Episode Transcript
[00:00:00] You need a system for absolutely every aspect of your restaurant. And if you don't believe me, I'm gonna use this episode, today's episode, this very short episode, the first of the new year, to convince you that I'm right. Stick around.
[00:00:14] There's an old saying goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown.
[00:00:24] This is Restaurant Strategy, a marketing podcast for anyone who's.
[00:00:45] Hey everyone, thanks for tuning in. My name is Chip Close and this is Restaurant Strategy, a weekly podcast all about helping chefs and operators build more profitable restaurants. Each week we toggle back and forth between a monologue style format and an interview. But the goal is always the same. To take complicated marketing concepts and and make them both understandable and actionable. Why? Because like I always say, information is only as valuable as the action it inspires. Now, this week's episode is sponsored by virtual restaurant group vrg. They offer innovative turnkey delivery only brands that you're able to easily operate out of your existing restaurant with very little disruption to your current operation. So we're talking ghost kitchens, right? A restaurant that would only be visible on third party delivery sites as a way of driving additional revenue. Using the infrastructure you've already got, by adding virtual brands into your business model, you're able to diversify your revenue streams and in the end generate more revenue. So you've already got a kitchen, right? A staff, the space to do this. Why not maximize your square footage by adding additional brands to help you increase your bottom line?
[00:01:57] Best of all, VRG handles everything on the backend. They provide Qubo technology totally free. The very architecture of this software allows you to turn on as many brands as you want, list those brands on as many partner sites as you want, and field all of the orders through one singular tablet and printer. You're not locked into any long contracts. It's 100% free to start VRG's flagship brand, it's called Midnight Munchies. It was one of LA's very first ghost kitchen concepts and generate up to three $30,000 a month just in online ordering. Revenue onboarding is super easy with recipe guides and step by step training for you and for your staff. Visit virtualrestaurantgroup.com chip and use the promo code CHIP2021 to get started. That link is in the show notes. Now today we're talking about systems, right? I've talked about systems and goals in the past. I'm going to Talk about priorities and goals. But I think you need to have a system for every single thing in your restaurant. The more I work with operators, right, the more I see, you know, all these independent restaurant owners out there. The one common thread I seem to see over and over and over again is that they're working really hard, they bring lots of passion and energy to the table. But what they're lacking is systems, right? A process for doing things right, A process for assessing the profitability of the restaurant for, you know, staffing and developing that staff and marketing and assessing what.
[00:03:31] And whether that marketing is working.
[00:03:33] What they're missing is a system is to be systematic about what they're doing. This is something that the restaurant groups and big restaurant chains do very, very well. That's how they make sure they're profitable and they guard that profitability by having a system. So today I want to walk you through all the different areas that I think where I think you need a system in place. And hopefully you've already got a bunch of systems in place that this is just acting as a reminder inviting you here at the begin, beginning of the year, right? Let's set things, let's get started on the right foot. So if you've already got a lot of there a lot of this in place, hopefully this is just inviting you to tighten up a little bit. Maybe there are areas that you have that you've not touched. And this is a reminder to go in and finally put a system in place. And for those of you out there that are just flying by the seat of your pants, I hope you start understanding just how much work is to be done. But the beauty part is, is when you systematize something, you make it scalable, you make it replicable, which means this business can grow, which means this business doesn't need you to be there to accomplish the day to day to day operations. Right? The point is, what you're trying to do is I want to get everything out of your head, out of your brain, onto a piece of paper, into a computer, into a binder. I want to get it out of your head and into your staff's heads. I want you to teach them everything you know how to do. Because if they know how to do what you do, then there's no need for you to be there. Meaning you can remove yourself from the daily operations. We talk a lot about the daily grind. You shouldn't need to be in the daily grind. All this time spent working in your business means time you're not spending working on your business. So here at the beginning of the year, I'm going to invite you, I'm going to challenge you to start working on your business as a way of really starting to remove yourself from the day to day. Not saying you won't be continue on with the day to day. You can do it if you want, but you don't have to do it in order for your business to stay alive. So the first thing I want to talk about is staff. Staffing obviously sort of dominated 2021. I don't think it's going to go anywhere as far as a problem we're going to be dealing with. So let's start thinking about staffing, right? Specifically interviewing, hiring and training. What's the system that you have in place for hiring somebody? Right? What happens if somebody walks in and drops off a resume? What happens next? What's step one, two, three, four, five, Right. Who do they hand it to? They hand it at the podium to a host.
[00:06:11] Does the host call you right away or does the host take that and say, thank you very much, we'll pass this on and we'll be in touch?
