Is your restaurant running smoothly, or does it feel like you’re constantly putting out fires? From rising costs to retaining staff, the secret to success is nailing your operations. Discover how top industry pros transform chaos into profit - and how you can too!
Why Is Improving Restaurant Operations Important?
The answer is simple: for operational efficiency, which means running your restaurant business smoothly and smartly. It's about getting the most out of your resources — people, time and money — while giving customers great food and service.
When a restaurant runs like a well-oiled machine, tasks are completed quickly, accurately and with minimal waste or unnecessary costs. This translates to shorter wait times for customers, working with a happier staff and seeing your revenue increase.
What Are the Challenges in Running a Successful Restaurant Operations?
Running a successful restaurant operation is filled with challenges. There are many obstacles to overcome just to keep it operating and making it profitable, including:
- Finding and retaining qualified staff amid labor shortages and high employee turnover
- Balancing profitability with customer expectations amid rising food and labor costs
- Controlling food waste, maintaining optimal stock levels and dealing with supply chain disruptions
- Adapting to changing economic conditions and consumer spending habits
- Standing out in a crowded market and constantly attracting new customers
- Implementing and utilizing technology effectively without disrupting operations
- Properly complying with health and food safety standards while maintaining efficiency
How Can You Improve Your Restaurant Operations?
A good example is the use of a restaurant point-of-sale system, which automates order taking, payment processing and inventory management. Instead of manually calculating bills and managing stock, your staff can focus on customer service and other critical tasks.
Achieving both efficiency and profitability is the key to the longevity of your restaurant business.
Below are our tips on how to improve restaurant operations, along with practical strategies and examples, to help you optimize your restaurant's performance.
Create Strict SOPs
Strict standard operating procedures (SOPs) in a restaurant are detailed guidelines that outline the exact steps for every task — from food preparation to customer service.
These guidelines are there to ensure consistency and efficiency within the operation and serve as a blueprint for employees to minimize errors and misunderstandings.
For example, an SOP for food handling might specify exact temperatures for refrigeration and cooking times for different ingredients. It would also include proper cleaning procedures for the kitchen equipment used to ensure food safety and prevent contamination.
Another example is an SOP for customer service, which outlines in detail how the staff should greet customers, handle complaints and process their payments.
Implementing strict SOPs is the first step to improving restaurant operations and providing a solid foundation for training the employees.
Streamline and Automate Processes
“Streamlining and automating” may sound technical, but it only means simplifying the tasks, reducing manual labor for repetitive tasks and using technology for smoother restaurant operations.
Your team will benefit from these initiatives through timesaving and minimized errors.
Implementing technology such as Point of Sale (POS) systems, kitchen display systems (KDS), and inventory management software can also significantly enhance efficiency.
For example, a POS system can expedite order processing and provide real-time sales data, while an inventory management system helps track stock levels and reduce waste. Automating staff scheduling through specialized software ensures optimal coverage during peak hours and reduces labor costs.
Implement Technology
In today's digital age, leveraging technology is crucial for optimizing restaurant operations. Implementing modern tools can significantly boost efficiency and enhance the customer experience. In addition to the POS system, consider using:
- Online Reservation Platforms: Facilitate seamless table bookings, reduce wait times, and improve customer satisfaction by utilizing online reservation systems.
- Employee Scheduling Software: Optimize staff scheduling, track labor costs, and ensure adequate coverage during peak hours with specialized software solutions.
- Customer Relationship Management (CRM) Tools: Manage customer data, track preferences, and tailor marketing efforts to enhance guest loyalty and repeat business.
Improve Your Menu
Optimize your menu by selecting or creating dishes that not only appeal to customers but also maximize your restaurant's profitability. Work with your Chef to have a balance of popular items and high-margin dishes, therefore providing more options.
For instance, a popular burger might be a crowd-pleaser, but it gives you lower profit margins due to the costs of ingredients.
So, why not consider offering a gourmet burger with higher-priced toppings as an alternative? This way, you're increasing its average order value minus raising the costs to prepare it.
Finding that balance in your menu is more important than ever. In fact, the National Restaurant Association (NRA) reported that soaring costs are limiting restaurant operations.
