[00:00:00] Have you ever heard of Pareto's principle? Sure you have. It's otherwise known as the 8020 rule, right? And we find it popping up all over in nature, all over in business, especially in our business. Pareto's principle basically says that 80% of the results come from 20% of the effort. That most of the things we do actually don't influence or affect our business in the way we need it to. That there's just a few things we do. 20% of our effort actually goes into making the impact we wish to see. So we're going to talk about that. We're going to talk about how that appears in your business because we'll see it everywhere from, from product mixes to, to employee productivity and on and on and on. But we're going to use Pareto's principle as a way of talking about our managers. And I want to help you create better managers, more effective managers, because I think what you'll see is that 80% of what your managers do actually doesn't matter. Yes, it has to get done, but it doesn't influence the end result, the bottom line. So what I really want to make sure is I want to make sure you have your doing those 20% activities, the things that really will move the needle in your business. All of that and more on today's episode of Restaurant Strategy.
[00:01:13] There's an old saying that 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. This is Restaurant Strategy, a podcast with answers for anyone who's looking.
[00:01:44] Hey everyone, my name is Chip Close and this is Restaurant Strategy, a podcast dedicated solely to helping you build a more profitable restaurant. We cover marketing, we cover operations, we cover just about everything. In between, each week, I leverage my 20 plus years in the industry to help you build that more profitable and more sustainable business. I also work directly with operators all over the world through my P3 mastermind program. What are the three P's? They stand for? Profit, process and progress. They are our core values. Literally, they provide the foundation for all of the work we do. So if you've got a busy restaurant but struggle to generate consistent, predictable 20% profits month after month, then please set up a free 30 minute strategy session with me. I'll get to learn more about you and your restaurant. You'll get to ask some questions about the program. You to see if you're a good fit for that program, visit restaurantstrategypodcast.com schedule as always. You'll find that link in the show notes.
[00:02:40] Now, have you read the 2023 State of the Restaurant Industry report from the National Restaurant Association? There's a lot to digest in that 41 page paper, but that's where you can lean on Spot on, the presenting sponsor of that report. As a top rated restaurant technology company, Spoton leads from the front.
[00:02:58] Not only are they helping restaurant owners make sense of the changing landscape, but they're working directly with restaurants to overcome challenges with innovative solutions. Their handhelds and QR ordering can help you turn more tables while creating a better guest experience on the back end. Their labor management tools can save up to 20 hours per week on tasks like scheduling, payroll and tip distribution. And when it comes to rising costs, Spoton's reporting gives you the real time data you need to make informed decisions about your menu, about your employees, about your operation.
[00:03:30] Best of all, Spoton's direct online ordering puts you in control of your takeout and delivery operation without the third party commissions. They've got all these tools in one integrated system backed by a customer support team that actually answers the phone. Learn more by visiting spoton.com chip as always, you will find that link in the show notes.
[00:03:51] Now, when we talk about Pareto's principle, this 8020 rule, we talk about your managers, we can't go forward until we begin talking about what actually matters in your business. I think the number one thing, really the only thing that matters in your business is profit. Profit literally will allow you to do anything you want, right? If you want to grow the company, you need to show consistent, predictable profits. If you want to step away from the business, you need a system that can generate consistent, predictable profits. If you want to expand, if you just want to come in, whatever you want to do, if you want to sell your restaurant, whatever your goals are, profit is the path to get you there. And too often we don't have a path to profitability. And again, I've worked with hundreds of restaurants over the course of my career and I can attest to this. There are restaurants that know how to do this work and there are restaurants that don't. There are restaurants that know that they have to do this work. And then there are all the other restaurants that don't realize they have to do this work. Just like we say in the intro music every week, right? Three kinds of people in the world, right? Those who see, those who will never see, and those who can see when shown.
[00:04:58] So much of what we do, so much of what I do or I Hope to accomplish on this show is showing the people who wish to see, who are open to discovering, to learning new ways of doing things. That's the whole point of this show, that you tune in for 30 minutes a week, 60 minutes a week, something in there to get better, to learn more about your business and how to run your business better, more efficiently, more effectively, more profitably.