[00:06:18] Do you sit down with that person right away? Do you call them back? Do you email them back? What is the system when somebody comes by looking for a job? Likewise, when you place a help wanted ad or what's the system you have in place for writing up the job description, for getting that job posted? What's the criteria for boosting that post? Right. How long is it up? What do you do when the resumes start coming in? What's your first step, your second step, your third step? Do you just send an email? Do you send a text? Do you call them right away? Do you try to get them on the phone and have kind of a pre interview over the phone? What is the system in place place for hiring new staff? Right. Once you get them in the front door, who interviews them? What's the structure for that interview? How many interviews do they have to go through before they're hired? Right. And then when they are hired or when they're invited for an observation trail, what is the process of training? Right. So I've talked about this before where I want you to think about how do you get somebody prepped for the first seven days, Right. To be able to, over the course of a week, to be able to be up to speed enough to be able to take a section, right? The station in the kitchen, section on the floor, you know, shift as a bartender, whatever it is, you got to bring that person up to speed quickly, what is the system that you have in place for getting that person up to speed? Likewise, then, when we look beyond that first week, how do you get them?
[00:07:39] How do you get them to where they need to be by the end of the first 90 days? Right. How do you continue their education beyond just the crash course you give them in the first week? What is the system in place for interviewing and for training your team? Right. What about for, again, staff development? Right. So again, like beyond that first week, how do you continue to develop them and help them to grow over the course of the first 90 days? How do you help them grow from one position into another? How do you help transition a back waiter to a front waiter, or a busboy to a server, or a busboy to a food runner, or a runner to a captain or a server to a manager, a bartender to a manager, manager to a general manager? Do you have a system in place? How do you train those people to do the things you need them to do?
[00:08:30] What do they need to know in order to excel in this new position? Right. So it's really important to understand what they already know and what they need to know and how you're going to get them across how you're going to get them across the finish line, get them to where they need to be. Right? So part of this is, do you have a system for assessing talent, Right. Do you sit down, do you do annual reviews or twice annual reviews with your team? How can you tell if somebody is ready for a move up or is maybe unhappy in their current position and they really need to move up?
[00:09:04] How do you assess that? And then how do you develop them? Right. I'm inviting you to put a system into place for hiring, assessing and managing your human resources, the human capital that you've got in your place, Right? We talk a lot about institutional memory, right? That if you've got a lot of churn, somebody comes in, six months later, they're gone. People come in, six months later, they' gone or they're gone after a year?
[00:09:30] That's not helping you grow. It's not giving stability to your restaurant. So do you have a system in place to help cultivate talent and nurture that talent and help them grow as their priorities change? And we're gonna talk a lot about priorities at the very end of this episod. But priorities are crucial, right? The things you wanted at 20 and 30 are different than at 40 and 50 and 60, and the same is true for your staff. How can you continue to support Them and be a place that will, that will support their lives and the things that they want. So there you need systems for the people for, again, assessing, acquiring, for training, for managing and for developing that staff, right? You need a system for profitability. So I always talk about this 30, 30, 20 rule, right? If you've taken any of my program, if you've coached with me, you know what this is, right?
[00:10:21] The bottom line is whether you use my, my, my framework or one on your own, you need a framework for understanding what, what profit you're going after and how to guarantee that profit, right? What does profit look like and then how do you guard against that? So I talk about this from time to time with my clients. I'll share it with you guys here. There are daily, weekly and monthly numbers that I want you to be able to track, right? And I want you to put a system in place for, for capturing these numbers and for assessing these numbers, for analyzing these numbers. So on the daily basis, every single day, I want you to look at revenue from the day before, your cover counts from the day before. And then your check average, right? Check average is just your, just your gross sales divided by the number of covers who came in, right? That's going to give you your per head average. On average, how much did, did a person spend when they walk in? Right? I think you want to know what that's like on a Monday, Tuesday, Wednesday night, What's that like on a Thursday or a Friday? On a Saturday night, right? Is it trending up or down? Right. On Mondays is it pretty steady? Wednesdays, is it going down? Thursdays, is it going down as well? Fridays, is it increasing? Why is it increasing on Fridays and going down on Thursdays? If you track this every single day, you'll be able to assess, right. And analyze that, but without the data, right? It's that Peter Drucker quote. What gets measured gets managed. If you're not measuring it, how can you possibly manage it? So on a daily basis, I want you to track revenue covers and the per head average on a weekly basis. I want you to look at your food cost percentage and your labor cost percentage, right? Together those make up your prime costs, right? And I want you to understand where they are. If they're trending up or down, are you able to manage them? And what is the relationship to overall revenue? Right? That's how you guard profitability, by making sure those numbers, those percentages stay tethered to the revenue that you're driving in your restaurant. And then finally, on a monthly Basis, you got to be doing a P and L, right? So the bigger, bigger restaurants, anybody with an accountant or a bookkeeper, certainly