Restaurant Management: 10 Tips for Success
Are you a restaurant owner attempting to operate in the post-pandemic world? The restaurant industry was one of the hardest hit by the most recent global crisis, leaving many restaurant owners scrambling to adjust. Some have closed their doors due to poor sales and lack of staff. Modern restaurant management involves managing these challenges while also connecting with customers and encouraging team members to do their best.
This role is not easy, yet that does not mean successful restaurant management is impossible. With the right plan, you can operate a restaurant that will generate income and a loyal following. The tips in this guide will help you do just that.
Common Restaurant Management Challenges
The pandemic changed the face of business, and many restaurants struggled to stay afloat: some sank completely. In general, restaurants were not set up for the delivery-based model that became necessary when COVID restrictions went into place, so they had to quickly rise to the challenge.
As the world comes out of the most challenging months of the pandemic, restaurant owners must look at the aftermath. Several challenges have arisen as a result of the pandemic that restaurateurs must learn to overcome.
Inflation
Inflation is a post-pandemic problem affecting every industry, but food costs are one of many that are growing at an alarming rate. The disruptions to the supply chain have deeply affected the restaurant industry: Some business owners even find it almost impossible to make their signature dishes due to a lack of ingredients.
In a recent survey, 72% of restaurateurs say they will have to close their operations if inflation doesn't level out. Simply put, they can't raise their pricing fast enough to keep up with the rising cost of ingredients.
The NPD Group finds that food costs have risen by at least 9% based on pre-pandemic levels, while restaurant traffic is down by 11% — so demand is not mirroring cost increases. Yet adjusting for these increases can create more challenges. For instance, increasing the price of menu items may drive more people away, creating a new problem. Operational costs have also increased due to inflation and supply chain issues.
Labor Shortage
One of the biggest challenges those in the restaurant business are facing in the current market is the restaurant labor shortage. The National Restaurant Association finds that while job growth in the restaurant industry is happening, it's slow going: Restaurants are still 6.4% below their pre-pandemic employment levels.
Job openings in the most recent report exceeded monthly hires by 500,000, indicating there are still not enough interested applicants to fill the necessary roles. Staffing shortages are challenges restaurant owners struggle to overcome as they strive to deliver excellent service to their customers.
Yet restaurant owners must manage labor costs despite inflation. Being short-staffed can often mean that employees who do come in end up working extra hours to compensate. However, approving (and paying out) overtime shifts can lead to higher labor costs overall.
Keeping labor costs within the recommended percentages is vital. Increasing your pay rates to attract more employees may not work when you're also trying to balance the rising inflation rate. Restaurant kiosks may help with this problem, as they can allow customers to order and check out independently. By limiting the number of point of sale employees a restaurant needs on staff, kiosks allow your restaurant to operate with fewer people on the payroll.
Demand for Reliable Delivery
The pandemic changed the way customers ate restaurant food. Instead of dining in, they got into the habit of having food delivered to their homes. While most restaurants are now open for the full customer experience, many customers are still enjoying the ability to have food delivered at home — and this creates significant demand for reliable delivery options.
Today’s restaurants must find a way to continue to meet this demand while also serving the customers who come inside. Streamlining is essential to this goal. The right kiosk, such as INFI's, that integrates with a delivery app and your kitchen display screen or ticket printer can help manage orders so that you can deliver them to customers’ homes reliably and efficiently.
Need To Reach New Customers
Finally, today’s restaurants must find a way to reach new customers and tell them about their food, especially restaurants that are just starting out in the post-pandemic world. Foot traffic is no longer sufficient: You must have an online presence to reach your targeted customers and improve your overall profit margins. This requires a well-rounded business strategy that markets to both offline and online audiences.
More and more customers are using online methods to research dining establishments before going out to eat. If you want customers to find you, you must have a presence on search engines and popular social media channels. Once you have this presence, you can use it to grow your word-of-mouth business as well. Encourage happy customers to post about your restaurant, tag you, and watch as they replicate themselves!
Top Restaurant Trends Impacting Management
Understanding current trends is one key to knowing what it takes to manage a restaurant effectively. Square and Restaurant Dive are just a couple of organizations that have been taking a closer look at some potential changes ahead for the food service industry. In their studies, they explore some of what’s in store for restaurant management in the coming months. We've compiled some of the most significant trends discussed that restaurant owners can expect in 2022 and beyond.
Contactless Ordering: Front-of-house ordering systems and restaurant POS systems are increasingly contactless, and this trend appears to be here to stay. Customers like the control they have over their order when they place it on their own, without the help of someone behind the counter.
This trend is true for both fast-casual and full-service restaurants. For full-service restaurants, Square finds that 52% of businesses were offering pay-at-the-table devices. In the fast-casual space, 60% indicated a need for online ordering systems or self-ordering kiosks.
Diverse Revenue Streams: One of the ways restaurants in 2022 plan to combat inflation and other economic challenges is with diverse revenue streams. Selling products like bottles of the restaurant's signature sauces or meal kits that customers can take home (in addition to regular menu items) are expected to be part of the modern restaurant's marketing strategy — and customers seem to like this shift.