[Source: National Restaurant Association]
In a survey conducted by the NRA, 85% of restaurant operators say they’re less profitable now than in 2019, as 95% of their sales go to food, labor and operating costs. However, they’re also careful about increasing prices that may turn off many customers, and this hesitation results in some profit losses.
Analyzing sales data will help address this challenge.
Identify your best-selling items and consider highlighting them to encourage more orders. Meanwhile, low-selling and low-profit items might need to be removed or revamped.
Strengthen Employee Relations
Make your restaurant a great place to work by fostering a supportive and positive work environment where employees feel valued, respected and engaged. Restaurant Managers or the Director of Operations can create a shared sense of purpose by building trust and communicating with their staff. These employees, in turn, will do their best to ensure your operational efficiency.
Effective employee relations encompass various aspects such as:
- Providing fair compensation and benefits
- Setting clear expectations and performance feedback
- Providing opportunities for advancement
- Focusing on work-life balance
As your staff works hard every day to ensure smooth restaurant operations, for your part, make sure to prioritize their well-being and professional growth.
Implement significant staff-focused changes and see how your turnover rate improves.
Enhance Employee Training
- Regular Training Programs: Conduct ongoing training sessions to keep staff updated on industry trends, menu changes, and service standards.
- Career Advancement Opportunities: Provide clear pathways for promotion to motivate employees and reduce turnover rates.
- Employee Recognition: Implement reward systems to acknowledge outstanding performance, fostering a positive work environment.
Reduce Operational Costs
Implementing cost-effective measures without compromising quality is a delicate balance that requires careful planning and execution. One effective example is to optimize your supply chain. You can consolidate orders with fewer (but reliable) suppliers so you can negotiate better prices and reduce delivery costs. This initiative can lead to significant savings without sacrificing your menu's quality.
Another crucial area you can focus on is inventory management. Implementing an efficient inventory system will prevent overstocking and reduce food waste, which both come with associated costs. Running a cost-efficient restaurant operation requires a deep understanding of the business so you can identify areas of inefficiency that unnecessarily increase your costs.
Use Data Analytics To Gain Customer Insights
We're lucky to live in a time where we can harness customer data to understand their buying behavior and preferences. This is also true in the restaurant industry.
There are several tools you can use to collect customer data, the most popular of them include:
- Point-of-sale (POS) system
- Customer relationship management (CRM) software
- Online ordering and reservation platforms
- Sales data to identify best-selling items and underperforming dishes
- Reviews and feedback forms to pinpoint areas needing improvement
- Inventory patterns to prevent overstocking or stockouts
Through these tools, your restaurant can gain valuable insights into your customer demographics, spending habits and order preferences.
Analyzing data from loyalty programs, online reservations, and customer feedback forms can reveal patterns in dining habits and preferences. For instance, if data indicates a high demand for vegetarian options, consider expanding your plant-based menu offerings. Utilizing Customer Relationship Management (CRM) tools can help segment your customer base and tailor marketing efforts to specific groups, thereby enhancing customer satisfaction and loyalty.
Strengthen Marketing and Promotions
In today's digital age, a robust online presence is crucial for attracting and retaining customers. Ensure your restaurant's website is user-friendly, mobile-optimized, and provides essential information such as menus, operating hours, and contact details.
Also, engage with customers on social media platforms by sharing updates, promotions, and behind-the-scenes content. Utilize email marketing campaigns to inform patrons about special events and offers. Encourage satisfied customers to leave positive reviews on platforms like Yelp and Google to enhance your restaurant's reputation.
In addition:
- Social Media Engagement: Post regularly on platforms like Instagram, TikTok, and Facebook, showcasing new dishes, promotions, and behind-the-scenes content to build a loyal online following.
- Collaborations and Events: Partner with local influencers, host live music nights, or collaborate with nearby businesses to attract diverse crowds and increase visibility.
- Loyalty Programs: Launch a points-based or membership rewards program to incentivize repeat visits and customer loyalty.
- Seasonal Promotions: Capitalize on holidays and local events by offering limited-time menus or discounts to drive traffic during peak seasons.
Follow Health and Safety Standards
A single case of food poisoning can destroy your restaurant’s reputation. This emphasizes the importance of following health and safety standards.