[00:05:22] So it begs us to say this right from the outset. In order for us to ask more of our managers and to get them to do what we want, we first have to make sure to identify what it is we want. What you want is a profitable business. What you need from your managers is to manage then for profitability.
[00:05:43] So we have to start right there by talking about our expectations, our expectations for our business. We expect it to be profitable. There is a path to profitability. Otherwise, why bother having a business and then our expectations for our team, right? So this is something I say a lot of time. You sh. I say all the time, you should expect more from your managers. And managers, listen, if you're listening, do the things that I talk about on this episode, and I promise you will get more promotions, you will get better jobs, and ultimately, you will make a better life for yourself, your family, your employer, and everyone who works for you. You will find more purpose in the work. You. And I can say that because I found more purpose in my job when I was managing restaurants. Once I understood that the whole point was profitability, it wasn't about good food, it wasn't about great wine, it wasn't about providing hospitable service.
[00:06:38] It wasn't.
[00:06:39] All of those things are in service of profit. And when you realize that, when you realize that's the one thing, as Gary Keller says in his book, the one thing, a book that I love, that has really impacted me this year, the only thing that matters is profit. Now, the reason we serve great food is because it gets people to come back to generate more revenue and, yes, more profit, right? We provide good service because it helps us drive more sales and it makes people feel comfortable so that they're more apt to come back time and time again to drive more revenue and, yes, more profit.
[00:07:09] So all of those things are important. Obviously, I'm not an idiot, but it's not more important than profit. Those things are in service of the bottom line.
[00:07:19] We as owners, as operators, have to understand that, and then we have to hold our managers to expectations. So let's talk really, really clearly, really quickly about all the things your managers do, right? You expect them to show up on time, right? Ready for work. They open the door, turn on the lights, right? Set up for the shift, check the staff in, do the schedule, maybe do the inventory, right? Do the side worksheets, be there to deal with customer complaints, be there to do comps and voids and promos, and then to do the bank drop at the end of the night and to tip out your servers and to close out and then finally lock the doors, turn out the lights, and go home.
[00:08:01] That's a whole lot of stuff that your managers are responsible for every single day. And what I'm saying is that all of those things will not affect the profitability of your restaurant nearly as much as the things I'm going to show you over the course of this episode. There are things that you have to expect your managers to do, things that you have to show them how to do. And we'll talk about what we mean by that later in the episode.
[00:08:26] But there are things in there that are crucial that I didn't name. So turning on the lights, checking in the staff, doing the schedule, doing the inventory, you know, monitoring the shift, cutting people, dealing with comps and promos and the bank, dropping the closeout and turning out the lights and locking the doors, all of those things are crucial, but they. They pale in comparison to the other things I need you to have them do.
[00:08:51] They do they pale in comparison? Because those things on their own are not about managing the profitability. They're about babysitting the floor. You have them show up to check in the staff because you don't trust the staff to show up and do what they're supposed to do without a manager making sure they do it.
[00:09:07] That's babysitting.
[00:09:10] You don't expect the staff to do the proper cash drop or to tip themselves out appropriately. And I get it, you don't want to trust cash with the bartender, with the servers or whatever. So you have a manager oversee it, but that's babysitting. That's because you don't trust your line level hourly employees. And I understand, we all do it. This is a key function of managers.
[00:09:30] It's important for them to do it. But it is not more important than all the other things than managing for the profitability of the restaurant. And we will get to that as we go along. So we have to start about the expectations. The expectations we have for ourselves is that we need to build a profitable business. If it's not profitable, doesn't matter how good the food tastes, how nice the dining room is. It's not going to live. It's not going to survive more than a couple of months or a couple of years because you just can't sustain it. When I talk about it at the beginning, I said helping you build a more profitable and a more sustainable business. Sustainable not in a buzzword sort of environmental way, but in a sustainable manner. That this business could go on for 10, 20, 30, 50, 100 years. That there's legacy here that you could grow and expand this, that you could pass this on to your children, to the next generation and future generations will get to try your food and experience this restaurant.
[00:10:22] That's what I mean by sustainable.
[00:10:25] So if the business isn't profitable, it cannot sustain itself. It can't survive as long as you're not there, as long as somebody who knows the business isn't there, keeping track of it.