Kitchen Automation: Labor shortages are forcing restaurants to automate and streamline the back-of-house processes to make day-to-day operations run more efficiently. In Square's survey, 36% of managers and owners indicated they were improving their business technology to streamline kitchen operations. Everything from ordering systems to dishwashers utilizes some technology to help operations run more efficiently.
In-House Online Ordering and Delivery: Food service establishments are seeing more people getting food delivered or picking it up to eat at home rather than dining in the dining room — and online ordering is key to that. Restaurants are investing in their own apps and self-ordering kiosks, which prevents the need to rely on third parties and improves the overall guest experience — even for guests who dine at home. Some are even hiring and training their own delivery drivers to maintain control over this part of the ordering process.
Increased Customer Engagement Programs: Loyal customers are a restaurant’s best customers because management can count on them to come time and time again. Loyalty programs, apps, subscriptions, and memberships will all be big in 2022 and beyond as restaurants seek ways to improve customer engagement. A whopping 90% of Square's survey’s respondents indicate initiatives for engagement are in the works for 2022.
Increasing Costs: Food costs on the way up mean restaurants are increasing prices. Thankfully, successful restaurant owners are finding that their customers understand. In Square's survey, 77% of restaurant customers say they understand why restaurants need to raise prices in light of the pandemic.
Labor-Saving Technology: With the increased costs and reduced labor numbers, restaurant operators are searching for ways to be less reliant on employees without hurting their overall customer experience.
Simplified Menus: Another trend is the simplification of menus. This started during COVID, as restaurants could only offer menu items that stood up to the delivery process. (For example, a souffle probably won’t hold up through being packed up and transported across town over potholes and speed bumps — but a burger will.)
But now, they face supply chain problems and labor shortages that make smaller menus more appealing. Technomic reports that by the end of 2021Q3, restaurant menu items had reduced by 10% from their pre-pandemic levels — and that trend is continuing.
10 Effective Restaurant Management Tips
Managing a successful restaurant takes time and attention — it doesn't happen by accident. Managers must be able to focus on the big picture of managing their restaurant and employees, even while dealing with the day-to-day concerns and challenges that arise.
To help you navigate these daily challenges, here are 10 of our best restaurant management tips to consider.
1) Budget Effectively
Restaurant finances must be carefully controlled when economic challenges arise, which means careful budgeting and inventory management. Restaurants simply cannot afford to waste inventory or money. Managers will need to crunch the numbers and ensure they operate efficiently to stretch every dollar in the current market.
Point-of-sale systems can help track inventory and sales. This tracking makes budgeting and planning easier while also providing managers with key metrics they can use to make future decisions about menu items and promotions.
2) Choose Effective Technology
Technology is going to be a critical factor in successful restaurants moving forward. While it does represent an investment, the dividends for that investment are huge.
For example, investing in self-service kiosks like those available from INFI can reduce a business's labor costs, but they can also increase revenue. Studies show that a self-ordering kiosk increases the average order's overall value. For some reason, people are more prone to say “yes” to up-selling when ordering on a kiosk than when ordering with a cashier. For example, McDonald’s saw a 4.8% increase in sales when they implemented self-service kiosks, even without increasing customers and traffic.
3) Invest in Training Programs
Team members are invaluable to the modern restaurant in light of these labor concerns. This makes employee retention a top priority.
The best restaurant management plan will have a plan for training employees. Not only are well-trained employees great at their jobs, but they also have higher job satisfaction. Job satisfaction reduces the risk that they will quit prematurely and add greater problems to the growing labor problem.
4) Saving Money Creatively
Increased food costs and labor concerns mean restaurant owners must find ways to cut costs. Limiting staff is not going to work, but there are other options. Small changes, such as energy-saving lighting, can lead to large savings for a restaurant.
The key to making these changes is doing so in a way that does not hurt the customer experience. Energy-saving light bulbs and low-flow faucets are easy and hardly noticeable changes, but changing food ingredient quality would be something customers would notice — and not appreciate.
Changing suppliers for something like napkins or cleaning supplies in order to save money is a wise choice because this has minimal impact on the customer experience side of things.
5) Delivering Exceptional Customer Service
Keeping customers is almost as important, if not more so, as keeping employees. Customer service must shine in the coming years as competition increases and customers become pickier.
Customers have more and more platforms to write complaints, too. They can go online and discuss their frustration with the service received in mere moments after leaving your restaurant. Thus, providing exceptional customer service is vital.
6) Catering to Food Allergies
Gluten-free and dairy-free diets are becoming increasingly popular for both medical and general health reasons. Restaurants that can provide these types of meals for their customers may see an increase in customer loyalty and overall sales.
To provide allergy-friendly dining experiences, restaurants must train their employees about current protocols. Also, you must be careful about advertising a food as completely “safe” — rather, you can offer options that may be more “friendly” to those with an allergy or sensitivity concern.
