Many of the principles for how to manage a restaurant effectively are drawn from general business management practices: establishing your ideal brand and developing an organizational culture that embodies your core values is essential to the longevity of any business. However, beyond basic restaurant management, the restaurant business is fast-paced and unpredictable with industry-specific best practices.
In a role with many moving parts, public relations, customer service, and staff management take a big share of a restaurant manager’s time. If you’ve taken the leap, here’s what you need to know about how to manage a restaurant business successfully.
- Effectively Manage Finances
Finances form an especially critical part of how to manage a food business because there is not much room for error. The restaurant business has a comparatively low-profit margin to other industries thanks to high overhead costs, fluctuating food prices, and sometimes even changes in the economy.
Effective restaurant management should involve constantly monitoring cash flow, having a budget and adhering strictly to it, and keeping money aside for unforeseen circumstances. With so many contributing factors like labor cost, payroll cost, and food cost, having a close eye on your finances is imperative if you want your business to survive the tides.
In addition to ensuring efficiency, a good manager should constantly explore ways to expand sales and cut costs. Even the smallest of cost-cutting efforts can make a difference to the bottom line. For example, negotiating a slight discount with suppliers may shave off just a bit in day-to-day expenses, but in the long run, the savings will add up.
- Work on the Business
It’s easy to forget about this key step when you have just opened up your doors and everything is brand new, but working on improvement is something that should start the minute you open. A business is never a finished product, rather, it's an ongoing one.
A good restaurant management plan will factor in ways to keep the business up to date, nimble, and future-proof. Contrary to working in the restaurant, working on the business means constantly improving efficiency in both operations and finances. Scheduling regular staff meetings where feedback is given and cracks in the system are identified before they become a serious issue is a good use of time to help improve the way the business runs. Ongoing training of all your staff members is another vital component.
You should also take time to stay abreast of dining trends, economic trends, and overall business practices. For example, the emergence of COVID-19 amplified the already growing demand for a seamless online ordering experience. Adapting to trends quickly can mean the difference between staying afloat and going under.
- Work on Yourself
Restaurant department management is not easy. Constant self-improvement makes a big difference in the business itself. A good manager is consistent, accountable, and displays a positive attitude. These traits are highly motivating to your colleagues in the business, on top of setting a precedent.
To fully understand the cogs of the operation, a good manager learns and leads by doing the work themselves. If you want your servers in the dining room to be quick, show them how it’s done. They are more likely to take initiative if they see you do it first.
Staying on top of everything demands great multitasking skills, so one should be deliberate about developing their soft skills, such as communication and problem-solving.
With all you have to do, you should not overlook your health. Ensuring you get enough sleep and exercising regularly are great for both improving your physical stamina and releasing all the tension that comes with the high-stress role of being part of the management team of a restaurant.
- Manage Your Taskforce
Managing employees in a restaurant can be a challenging task. With such a wide range of roles and individuals in one space, keeping everyone motivated and focused is one of the main roles any manager will undertake. Luckily there are proven methods of doing it.
One of the most important is setting clear expectations. This ensures your staff does not get overwhelmed and that every task is accounted for. While you're at it, make sure to set high standards that you hold your employees to and goals for them to strive for.
Delegating roles also helps to validate staff while making sure you don’t get overwhelmed yourself. Giving people responsibility and trusting them can do wonders for their motivation. Encouraging your workers to take up more responsibility and rewarding them for it is a great morale-booster. On the other hand, a restaurant is no place for slacking off or dishonesty. You must be firm when necessary and promote a culture of transparency.
- Provide Customer Service
While it’s tempting to prioritize business profits over customer experience in a restaurant, customer service and satisfaction should be the end goal for every restaurant owner. Unfortunately, most people don’t know how to manage a restaurant without sacrificing one or the other. Businesses often make the mistake of diminishing the customer’s experience in an effort to cut costs, or offer too many “extras” to please them. Both these approaches hurt the business in the long run.
Collecting customer feedback should be a part of the business culture and is a great way to achieve balance—it doesn’t get more accurate than hearing it from the horse’s mouth. Not only will you be able to improve your customer service based on real information, but you will also find out what your customer really cares about. It might not be that fancy take-away packaging you spend so much on.
- Manage Your Menu
A restaurant’s menu is the make or break of the business in many ways. It’s what draws in your customers and communicates a key part of your brand, and it is also what determines the profits you make. Because of this, menu pricing and content is something that the management team needs to stay on top of.
No matter the type of restaurant or cuisine, a good menu should have something for each of your customers. It should also be at a price point that appeals to your target market. Constantly reviewing your menu to add or take away items can keep your customers happy, but just be careful not to make drastic changes or take out popular items. Managing the menu should be focused more on optimizing and less on changing. Integrated inventory management within your point of sale can help you make educated decisions about which items should stay based on how they sell, and which should go.
- Plan Ahead
Determining the kinds of supplies your restaurant needs involves planning inventory and supplies. Running a restaurant will require the manager to know about inventory and make sure the kitchen and other areas are fully stocked.
After purchasing initial inventory, the manager needs to come up with an inventory management system that keeps track of menu items, delivery schedules, and more. Not only does this streamline the process, but it also minimizes waste and reduces the risk of theft.
A good plan will also include back-up strategies for the unexpected. This includes actions such as having back up suppliers and a little extra inventory for busy days.
Finding ways to be more efficient and save costs is important for the success of a business. Whether with small things like adopting a new online delivery service, or larger projects like revamping your systems, innovations can make a big difference in the way a business performs.
One important tool that every restaurant management should employ is point of sale technology. The latest restaurant POS systems can save a lot of time and money, as they automate otherwise labor-intensive processes such as processing transactions, managing staff members, providing analytics, and tracking inventory.
In addition to a POS system, other software and hardware innovations that a restaurant can take advantage of are reservation tools, payment devices, and more.
- Be Visible
In addition to word of mouth from your happy customers, it’s important to look for opportunities to gain exposure. A good marketing and advertising strategy can keep you relevant and gain the attention of potential customers. There are many ways to market your business, from social media and online marketing to loyalty programs and vouchers for existing customers.
Managing a restaurant will entail allocating money for these efforts and deciding on the best approaches to take according to their budget. One advantage of today’s digital world is that it’s not as expensive to market your brand as it was with traditional media. Capitalizing on these cheaper platforms and making sure you get good scores on all the review sites can give a good boost to your customer numbers.
- Be Proactive
When all is said and done, the best management is one that aims to stay ahead instead of being reactive. As you learn how to manage a restaurant, you should aim to be proactive and prepare for the future, not for current eventualities. This will allow you the space of mind to be creative and innovative.
From staffing needs to updating technology, failing to be proactive will lead to being overwhelmed and struggling to catch up.
Running a restaurant involves many different responsibilities—whether it’s about how to manage a small restaurant or a big one. From leading staff to tracking sales and accounting duties, a restaurant manager must make sure operations run smoothly.
This article was written by our friends at Revel Systems.