[00:10:36] So a key part of this show is to help you build a profitable restaurant and to help you build a sustainable one. A sustainable one. One that can continue without you, whether you're gone or whether you're just on a beach somewhere. One that can sustain and provide for the employees who work for you, for your family, for your kids, who you leave this restaurant to. So when we talk about that, I want to be really clear what is meant by that.
[00:11:00] Really, really crucial that we understand profit is key. Everything else we do, the great food, the great service, the great decor, is all in service of the bottom line of profit. Net income, net operating income is what we are after.
[00:11:16] Your managers have to manage for that. Now, I've said this before. It bears mentioning again because maybe there are people new to the podcast. Over the last year, I've said this quite a bit, and I believe it's true. I think restaurants, right, our industry is actually much more similar to manufacturing to a factory than we would like to believe.
[00:11:35] Here's the key difference, though.
[00:11:38] A factory is a really boring job. No little kid at the age of eight says, you know what I want to be when I grow up? A factory owner. Nobody says it. In fact, a factory requires a huge capital investment. It requires a lot of people, a lot of moving parts.
[00:11:56] It's not sexy work to run a factory. The only reason anybody would choose to open a factory is if they knew they could make a widget for $1 and that there was a market where they could sell that widget for $5. If they knew they could bring 10,000 widgets off the line every single day so that they could spend $10,000 every day and make $50,000 every day. Or make $40,000 in profit. And I run this factory seven days a week, 365, and I can make quite a bit of money.
[00:12:26] That's the only reason to open a factory.
[00:12:29] Now, there are many reasons why we open a restaurant, but I would invite us, and I would like you to go with me on this one as a thought experiment and say, hey, if the restaurant wasn't profitable, there's no reason to open the restaurant. Forget the fact that you serve great food and people love your food and you just want to take care of people. That's not enough.
[00:12:50] And I think we go into it thinking it will be enough, but it's not sustainable. Again, back to that word, profitable and sustainable. It's not sustainable because if you get hit by a bus and you are required to open the place, the restaurant requires you to actually make it work. Well, then by definition, it's not sustainable. It can't sustain itself without you. I think it's dangerous and irresponsible to run a business that's reliant on any one person, whether that's the busboy, the bartender, the chef, or the owner.
[00:13:20] Now, of course, in the beginning, in the beginning of the life cycle of a restaurant, yes, you need to be there all the time. It does require you to be there.
[00:13:28] You put in the hard work, hopefully in the beginning, to create a business that can eventually exist without you, so that you can then determine the relationship you have with your restaurant. Right? That if you want to be there every night on the line, great. But you know that you don't need to be in order for it to stay open. If you like that, if you love doing that, then that's where I want you to be. But maybe you want to live on a beach somewhere, or maybe you want to go open another restaurant. Maybe you've got other desires, other ambitions, and that's okay too.
[00:13:57] You create a business that can survive without you, so that you can be there if you want. You can go away if you don't want to be there, or you can just come in and dine, or you can just come walk the dining room. That the restaurant doesn't need you to exist, but you want to be there to touch tables and greet guests and buy people drinks, and I think that's great.
[00:14:17] But I want you to be able to dictate the relationship you have with your restaurant.
[00:14:21] So ultimately, we come down to management, how we delegate the duties that we do in the beginning when we open a restaurant, and we do everything in the beginning and eventually There has to be a period six months later or a year later or 18 months later, whatever that number is. There has to be a point later where we give it away, where we delegate our roles so that we are no longer required to be there. And again, that requires profit because the more people you bring in, the more you're gonna have to pay in payroll. And so you need more revenue to be able to pay for that payroll. And too many restaurants, I feel like live right at that break even point. And I spend a lot of time talking to restaurant owners and I have the same conversation. They say, you know, we can't do that because I just, we don't have enough money, we don't drive enough revenue. Well, then the business is built upside down, it doesn't work.
[00:15:14] And we can get into why that happens culturally, why that happens, especially in this country.
[00:15:20] But I believe, and I think the people who listen to this podcast want to believe what I'm preaching.
[00:15:25] But I believe that a restaurant should be able to exist without the owner, that we don't need to have owner operators, that the owner should just have a certain relationship with the restaurant, a restaurant that they believe they want to have.