7) Consider a Specialization
The modern restaurant needs a way to stand out. Even in your particular niche, consider finding a way to specialize. Become the spot everyone talks about for a particular dish, or indulge your customers in larger-than-life desserts. You can even specialize by creating a unique ambiance in your restaurant or incorporating a theme to entertain customers while they eat. The only rule to this tip is to do something that will set you apart — not make you blend in with every other restaurant on the block.
Think carefully about your menu items. Is there something you’re particularly famous for already? If so, market that as your specialty. If not, then make something new. Find something that makes you unique compared to the other restaurants in your market that offer similar food.
8) Focus on Customer Research
Who is your target customer? Make sure you do ample market research to determine your target demographics, their likes, dislikes, and expectations: A restaurant that will succeed in the current market is one that knows their customer.
Many restaurant managers are surprised that this is an area where self-service kiosks like INFI's can help. These kiosks track many metrics about customers and their orders. When paired with apps that have customers sign in or loyalty cards that customers scan to earn points and discounts, these systems can even track data about individual customers. This data is invaluable knowledge you can use to serve your customers better and improve their experience with your establishment.
9) Maintain an Optimal Workflow
Through better employee training and improved restaurant technology, you can optimize your business's workflow and get food to each customer more quickly. This is essential for today’s restaurants with the increase in online and app-based orders.
Make sure your technology is up to par — and that your team members know how to handle it. Also, remember to look for tech that streamlines the kitchen and the front-of-house experiences.
10) Create Customer Loyalty Programs
Finally, one way to grow a business in potentially challenging times is with a customer loyalty program. Customer loyalty programs reward customers for coming to the restaurant. Loyalty programs should add a reward, like a free side or a discounted service, for customers who return to your restaurant. Other incentives might be scratch cards that offer coupons and freebies, knowing that every customer who comes in with a scratch card will likely bring other customers to make purchases.
Apps make customer loyalty easier because everyone controls their own app registration and use. You can also offer old-fashioned things like punch cards or scanned loyalty cards. Self-service kiosks can even give customers the option to sign in using a phone number or email address.
With customer loyalty initiatives, you not only encourage customers to return to your restaurant, but you also gain a way to track their buying behaviors and habits. This can help you improve operations within your restaurant even while encouraging more future purchases.
What Does the Future of Restaurant Management Look Like?
What is the manager of the future going to look like? Here are some predictions to watch for as the restaurant industry moves forward.
Heavy Emphasis on Tech
The future of restaurant management is going to be a technology-heavy one. Restaurants have lagged behind in embracing modern technology, and COVID-19 forced their hands a little. Now, customers have come to expect the convenience of online and mobile ordering, and they continue to demand it. Restaurants and their owners must step up to embrace this trend.
By embracing technology and continuing to stay on top of changes with tech, restaurants will be able to “future-proof” their business models. They will also see a greater number of orders and higher ticket values on those orders in the future.
Menu Engineering as a Top Priority
With limited access to ingredients, many restaurateurs are getting creative with menu engineering. Menu engineering is exactly what it sounds like: carefully designing your menu’s appearance and offerings to entice customers to buy your most profitable items.
Because customers spend just a few seconds browsing your menu, it’s crucial to draw their attention to the right items.
Keep in mind that menu engineering also includes removing unprofitable items from your menu, so restaurant owners will need to revisit their menu design periodically.
Smaller Real Estate Footprints
Dark kitchens are starting to pop up all over major cities. These restaurants have no dining location or brick-and-mortar storefront — instead, they operate on a delivery-only model.
The increase in dark kitchens will lead to a smaller real estate footprint for the modern restaurant. Increased costs for real estate will also push this change, and tomorrow's restaurant managers will need to purchase smaller spaces to stay relevant and effective.
Improved Marketing Effectively
All of the economic challenges in the post-pandemic restaurant industry mean restaurant marketing will be a vital component of a successful restaurant. Managers will need to think outside of the marketing box to find success. Not only should they use traditional marketing channels, but they should also look at marketing through:
Social media
Google My Business and Google Maps
Podcasts
Messaging platforms
Apps
The more people who hear about your restaurant and its offerings, the better your chances of success.
Focus on Health and Safety
Finally, restaurant management will require a heavier emphasis on health and safety. This increased awareness is due to the lingering effects of the pandemic. Restaurant managers will need to ensure customers feel safe to dine at their places, and communicating the measures they take to increase dining safety is a key to that.
Level-Up Your Restaurant Management With INFI
Technology remains a key focal point in each of the trends and changes affecting the restaurant industry. From improving customer experiences to ensuring accuracy in tracking guest data and inventory control, the right POS system with self-ordering features is essential.
INFI offers a self-service kiosk that can help with all of these concerns. Easy to implement and known for a high ROI, INFI’s ordering system will help the modern restaurant manager better handle customer and employee expectations. Schedule a demonstration of our self-service kiosk today, and see how we can transform and future-proof your restaurant.