Planning for the Future
What’s the best way to forecast? In this current economic climate, it can be a challenge for restaurant owners to adequately plan for the future while dealing with the day-to-day necessities. To learn about best financial planning practices, Modern Restaurant Management (MRM) magazine reached out to Ben Johnston, COO of Kapitus, which provides financing for small and medium sized businesses. With ever rising costs for supplies and staffing, how can a restaurant owner/operator best plan for the future? Restaurant owners should work to forecast their busy and slow seasons and use these projections to determine whether they are likely to need capital as they transition into their busy season. This can be especially true going into the holidays. Banks have been reducing exposure to small businesses ever since the pandemic, and now with higher interest rates putting pressure on bank deposits and greater regulatory scrutiny, banks are reducing their loan books even more. Fortunately, there are a number of small business lenders who have been expanding their ability to provide small business capital in the face of this bank contraction. Small business owners should consider exploring options with their bank as well as these non-bank lenders. What can restaurants do to provide value for guests who are being particular with where they spend their dollars? Restaurants trying to attract price conscious diners should make sure that their menus carry several low-cost, higher margin staples that can be sold at reasonable prices. Consider reducing the size and price of certain staples and then offering a “super-sized” portion for a higher price.
Why Forensic Accounting is Important for Restaurants
Employees perpetrate the most common fraud schemes at restaurants. Among business owners facing the highest fraud risk are restaurant owners, who are often susceptible to asset misappropriation schemes. This is where a forensic accounting expert can play an invaluable role. It involves the application of accounting and investigative skills to analyze financial data, transactions, and records related to a restaurant’s operations. The goal is to uncover financial irregularities and potential fraud. Employees perpetrate the most common fraud schemes at restaurants, including various cash and inventory misappropriation schemes. An employee can misappropriate cash and manipulate transactions to hide the theft. However, there are also various ways to protect against cash thefts. While some servers fail to ring in cash orders and pocket the money, others engage in price manipulation. For example, a bartender may sell expensive wine but enters a less costly wine into the restaurant’s point of sale (POS) system, pocketing the difference. Regular inventory counts can aid the discovery of missing expensive wine while having extra lower cost wine inventories. Another way employees conceal cash theft is recording unauthorized discounts or refunds and voiding sales. To combat this, proprietors should compare the voids created by each server with the average voids for a certain period. In addition, check the time stamps on voided transactions to determine if a void occurred at the moment of the transaction, during open hours, or during the closing time, and if a certain employee is voiding transactions more frequently.
Bielat Santore & Company – Restaurant Industry Alert
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Cultivating a Strong Food Safety Culture
In full-service restaurants. Every restaurant experiences its fair share of chaos. During busy shifts, some employees may take occasional “short-cuts”—such as skipping handwashing or not checking the internal temperature of the proteins they’re cooking—to “save time.” In their haste to prep food, they may use the same board to cut raw poultry and vegetables for a salad. Each of these “short-cuts” is incredibly dangerous for the restaurant and its guests. Improper protocols—like not properly washing hands, serving undercooked proteins, and/or cross-contaminating ready-to-eat foods with raw poultry juices—could result in a foodborne illness incident, sickening your guests and potentially ruining your restaurant’s reputation. Maintaining food safety is critical to ensuring customer health and satisfaction, as well as protecting the reputation and success of your restaurant. A weak food safety culture can have severely negative consequences, including contamination, product recalls, illness outbreaks, and legal ramifications. Building and maintaining a robust food safety culture is paramount to mitigate such risks. Roughly 48 million people get sick each year from foodborne illnesses. But when restaurants (and other food businesses) follow proper food safety protocols, they’ll experience a variety of important benefits, including increased customer satisfaction and loyalty, as well as improved employee engagement and retention. Additionally, creating a strong food safety culture allows restaurants to build credibility, protect their reputation, and avoid stressful, expensive, damaging fallout from any food safety breaches. Every restaurant should do the following to improve food safety compliance and mitigate risks:
How to Choose the Best Package for Your Food
Customers will see and experience the food package before they get to see, let alone taste, your food. In many cases, if the packaging doesn’t convey the value of your food, then the value of your food isn’t being conveyed—and you could be losing business. A good food-packaging fit ensures that you get a fair chance in the marketplace. So, to help businesses make informed packaging decisions, we at Inno-Pak put together this guide on how to choose the best package for your food. It includes the information you need to weigh the various tradeoffs that abound when picking packaging. Your brand should be your first consideration when you’re choosing your food packaging. Do you sell quality products at a good price? Then you probably want a straightforward, value-focused package. If instead, you deliver a unique and memorable experience, then you’re going to want a package that complements that experience. Similarly, if sustainability is important to your brand, you’re going to need to choose packaging that reflects those values and avoid packages that undermine them. When thinking about the durability of packaging, you need to consider the wear and tear of transportation. Try putting your largest or heaviest meal in a package and drive it home. Did it arrive damaged? Did items get mixed together or swap flavors? Your employees, too, need to be able to quickly use the food packaging in your business to keep up with orders when every second counts. See if your employees can try out any new packages you’re evaluating. Do they decrease the time spent or keep it the same? Are they less likely to spill or cause other issues?