[00:15:37] So again, as we're talking about this, we can't go any further until we talk about our managers. And again, it comes down to expectations. The expectations you have for your restaurant and then the expectations you have for your managers. Too often, often our restaurant managers don't do what we actually need them to do. They don't do what will actually impact our business.
[00:16:01] So instead of all the stuff I named is part of their job, but it's a small part of their job. The most important tasks that you can get them to do is to do proper forecasting, proper budgeting, focusing on revenue management, then focusing on expense management, forecasting, budgeting, revenue management, and expense management. Right. How much do we think we're going to make this month, given that forecast? How does that, we create budgets from that.
[00:16:32] Then how do we manage our revenue to make sure we hit the targets we've set for ourselves? And then how do we make sure to manage our expenses? Not cutting costs, but managing our expenses, Tethering key expenses to revenue goals.
[00:16:46] You do those four things, your restaurant will change overnight. And we're going to talk about how we do that in just a second. I've got five tangible things that you can have your managers do to make them more effective in their position. It will also give them, like I said at the beginning, more purpose in their day to day. I Know that because that happened to me. Those five things after a word from another one of our sponsors now today's episode of Restaurant Strategy is also brought to you by seven Shifts. Seven Shifts is a team management platform built specifically for restaurants. Great restaurants are built by great teams. And seven Shifts is your secret weapon to better understand your restaurant, to hit labor targets and to keep your entire team connected with drag and drop scheduling in app communication, task management, tip management and more. It makes restaurant work a whole lot easier from back of house to front of house. Managers, franchise owners and larger corporate teams. Seven Shifts has benefits at every single level. Plus it integrates with the other systems your restaurant already uses like POS and payroll. Turn your team into your competitive advantage. Restaurant Strategy podcast listeners get three months absolutely free of the software. Get started at 7shifts.com RestaurantStrategy that's the number 7s h I f t s.com RestaurantStrategy to get three months free and join over 30,000 restaurants using 7shifts today. As always, you will find that link in the show notes.
[00:18:13] Now I think it's apropos that are the sponsors of today's episode, right Are Spot on and seven Shifts. These are companies that are putting out extraordinary pieces of software to help you better manage the back end of your business, to better help your managers manage the back end of your business. And in fact, many of the sponsors I bring on are tools or provide tools that help you get better at this. Kickfin does this, right? Seven Shifts, spot on Margin edge. Davos. Right, Davos Sales Tax Collection, on and on. These guys exist to help you better manage your labor, better manage your food costing so that you can keep track of your margins. Because we live and die by those margins. And if your managers aren't managing those pieces, then they're not helping you, they're not doing you any favors.
[00:19:08] Again, I ask that you take responsibility for that. It's about managing the expectations. The expectations you have for your restaurant, that the restaurant is going to provide consistent, predictable profit and the expectations you set forth for your managers. The problem is most managers never learned how to manage.
[00:19:26] Most managers just learned how to put on a suit, show up on time and sort of oversee the operation. We don't have managers, we have overseers. And so what I'm going to beg you to do on today's episode, that's what we're in the middle of. This is me on my hands and knees begging you to get rid of your overseers and turn them into managers. And if they can't be Managers, then to get rid of your overseers and hire and train managers, true managers, who will oversee and protect the profitability of your restaurant. Eventually, it comes down to a couple of key things that you can do with them. And that's what we're going to go over now for the second half of the episode. Right, so what are the five things I told you? Do these five things and you will make your managers better. And again, if there are any operators, any managers actually listening to this episode, right, you can help yourself. You will get promoted. You'll get better positions. You'll get jobs in better restaurants. You will get better jobs in better restaurants. You will make for a better workplace because your employer is going to make more money. Therefore, you're going to make more money. Your staff is going to make more money. Ultimately, it's going to be better for everybody, including your family and the people you support.
[00:20:36] So the owners that are listening, this is the five things I think you can have your managers do that will make them overnight more effectual, more effective. And the managers, if you do these things, you are going to be more effective in your role. Because everything you're doing so far, for most managers listening to this, you're an overseer. You are not a manager. You are overseeing the operation, making sure the place doesn't burn down, making sure everybody shows up on time, making sure everybody leaves as happy as possible. And while those things are important, oversight is only one aspect of a manager's job. A true manager manages for profitability.
