http://www.blueorbiting.com Here are the Top 10 Restaurant Killers from Blue Orbit Restaurant Advisors! Blue Orbit has helped thousands of restaurants to increase profits, improve management, and improve overall quality.

2. There are plenty of things that cause
restaurants to struggle including poor
location, the wrong food for the wrong area,
bad lighting, uncomfortable seats, smelly
beer-soaked floors, difficult parking, or even
embezzlement. to name a few. Our list
below, however, focuses on things that are
not so obvious that we know to be critical to
a restaurant’s success… and we see them
over and over.

3. Toyota knows the price of a Camry down to the plastic
dashboard “blank” that covers the electronic feature you didn’t
opt for. Stouffer’s knows the exact price of that frozen lasagna in
your grocer’s freezer section down to the grain of garlic powder.
You need to know what each item on your menu costs…then you
need to update those costs to reflect ever-changing ingredient
prices (a 25 cent tomato today is not guaranteed to be 25 cents
tomorrow). If recipe costs blow the target Margin (“Margin” and
“Cost of Goods” are two sides of the same coin… Cost of Goods
= Item Cost ÷ Item Sales Price… Margin = Item Gross Profit ÷
Item Sales Price) then no you will never deliver your targeted
profit no matter how much you beat your chef or how high your
sales volume is. A menu must be “engineered” to deliver profit.

4. This is the relationship between item sales and item cost – or cost without waste
or shrink. If your Short Ribs cost you $7 per plate (includes veggies, butter,
etc…NOT labor) and you sell it for $21 then your food cost for that item is 33%.
If your Corvina dish costs $4 per plate and you sell it for $19 then its food cost is
21.1%. Knowing this, what is your blended theoretical food cost for selling both
Corvina and Short Ribs? 27.5%? NO….because you have not considered your
“product mix” or how many of each item you sold and its impact on overall food
cost. If you sell 20 Corvina and 2 Short Ribs then your theoretical cost is 24.7%.
If you sell 20 short ribs and 2 Corvina then your theoretical cost is 32.3%... big
difference. You don’t necessarily need to get rid of the Short Rib as much as you
need to steer people toward the Corvina, luring the guy with the wallet.

5. If you use Niman Ranch pork loins (a quality meat purveyor that delivers
humanely produced, hormone free, sustainable products) and your menu
doesn’t say so, then your customers don’t know that you’re committed to
using superior quality vendors. If you squeeze your own juices for your bar or
you use “big ice” in your drinks…
but you fail to tell your customers
about it (through either print or
service voice) then you’re missing
an opportunity to draw customers
who make decisions based on quality
(ahem…a lot of people like quality).

6. Forecasting sales is critical for determining
how much you should spend on your
ingredients to drive a certain sales volume
and how much labor you should have.

7. When managers fail to program their labor to suit business
volume they are not programming their labor through templates.
The two highest cost lines on a restaurant’s income statement are
Cost of Goods and Labor. Labor should be planned to deliver
targeted labor cost for targeted sales volume.

8. When schedule writers write
schedules that don’t stick to the right
labor template and they don’t
manage labor overages by adjusting
in-times to match scheduled in-times,
then labor drifts quickly out of
control. Labor will bleed you dry. If
the plan is not right, then fix the plan
but stick to the plan once you set it
and all parties agree that the business
can operate optimally at the
prescribed level.

9. Managers must communicate with each other or
support each other as a united front through shift
change, log books, and pre-shift “game
planning”. Chefs and Service Managers should
collaborate every shift to establish areas of
responsibility and strategies for handling the day’s
challenges. When managers try to be “the staff’s
favorite” or when they allow the staff to play one
manager against another, then there is dysfunction.

10. When employees receive important direction through impromptu
sessions delivered while walking by an employee in a public space
(we call this “drive by” management). When managers don’t make
their direction important by planning their coaching session with
employees, it sends several messages: the direction is not that
important; the manager is unorganized; and the manager does not
respect the employee enough to make sure that both parties have
each other’s undivided attention. Resisting the temptation to blurt
out direction through unscheduled discussions reduces “buy in”,
commitment, and ultimately results. Whenever an employee
knows what they are supposed to do and when they are supposed
to do it…and that you care…they are more likely to deliver the
desired results than if you are loose with your direction.

11. It is critical that managers protect their credibility and
retain their authority to direct the staff in order to drive
initiatives and execute business strategies. While it is
good for managers and employees to like each other, it
becomes very difficult for managers to discipline
employees who violate the rules if the manager was
drunk at the bar with that same employee last night,
last week, or last year. Taking away the social
opportunities takes away the likelihood that your
managers will jeopardize their authority.

12. When a restaurant serves mediocre food, what’s the
message? Customers make dining decisions for many
reasons but the core requirement is that the food is good. In
theory, recipes are not released to the production line unless
someone decided it tasted good…but restaurateurs can get
sidetracked into “managing the urgent and not the
important” – forgoing regimented, daily food tastings to
ensure recipe adherence. Once the staff senses that great
tasting food is not important, they will struggle to uphold a
standard that is not supported by management and great
food turns mediocre.

13. If your coffee shop is on the
“commute home” side of the
street and you close at 4pm, or if
you decide to substitute canola
oil for the extra virgin olive oil
on the bread dipping plate, then
you have bigger problems. But
if you can’t quite put your finger
on your languishing profits and
you feel you have a good
concept, your problem might be
one or more of the ten.

14. www.BlueOrbiting.com
Ray Camillo, Principal

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