the restaurant groups do this. Big restaurant chains do this. They look at their P and L, right? The other piece to this is the budgets, right? You need pro formas. You need to build a budget for your quarter, for your year, and then you need to balance them, right? You need to measure them against the actual P and L. So what did you think you were going to make when you made your projections? And in actuality, what did you make? The beauty part of this is that over time, you're going to get better and better and better, and you're never going to get perfect. You're never going to, you know, you're never going to project, you're never going to guess exactly right. But you're going to get closer and closer and closer the more historical data you have and the better you get at analyzing all this. So you need to put budgets together either quarterly or annually, right? And you need to constantly be using those budgets to do your payroll. You need to give those numbers, right? Set budgets for your kitchen, to order food to your beverage director, to order wine and spirits and beer, right? You need to hold them accountable to that so you can guard that profitability. So do you know what sort of profit margin you're making or you can make? And do you have a system in place for keeping that, for guarding that? Right. For assessing the profitability in your restaurant? Right. This is super, super important. So even if you're. The only things you take away from this episode are that you need a system for identifying, acquiring, assessing, training and developing your staff. And you need a system in place for guarding the profitability of your restaurant. If you only take away those two things, I will be very happy. I've got a couple more topics, though, when we come back. I promise you this episode was going to be power packed super quick because you got way too much to do now to get geared up for the year ahead. I'd rather keep this really short and actionable so that you can spend the rest of your time actually putting this stuff into action. So be right back with some more after a word from another one of our sponsors.
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[00:16:16] Now, this week's episode is all about putting systems in place, right? You need a system for everything in your restaurant. We talked about the people. You need a system for the people. We talked about profits. You need a system for profits. Now let's talk about marketing.
[00:16:30] You need a system for marketing. Otherwise you're just going to do stuff. To do stuff, right? You're just going to be. You're going to just be doing what the restaurant down the street does. You're going to be doing what you did last year. You're going to be doing what you think you should be doing rather than tethering it to a problem and a goal. What's the problem? What's the goal? What do we need to do to get us to that place, right? So when we talk about marketing, you need a budget, right? That's tied into your budget projections. You should have a set dollar amount every single month that you spend on budget on your marketing. And you split it up however you want to split it up, but it's the same. It's a number every single month doesn't have to be the same number, but it's A number every single month. It is a set number, right? You set it at the beginning of the month and you spend it all.
[00:17:17] Don't get halfway through the month and be like, well, if I save a little money, commit yourself to spending it all. And I'll tell you, we're talking about this in a preview on an episode down the line. We're talking about marketing budgets. We're going to talk about the kind of the philosophy behind setting a budget and then spending all of your budget. Trust me, you're going to thank me when we get to that, when we get to that episode. But when we talk about budgeting, I want you to set a budget, I want you to set an agenda, I want you to build a marketing plan. We've gone over this in the past, right? I've talked about this before. You need a marketing plan, right? Seven different steps, seven sections that help, that help assess what you're doing, helps assess your market so that you and the people who work around you and for you can better.
[00:18:00] Can better assess. Can better understand who you are and who you're for, what problem you're trying to solve.
[00:18:07] Your value proposition, right? Why somebody should choose you over one of the competitors.
[00:18:12] It helps you understand your communication strategy, right? What is your value? And then how do you communicate, communicate that value to the people you're trying to serve, right? So you need a marketing plan, you need a marketing budget, and finally, you need a marketing calendar. I've got the marketing calendar. I've given it away. I will give it away again. Email me chipclose.com C H I P K-L-O-S-E.com It's a template. You bend it to do whatever you want. I use it every single year. I use it for all of my clients every single year. I will happily give it away. All you gotta do is email me and I will send it to you. So you need a budget, you need a plan and you need a calendar. You need to stay organized all year long, every step of the way, as we move along then, right? I mentioned Peter Drucker earlier in the episode. He's famous for saying what gets measured gets managed. And he's absolutely right. If you're not measuring it, how can you possibly manage it? You don't know if it's up or down or trending in a certain direction or staying the same or stagnant. You've got to look at the numbers. And if you say you're not a numbers person, I'm going to push back and say, unfortunately, you're in business, and so you need to be a numbers person. I'm not a numbers person either. I'm horrible at math. I just work really, really hard to be able to understand what I need to understand in order to do my job well, right? So you need to track everything because what gets measured gets managed. You need to set goals, and you need to figure out how you assess success, right? What does success look like? I've talked a lot about profitability, right? What's the number you need, and what does that number signify? Why is that important? Right? Profit is nice, right? More profit, more money. It's all great, but it's worthless unless you know what it gets you. If it gets you stability, security, financial freedom, a better house, the ability to put in for your. Your kid's college fund, right? All of this. How do we set goals? Right? What do we want? What, What.