3 Reasons the Restaurant Labor Shortage Hasn’t Gone Away
The staffing pool is still 64,000 jobs short of where it used to be. More than three years after COVID-19 erupted around the globe, fortunately the disease is receding. But the upheaval the pandemic caused persists. More than half of Americans in a recent Gallup Poll said their lives are not yet back to “normal.” You can count many restaurant operators among them. Despite the gradual recovery from the pandemic, the restaurant and quick-service restaurant industry continues to struggle with a diminished workforce, significantly hindering the ability of operators to grow and expand their businesses. As of July, restaurants were 64,000 jobs, or 0.5 percent, below their February 2020 employment peak, according to the National Restaurant Association. On average between April and July, the industry added fewer than 11,000 jobs each month. That was down from an average monthly gain of 53,000 jobs during the first quarter of the year. So, what is behind the industry’s persistent labor shortage? A chief contributor to the labor shortage is America’s aging population. For the first time in modern U.S. history, the workforce is shrinking—there are more people leaving the labor pool than there are workers entering it—marked in large part by baby boomer retirements. The pandemic accelerated this long-term trend. And the outlook isn’t exactly promising. Svenja Gudell, chief economist at Indeed, emphasizes that countries like the United States will continue to face worker shortages due to aging populations and other demographic shifts. Gudell says that without sustained immigration or efforts to attract workers from the sidelines of the labor force, the industry will struggle to meet long-term demand.
Here’s How Fee Fatigue is Affecting the Restaurant Technology Industry
Restaurant tech companies struggle to become profitable. When Toast implemented a 99-cent consumer-facing fee on all orders in June, the backlash was strong and immediate—so much so that Toast decided to walk back the “order processing fee” less than a month later. During Tuesday’s second quarter earnings call, Toast CEO Chris Comparato called the move a “mistake” that they won’t make again and will instead listen to their customers and investors before making similar moves in the future. The criticism against Toast is just one part of the fee fatigue that has permeated not only the restaurant industry — from backlash against delivery order fees to criticism of health insurance surcharges — but has reached a fever pitch in other industries including events, movies, and airline ticketing. “I think restaurants are tired of it all,” Jeremy Julian, COO of Custom Business Solutions and founder of Restaurant Technology Guys said. “They’re trying to figure out how to make money, which is hard enough in the restaurant industry, especially when you have all of these fees. Plus, if a guest doesn’t fulfill their order and cancels the order, the fee is still due, and you have to pay taxes on it.” However, even if President Biden’s proposed Junk Fee Protection Act passed, would legislation really change anything in the restaurant tech industry? After all, it’s likely, experts have suggested, that tech companies that remove unpopular consumer-facing fees will have to make it up some other way, including not just Toast but also Clover, which initially implemented a similar $1.50 consumer-facing fee, but told Nation’s Restaurant News that the fee has been waived since April 2020, and there are no current plans to reintroduce it.
America’s Fight Over Tipping at Restaurants
Comes to its biggest battleground yet. A national battle over tipping has come to one of America’s culinary capitals. Servers, restaurant owners and lawmakers in Chicago are debating whether waitstaff and other restaurant workers should be able to earn the city’s minimum wage of $15.80 for larger businesses. Right now, their wage isn’t that cut and dried. Under the so-called tipped wage system, in Illinois and other states, employers can pay below minimum wage to workers who also earn tips. In Chicago, large businesses pay servers, bussers, bartenders and other tipped employees a minimum of $9.48 an hour—with tips making up the difference. If their tips don’t push their hourly pay over the $15.80 minimum, law requires their employer to make up the difference. Activists are pushing to eliminate the decades-old system in Chicago, and elsewhere. They say that it relies on diners’ goodwill to subsidize workers’ wages—and that sit-down restaurant staff should be able to earn the same minimum pay as other workers. Some restaurant owners say a change to the current system would upend their businesses as they are recovering from inflation and pandemic-related sales losses. They say it will force them to hike menu prices for diners, and potentially reduce staff to offset the higher wages.
Ordering Free Bread at Restaurants is Costing You More
Here’s why. That free bread at dinner might make you fork out some extra dough. That’s right — the deliciously zero-cost carb-load before your entree could be costing you more than you bargained for, at least according to one TikToker. Denise, who goes by @sweetfiber online, revealed the real reason restaurants load up customers on homemade bread — or chips and dip, depending on cuisine — prior to a meal. “It’s not because they want you to fill up on the ‘free stuff,’ and they’re not being generous,” she said in a clip. “This is actually a way for them to make more money.” Munching on bread while eyeing the menu, Denise claimed, will make you hungrier and crave more due to a blood glucose spike that happens while consuming the bread. “So, while it feels like they’re being generous, they are actually winning,” she said of the restaurants’ scheme. “You order more food, they bring you some more bread and then offer you a dessert that’s nearly impossible to resist.” Thus, diners blow more cash, claimed Denise, who uses her online platform to share her lifestyle changes after learning she was pre-diabetic. But some of her 1.3 million viewers didn’t necessarily agree with her theory, claiming they’re too full after a bread basket and appetizers to eat any more.
Did You Know?
These are the restaurant chains that closed the most locations in 2022. Papa Murphy’s, Baskin-Robbins and Burger King are among the chains that closed the most net restaurants last year. But one big chain stands out. Generally, restaurant chains on the Technomic Top 500 Chain Restaurant Report added restaurants last year. The typical chain grew by eight locations, and about two-thirds finished the year with more restaurants than they’ve closed. But plenty of restaurants shrunk last year. Here’s a look at the chains that closed the most units in 2022.
Employee Tip
The value of teaching rather than training? Even if we’re not masters in every facet of our business, we’re masters of learning. But along with being students, we’re teachers. There are many things we must teach in our business, from the simple tasks of mopping the floor to the stuff we take for granted, such as stretching dough. All the way to more complicated matters, like how to read a profit-and-loss statement, these are things we want to teach and not train. Systems and how-to manuals are there to train our employees how to navigate certain operations in the pizzeria. Teaching is an art, where we inspire our employees to care and to perfect the task they are assigned.