touch is short and polite and opens the door for guests to speak up about their experience without being intrusive.
- Is available to the staff: Restaurant management requires a willingness to help where needed. If the kitchen is busy with orders, the restaurant manager may step in to expedite the food. If the bar is getting overwhelmed the manager might pour beer and wine orders so the bartenders are free to focus on cocktails.
- Addresses service errors personally: Research has shown that 17% of US customers will avoid your business after a single bad experience. After several negative experiences, that number jumps to 59%. As restaurant manager, fixing problems in the moment can stop a service mistake from becoming a full-blown bad experience.
- Knows when to comp and void items: To keep your costs in line and keep your inventory accurate, any food or beverage that is prepared should always be a “comp” in your POS. The only items that should be voided are items that were not made.
- Uses comps judiciously (and carefully): The profit margins on liquor are much higher than food products, so it makes sense from a cost perspective to send a complimentary round of cocktails to a group that has had a negative experience. In some states, however, it is illegal to give away alcohol. Be sure to check your local liquor laws before you comp alcohol.
After the dining room is empty, there are still ways to tie up loose ends with customer service. Mistakes and miscommunications will happen in every shift. It is important for a restaurant manager to take the time to learn from them and adjust the operation in response. The best way to do this is by taking the time at the end of every shift to “button up” the operation.
After the guests have left the restaurant, a restaurant manager should:
- Complete daily shift log: A detailed report at the moment will be most helpful for reviewing during the manager’s meetings. Consistent logging will help you see trends, which will allow you to better serve your customers’ and staff’s needs.
- Check social media accounts: The number of consumers who say they prefer social media messaging for customer service grew by 110% between 2020 and 2021. Take the time to check your restaurant social media channels, and respond thoughtfully.
- Coach staff: Check in with all staff members that were involved in negative customer experiences. Provide training and coaching to help them improve.
- Check sidework completion: Many restaurant managers perform the same walk-through at the end of their shift as they did at the beginning. A strong close helps ensure that your opening staff members the following day will be available to assist customers, rather than being tied up completing stocking and cleaning tasks that could have been done the night before.
Most every task in restaurant management can be tied to customer service. Keeping the space clean and safe and your staff trained and motivated and ensuring that all of your operational systems are in top working order and that you have enough inventory on hand to meet guest expectations are all part of creating an excellent guest experience.
Did you know? Restaurant statistics show that customer service is almost as important as food quality when it comes to customer priorities.
Restaurant Management Frequently Asked Questions (FAQs)
A restaurant manager hires, trains, and supervises service staff, manages food and labor costs, grows restaurant sales, and handles guest issues. Depending on the restaurant type, the manager may also be responsible for developing a beverage program or managing catering and special event sales.
Good restaurant managers are constantly learning. They stay abreast of industry trends in food, beverage, technology, and people management. Good restaurant managers know every aspect of the restaurant operation and can perform every job in the restaurant. The best restaurant managers step in to assist the business where needed, whether that is designing a marketing campaign, attending a meeting of a neighborhood business committee, or washing dishes in the restaurant.
Restaurant management is not complicated, but it can be very stressful. Restaurant managers must stay calm under immense pressure and tight deadlines while making dozens of daily decisions that have an enormous impact on the business. Before pursuing a restaurant management career, you should also consider the potential strain that regularly working nights, weekends, and holidays may put on your personal life. If your friends and loved ones work traditional Monday through Friday daytime hours, you’ll rarely see them.
If you can handle those stressors, restaurant management won’t feel difficult. There is a pattern to most services; business lulls and rushes tend to happen at similar times and the system of ordering, selling, and counting stock is straightforward, as is the process of hiring and training new employees.
After time, you’ll develop a strong network of other hospitality workers (and you’ll rarely pay full price at another restaurant when you dine out). You’ll also find it easy to intensely focus on the work in front of you and “get in the zone” during a service. I have always found those moments to be incredibly rewarding, which is why I managed restaurants for more than a decade.
A hospitality management degree is useful if you want to rise through the management ranks in a high-profile hotel or restaurant group. Institutions from community technical colleges up to the Culinary Institute of America and the Cornell School of Hospitality Management offer excellent programs. But management certifications are not necessary to manage a restaurant. You can learn how to manage a restaurant equally well by working your way up from an entry-level restaurant position like a server, bartender, host, or busser.
If you begin your restaurant management career with a management degree, it’s a good idea to spend at least a month actually working each position in the restaurant. You’ll see the challenges your staff faces in the course of a service, identify ways different roles can help one another, and earn a lot of respect in the process. I have always found that restaurant staff respect managers who have done the work themselves more readily than managers who have a degree but no real-world experience.
A successful restaurant operation is made up of many moving parts. Learning how to manage a restaurant starts with understanding your costs, monitoring every detail that affects them, and then creating processes and training staff to ensure a high level of customer experience. With a sound operation and trained staff in place, a restaurant can grow through savvy marketing strategies.
In micro-operations, things like sales, pricing, inventory, and staff activity can be managed manually. To really prepare for growth, a high-functioning POS system and integrated inventory are invaluable tools that give you insight into and control over an array of operating details like ingredient-level inventories, automated purchasing, seating management, staff performance, and comprehensive business reports.