Many new and small restaurants face the challenge of boosting profits in a highly competitive industry. To succeed, these establishments must focus on how to improve restaurant operations, from streamlining kitchen efficiency to enhancing customer service.
This means implementing the right strategies to stay ahead of trends and adapt to changing consumer preferences.
Yes, you must keep innovating to capture more customers. But before diving into trends and the world of high-tech, focus on the basics first. Start with improving your core operations to build a strong foundation needed for long-term success.
This article will guide you on where to focus your efforts and energy to achieve effective restaurant operations.
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?
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.
A good example is the use of a point-of-sale (POS) 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.
Another area of automation is the kitchen operations. Equipment like automated dishwashers and food processors can reduce labor costs and increase productivity.
Meanwhile, using a kitchen display system (KDS) can streamline order flow, reduce wait times and improve order accuracy.
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.
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.
Only then can you implement solutions that preserve the restaurant’s core values and don’t sacrifice your service quality.
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
- Online ordering and reservation platforms
Through these tools, your restaurant can gain valuable insights into your customer demographics, spending habits and order preferences.
For example, by assessing your sales data, you can identify peak hours, popular menu items and customer spending patterns. Use this valuable information to optimize your staffing levels, refine your menu and develop targeted marketing campaigns.
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.
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.
How can restaurants stay profitable with increasing labor cost?
Emily: “This is a layered question with many possible answers, but I will try to give some general recommendations.
A lot of establishments forget about their P&L statement. That is one of the first things I look at when it comes to establishments that are struggling with profitability. I tell them to focus on prime cost, things that are in their control. What is the top line revenue? How often do you measure performance and what do you consider success?
Another important part when it comes to profitability is being transparent about the P&L with your managers. If you keep the books away from them even with knowledge and experience, they won’t be able to help and run the business smoothly.
If you are struggling with any aspects in your establishment, the friendliest advice I can give is hire a professional to help put.”
Emily LaRuffa, Restaurant Consultant and owner of Oracle Hospitality
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.