Complying with regulations is crucial in effective restaurant operations to maintain a clean and safe environment.
If you haven't taken this seriously yet, now's the time to implement thorough cleaning and sanitation procedures throughout the restaurant — from the kitchen to dining areas. This includes regular disinfection of surfaces, equipment and utensils to prevent the spread of germs.
You should also enforce proper food safety training for all employees to make sure they understand the importance of personal hygiene and food handling practices.
Don't put your staff and customers at risk; prioritize health and safety compliance starting now.
Develop Sustainability Practices
Adopting sustainable practices not only benefits the environment but also appeals to the growing number of eco-conscious consumers.
- Reducing Food Waste: Implement portion control, repurpose surplus ingredients, and donate excess food to minimize waste.
- Energy-Efficient Equipment: Invest in energy-saving appliances to reduce utility costs and lower your restaurant's carbon footprint.
- Eco-Friendly Packaging: Utilize biodegradable or reusable packaging materials to decrease plastic waste and enhance your establishment's green image.
- Sourcing Locally: Partner with local farmers and suppliers to obtain fresh, sustainable ingredients, supporting the community and reducing transportation emissions.
Conduct Regular SWOT Analyses
Performing regular SWOT (Strengths, Weaknesses, Opportunities, Threats) analyses helps identify internal and external factors affecting your restaurant's performance. This tool enables you to leverage strengths, address weaknesses, capitalize on opportunities and mitigate threats. For example, recognizing a strength in customer loyalty can lead to implementing a referral program, while identifying a weakness in staff training can enhanced training protocols.
Advice From a Restaurant Consultant
OysterLink recently sat down and talked with Emily LaRuffa, a Restaurant Consultant who owns and operates Oracle Hospitality, a consultancy agency, but started out by working as a Bartender in hospitality.
We asked her how restaurants can stay profitable given the increasing labor cost and the ever-shrinking margins. Here are the tips she gave us.
5 Steps To Identify What You Need To Improve in Your Restaurant Operations
Follow these tips so you can gain valuable insights into your restaurant's strengths and weaknesses that will lead to much-improved restaurant operations.
1. Conduct a Comprehensive Assessment
A thorough assessment of your restaurant's operations will identify areas for improvement. Evaluate all aspects of your business, from front-of-house service to back-of-house operations.
Analyze your current systems, procedures and staffing levels to identify any inefficiencies that need fixing.
2. Identify Bottlenecks in the Processes
Bottlenecks are points in your operations that slow down the process or create delays. These could be in the kitchen, at the point of sale or in customer service.
Removing these bottlenecks will streamline your restaurant operations and improve its overall efficiency.
3. Seek Customer Feedback
Your customers are your most valuable source of information.
Gather feedback through surveys, online reviews and direct customer interactions. Knowing their perceptions of your restaurant's service, food quality, and atmosphere will help you identify areas for improvement.
4. Assess Your Financial Performance
Identify areas where you can reduce costs or increase revenue. Track key performance indicators (KPIs) such as sales, labor costs and food costs to identify trends and areas for improvement.
5. Get Your Employees’ Feedback
Your employees have a unique perspective on your restaurant's operations. Conducting employee surveys or holding open forums will help you gather their input on any challenges and suggestions for improvement.
Empower your employees to share their ideas to find innovative solutions and increase their job satisfaction.
Conclusion
The road to improving restaurant operations is paved with challenges, but it’s not impossible to achieve. Some processes will be easy, while some a bit more difficult to do.
However, with strategic planning and your relentless pursuit of excellence, you can make significant improvements to truly achieve successful restaurant operations — one that will satisfy customers and bring profitability to the business.
Written by Lidija Misic
Content Specialist
Lidija holds a BA in English Language and has lived in five different countries, where she has worked in various roles, including as a flight attendant, teacher, writer and recruiter. Her biggest passion is crafting great content and reading. She is particularly passionate about creating punchy copy that inspires people to make positive changes in their lives.
Reviewed by Stefan Petrov
With over 10 years of experience as a writer and editor, Stefan has worked in the automotive, IT, health and hospitality industries. Familiar with Google Search Console and other SEO tools like Ahrefs and Semrush, Stefan uses his experience to create content that's visually appealing to the user but also ranks in the SERPs.