[00:21:12] So we're not overseers, we are managers. We are not hiring and training overseers. We are hiring and training managers.
[00:21:19] So what are the five things? First and foremost, you have to educate and empower your management team, open the books and bring total transparency to the operation, and then give them the tools they need to manage for the profitability of the business. Now, that's packed. That's the first one, right? That thing is packed. I say this a lot. You've got to educate and empower them. So when you educate them about, hey, these are the revenue goals we need to hit, or this is, we need to get our cogs down to 31% or 26% or whatever they should be at, you're going to say, hey, I need cogs at 30% and I empower you to make the difficult decisions to make sure that happens. Or I need labor to be at 32% and I empower you to make the difficult decisions to get that labor under budget. Because it's black or white, it's either under budget or over budget, right?
[00:22:14] That's, that's what we're talking about.
[00:22:17] So we talked about it. Forecasting, budgeting, and then managing the revenue and managing the, the expenses.
[00:22:25] You have to educate them that they should be doing these things. You have to educate them about how they're supposed to be doing these things or how you want them to be done. And then we've got to be totally transparent about the operation so they can see what, how what they're doing affects the operation, affects the profitability of the operation. And then finally, you have to give them tools to do this, right? So if you want them managing labor cost and food costs, you've got to get them tools like margin edge or seven shifts if you want them managing the revenue, right? Building projections, forecasting and managing revenue, you've got to use tools like Spoton, right? You've got to use or create your own tools. But there's software out there that will help you do that, will help do this for you.
[00:23:10] But again, you've got to educate them, empower them, bring total transparency to the table. You just open the books and show them and then give them the tools and teach them how to use those tools so that they can do this. If you need any help in doing this, reach out
[email protected] it's C-I P K L O S E.com is as a large part of what we do. In my P3 mastermind program, most of the people who come to me come in with a very successful restaurant, right? They say, hey, we're doing $3 million in revenue, but we just aren't profitable. And I don't understand why. That's my first, favorite, favorite kind of client. Those are the best members because they've already got a product that people love. They got tons of people coming in, they're generating a ton of revenue. They just, they just aren't profitable. And we can show operators how to be profitable. So if you don't understand how to do this, if you don't have the tools in place, get in touch. I'll happily talk to you about the program, share some of the tools that we have. If you want to learn more about the software, I'm happy to point you in the direction of software tools that will allow you to do this. But we begin by, again, understanding that we need to do it, acknowledging that we need to do it, and then educating and empowering your managers, letting them know that oversight is one piece of what they need to be doing. But managing, managing for profitability is the main focus of their job.
[00:24:31] Now. That's the first one. Second one. I want you to help them get organized. Right. Organization will set you free. I discovered this a long time ago when I was running my agency. Juggling as many as 10, 12, 14 different clients Hands on doing a lot of work for them, right? Running a podcast, you know, every single week with, with sponsors and speaking gigs. I have to be organized because I got a lot going on in my life and I can either sort of fret and bring a lot of anxiety to the table, or I can just get organized, keep, keep detailed, you know, sheets and outline what I'm working on, what needs to get done when. Right.
[00:25:09] So help your people get organized. Organized in the way that they build their schedule to stay on budget.
[00:25:16] Give them the organizational tools to build forecasts, to look over past P and ls, make determinations about what went well and what didn't go well. Again, this goes back to that transparency thing. If you're not sharing P&Ls with your team every single month, you're missing a key opportunity to help, have them help you manage the business, manage for profitability. So again, that transparency goes right in keeping with organization.
[00:25:43] Help them put a system into place for when we review P and ls, when we forecast, for the following period, when we review those forecasts and how we generate budgets for all of the departments based on those forecasts. Right?
[00:25:58] I've said this. It's really easy if you want, right? So to make a very simplistic version of this. If you say, hey, I think we're going to generate $100,000 in revenue next month and you want to hit a 30% labor cost, then it's very easy. The most you can spend on payroll is $30,000. Now, that's hourly wages, salaries, benefits, taxes, your payroll fees, all in everything you spend on people. If you want it to be 30% of 100,000, that's $30,000. $30,000 divided by four weeks. There are four weeks in a month.