[00:20:11] How do we get there? What does that. What does that really mean? What does that dollar amount mean?
[00:20:17] So how do you have a. Do you have a system in place for assessing that, for taking, for setting your priorities, Right? So I always talk about this, right, that systems and goals. And priorities. And goals. I talked about this a couple weeks ago. I've talked about this in the past.
[00:20:32] Again, I use Peter Drucker as the jumping off point on this, right? But you need a goal, right? Every. Every action should be tethered to a problem.
[00:20:41] Every problem should have a goal. And then a series of actions gets you from the problem spot to the goal spot, right? From, from. From unprofitable to profitable. Those are specific. Those are specific places. I am here, and this is unprofitable. I need to get to there, which is profitable. Profitable, right? What am I already doing to try to get me there? What's working, what's not working, and what else can I try to try and get me there, right? That's a system you put in place for achieving a goal. And then you need a system for assessing the success of whatever action you're doing. Again, what gets measured gets managed. How long are you going to do it? What budget, and what's the criteria that you're using to determine whether it was successful or not?
[00:21:25] Finally, then I want you to think about every single task in your restaurant. All of the daily tasks, right? Is there a system for when staff members come in to work the shift? Meaning do you have side work sheets?
[00:21:40] Do you have prep sheets for your cooks? Do they know their meats? Do they know their setup? Do they understand what they're supposed to prep when they come in, what a dish is supposed to look like. Do you have a system for assessing, assessing the knowledge base of your team? How do you judge whether a bartender really knows the food and the drinks?
[00:21:58] How do you do that? How do you tell whether the server knows the food well enough to be on the floor, whether they have the requisite product knowledge to be a successful salesman in your restaurant? Because that's what they are. They are in sales. They got to know that. How do you assess that? You need a system for that. You need a system for all of the daily tasks, for cleaning up, for taking inventory, for placing orders, for getting the dining room set, for dealing with returned food. For all of this, you need to think about it. They call it, you know, SOPs, standard operating procedure. When this happens, this is what we do. When this happens, this is what we do. If you don't have SOPs, I would urge you to take some time now in January and February, when it gets a little bit slower for most restaurants, and start putting these into place. And no, you don't have to do them all yourself. You can. Can certainly delegate them. You can delegate them to your managers, to your partners, to your hourly staff, right? How does the barista set up the coffee station? Have them write it down. What are all the things you do in the morning when you get set? It's going to help you in case that guy gets sick. Then you can plug somebody else in there, or God forbid, if they move on to a new job, you're going to be able to hire somebody new and give them the sop. This is what we do in order to set up the station. This is what we do in order to make a cappuccino. This is what we do when we break down the station at the end of the night. You need a system for everything in your restaurant. If you want to know the difference between a failing restaurant and successful restaurant, a restaurant that scales, this is it, right? If you can write it all down, what you do, how you do it, and why, the way you do it matters, then it can be replicable, and then it can be scalable. Then you can open another one and another one, another one or two. You can remove yourself and have someone else come in and run it for you. Again. When we talk about systems and goals, this is why we do it. When we talk about priorities and goals, this is all tethered to this, right? I want you to think, as we just head into the new year now, such a great time Right. A blank slate, blank canvas for you to think about the year ahead. And I want you to think about what your priorities are. I want you to think about what your priorities were a year ago, two years ago, five years ago, ten years ago ago. They have changed. Undoubtedly my priorities have changed from when I was 20 to 30, to 40, now, my 40s. My life looks very different. The priorities, the things that are important to me are very, very different. Undoubtedly they are. For you and also for your staff. This is all connected. You need a system at the end of the year or the beginning of the year for assessing where you are and what you want in life. So that's the last system. This is what I meant. I said this earlier. We're going to come here, we're going to land here, we're going to end here. But I want you to know, I want to, I want to ask you, what's the system you put into place for assessing whether the things you're doing are working and whether the things you're doing are still what you want?
[00:24:43] I hope you understand what I'm talking about. I hope you guys had a really great holiday season. I hope you're geared up for the year ahead. If you haven't done so yet, please take a few minutes and leave us. A five star rating and review on Apple Podcasts. It really does help us boost in the rankings. We are consistently listed in the top 100 marketing podcasts on Apple Podcasts. So our community is growing. I know all those reviews are making a difference and I can't thank you enough. That's it for today. You need a system for everything in your restaurant. I know it's busy work, but delicate. Bring on partners and teams. Get it done. I want to thank you for being here today and I will see you next week.