[00:26:32] That's about $7,500 a week that you can spend on your payroll in $100,000. Restaurant. A restaurant generates 100k in revenue every month. That's rough back of the napkin math, but that's where we begin. And then of course, you break it down further to understand what's your salary. Split to back a house hourly to front of house hourly. And then of course, when you look at cogs, what part of that is food and liquor and wine and beer and kitchen supplies. And where does all of that factor in?
[00:27:01] You first have to learn how to forecast successfully.
[00:27:05] Then you use those forecasts to generate budgets.
[00:27:09] Those budgets have to be adhered to. That's how you stay profitable. Help your team get organized with, again, how they look at past P and ls, what the system is they use to generate forecasts, what the system is they use to generate budgets for all the departments, and how they manage that every single month. Again, this is one of the key things we do in my P3 mastermind. You don't have to do it my way. You can do it your way. All I care is that you do it.
[00:27:36] You have to do it. So help them get organized. Give them a systematic way for looking at this, reviewing it, measuring it in real time so that they can be more proactive. That's something we're going to talk about more in just a few minutes. But you need proactive managers. It's not something we don't do enough when we're talking about independent operators. Some of the chains do really well, but it's not something we do. And that's what I want us to get better at doing. So again, number one, this idea of educate and empower your team, bring transparency to the table, and then give them the tools they need to manage. Number two is about helping them get organized, putting systems in place so that they can do the things you need them to do to generate the kind of profit that you need your business to generate. Number three, I want you to give your managers figure eights that they have to adhere to them and then help them figure out how to create figure eights for every different role in the restaurant. Now, some of you may be sitting here going, What's a figure 8? A figure 8 is a term that a lot of the chain restaurants will use. So if there are independents listening to this, and you have never heard this term, you're not alone. I didn't. I first came across this maybe 10 or 11 years ago, but I spent a long time in this industry before I heard of what a figure 8 is. A figure 8 is a set of tasks that you give someone so that they can succeed in their role. Perfect example I always give is the bussers, right? So when I would train bussers, right? To train bussers. Bussers are typically. Especially in fine dining. I spent a lot of time in fine dining. Bussers are usually the most green.
[00:29:10] Most green employees we have.
[00:29:13] They're sort of. It's an entry level Position.
[00:29:15] And how do I teach them? How do I teach people who have probably never dined at this level how to serve at this level? I learned this from a colleague of mine, a mentor of mine, who said, this is what you do. You teach them, bread, water, clear, reset, help.
[00:29:30] Bread, water, clear, reset, help. Those five things, and you have them repeat those five things in their head over and over and over. So if they look at their station and their station is maybe four or five or six tables, especially in fine dining, the sections aren't huge. And they say, okay, does everyone have bread?
[00:29:48] Okay, does everyone have water? If anybody needs water, go. Top off water, right? Anybody needs bread, go get them bread. Or clear the bread basket, or clear the bread plates, whatever the proper service is. But you tell them, look around your station. Does anyone need bread? Now look around your station, see if anybody needs water.
[00:30:05] Next, see if you can clear anything. Dead glassware, dirty, you know, dirty straw, you know, a straw pack, a sugar packet, you know, an empty straw that's not being used anymore, or if a table needs to be cleared for their next course.
[00:30:20] So bread, water, clear, reset is the next one, right? Is there anything. Is there a table I can reset to be seated again?
[00:30:32] Is there any table that needs to be marked for their next course?
[00:30:35] Right? So bread, water, clear, reset, and then help.
[00:30:39] If all of the first four duties are done and nothing else needs to be done in the section, the assumption is that somebody else will need help. So bread, water, clear, reset. Then go see if anybody needs help. Bread, water, clear, reset. Go see if somebody else needs help. Go to the service bar, go to the front desk, go to the kitchen, go to the barista station. There's always someone to help.
[00:31:00] Bread, water, clear, reset, help. And the guy who taught me this, taught me a lot about culture, and he said, here's the thing. We spend a lot of time at meetings saying, hey, you know, listen, I want to see good teamwork out there. You know, let's have a good shift and make sure to work together. All right, Guys, have a good shift. And they clap and the huddle's done.
[00:31:17] And he said, that's not how culture is created. That's not how teamwork happens. Teamwork happens when we make it a key part of their job. And in this case, he said to me, we've now made a 20% of their job.
[00:31:30] Bread, water, clear, reset, help.
[00:31:33] One fifth of their night is spent seeing if somebody else needs help, being helpful to somebody else. And that means everybody on the busing staff is doing the same Thing.
[00:31:42] That's an example of a figure 8. I give them the 5 things they should be doing, and nowhere in there does it say, bread, water, clear, reset, help, go get a sip of coffee. Bread, water, clear, reset, help, go check Instagram. Nowhere in there. So people will never be out of position because they'll always have to be somewhere in their figure eights. Again, a figure 8 is infinite. It just loops back and forth and back and forth.
[00:32:07] That's the idea. You do that for hosts, you do that for bartenders, servers, your expo, your food runners, your line cooks, everybody. And it begins with your managers. Your managers should have their own figure eight. A manager's figure eight should be about 15 to 20 minutes long, right? Then over the course of 20 minutes, they start at the front door, right? Check the outside, check the front door, check in with the podium. Is there anything they need or how are reservations coming? Is there anybody waiting for tables? Is there anybody I can chat with at the bar? Is there anyone I can show to a table?
[00:32:39] Right, so the front door, the podium, maybe the bar, maybe. Check in with every station on the floor and then go check back with the kitchen.
[00:32:49] Front door, front podium, bar, all the stations on the floor, the kitchen, front door, front podium, bar, all the stations on the floor, the kitchen, you do that. It will take you about 20 minutes to do that last.
[00:33:02] And you should be doing those laps over and over and over. I would give figure eights to the hostesses, right? Windex the front, go gather menus, go check on, give me status updates for tables, go check on the bathrooms, go Whatever it is. You give them a series of tasks, and this way you've told them exactly what they should be doing and how to succeed in their job. You've also laid out their expectations, right? Your expectations for them. Nowhere in there does it say, windex the front door, collect menus, give me status updates, go check your phone. Nowhere. So a host should never be on their phone because they always have something else to do. There's something else they should be doing at every minute of every day.
[00:33:44] That's how Figure 8 works. What you're going to do is make sure your managers are doing their figure eights, and you're going to hold them accountable and help them build figure 8s for all of your staff.
[00:33:55] This is how you make sure that every person in every department at every point in the day, at every part of the floor is doing what you need them to do. And it's a great way to have them check in. They always know what they're supposed to be doing rather than the managers trying to be, you know, superheroes doing everything they shouldn't their job. This is how to give focus to that oversight piece of their job. So again, what we're doing here is we're trying to minimize that oversight piece and let them do that more efficiently so that they can more effectively manage the restaurant and manage it for profitability.
[00:34:28] So those are the first three things. Number four, put a clear focus on revenue, specifically on increasing guest check average. It's no secret I didn't make this up. The data is clear. The number one way to increase revenue in your restaurant is to increase the guest check average, the per head that each, that each guest generates, right? So, yes, you want to get more people in the front door, but the number one way is to get the people you already have to spend more money, right? To have a better time. So if you put the managers focused on that, they're going to start measuring for the baseline. Right? Well, where are we now? What's the check average now? It's $52. Can we get it to 55 or $57? You run the math.
[00:35:15] When you look at, if you do 200 covers a night on a busy Saturday night and your guest check average is $55 a head, if you found a way to raise that to $60, you do the math. And see, just on 52 Saturdays, 200 covers times $5 over the course of the entire year ends up being a huge, huge number right there. We've added $50,000 to our top line.
[00:35:41] Now, that's just focusing on one night of the week. What if you worked on all seven nights of the week, right. And made sure that every cover spent more than they're spending now? There's a bunch of ways to do this. It begins, though, by making sure the managers understand that this will affect your business positively and more impactfully than just about anything else they can be doing. Yes, you're going to have them forecast, you're going to have them build proper budgets. You're going to have them manage for revenue, manage the expenses, right? You are going to help set them up with the tools, hold them accountable. You can have them build figure 8 so that their oversight doesn't take so long.
[00:36:21] And then here, one of the biggest things you can do is help them generate more revenue. The number one way is to increase the guest check average that the per head spend in your restaurant. You can do this by focusing on second beverage sales. That is widely understood to be the number one Way to do this. So second, beverage sales or focusing on getting other items on the table. Right? An additional appetizer, a mid course, a side dish, dessert after dinner, drinks, coffees, always. There's always something to do. Even selling merchandise, right. If you're the kind of place that sells T shirts and hats or cookbooks, just getting a cookbook on every table or every fifth table will make a huge impact in the bottom line.
[00:37:04] So by increasing the guest check average, you will do this. And so get them to see this, get them working on the best ways to make it happen. And then get them to work with your team, the staff, the bartenders, the servers, the hosts, so that they can sell more to every single guest. And again, understand this isn't about, you know, serving people stuff they didn't want, but it's about making sure that you anticipate their needs. And we're guiding them through the experience the way that they should be guided through.
[00:37:32] It's one of the best things you can do. So those are the top four, the fifth one, this is really, really crucial. You've got to meet with your management team once a week. I know one of, I know you guys probably do this, but you've got to bring intention to those meetings. Talk about the numbers and talk about what our goals are and what actions we're taking to hit our goals. Rather than just getting together and bitch, rather than getting together and just sort of talking shop or talking about what happened or what's going to happen.
[00:38:00] Focus on the numbers. What were our projections for last week? Did we hit those projections? What was our per head average?
[00:38:08] What are we doing to increase that? What are our revenue goals? What are our other goals that we're doing and what are we doing to try to achieve that? Again, I talk about this a lot, but this idea of systems and goals, proper goal setting and then putting a system in place to hit that, a system is just a repeatable set of actions. Get your managers thinking like this so that they are actively problem solving and working to move the needle in your business.
[00:38:32] So meet with the entire management team once a week and bring focus to those meetings. And then meet with each manager individually every quarter. You want to track their progress and keep an open dialogue with them about, and this is really important about how their professional life is or can help to support their personal life. This is the last point I'm going to make.
[00:38:54] Understand that our professional lives, the work we do, we do to support our personal lives. That's true for everyone who works for you. That's true for you. That is true for me. Right. If we didn't need money, if we were just independently wealthy, had a, you know, $100 million in the bank, I think a bunch of people would probably just tour the world. Bunch of people would just go golf all the time. Bunch of people would just go sit on a beach. A bunch of people. You do what to do, but we have to work. We have to work to make money, to pay for the things in our lives. And so what we're trying to do is bring more purpose and intention to our work lives.
[00:39:31] But we have to understand that people's work lives, their professional lives, exists to support their personal life. And the way that you keep staff, the way that you keep them motivated is by making sure that there's alignment always.
[00:39:46] If you meet quarterly with your managers and understand where they are with their job, what they're liking, what they're not liking, what they're, what's going on in their lives, how their professional life is going to need to change or evolve in order to support their evolving and changing personal life.
[00:40:02] That's how you create even better managers, really loyal managers. Because why would they go anywhere else if they're getting everything they need right here with you?
[00:40:11] So it's really important when we talk about creating better managers, that's the blueprint for doing it. You do those five things and your restaurant will change overnight. Next month this time, if you do these five things, you'll have a whole different restaurant on your hands. Now listen, if you need help with any of that, if you have any questions, email me. I answer each and every email I get. I promise. Ask anyone who's done it. I respond to dozens of emails every single week. If you want to set up a call with me to talk about what we do in the P3 mastermind, please do that restaurant strategy podcast schedule. It's a 30 minute call, it's totally free. You'll get to ask questions, I'll get to learn more about your business. We'll see if you're a good fit. If not, it's totally fine. Hopefully you will come away from that meeting with some key information, ways, tools that you can apply to your business. And if you decide to work with us, wait till you see what happens when you put all of this into practice. We've put dozens and dozens of people through this program already over the last of years, couple two years. I appreciate you being here, as I appreciate it every single week. All the best to you. And I will see you next time.
[00:41:34] Sam sa.
