Fundamentals of Restaurant

Effective restaurant management is balancing many different groups and processes into a seamless operation. Food costs, inventory tracking, staff scheduling, food production, customer service and marketing are all part of restaurant management. Here’s a look at how to manage a restaurant in six steps, along with tips and advice from experienced restaurateurs.

Since managing a restaurant depends on tracking every aspect of your operation and linking it all to your bottom line, you really should consider using a restaurant point-of-sale (POS) system. Lightspeed Restaurant POS tracks ingredient inventory for meals sold, expedites orders between kitchen and servers, and provides a variety of detailed reports so you can closely monitor operations and costs.

Create a menu with food costs in mind

Good restaurant management begins with understanding the costs of the menu. Your restaurant menu plays a decisive role in communicating your brand to customers. The types of food you sell, their prices and even the way your menu is presented: every aspect affects your customers’ overall impression of your restaurant. Naturally, for many restaurants, menu management is the number one job.

Develop your standard menu

The first step in planning how to run a restaurant is to create a standard menu from a profit point of view. Ideally, the restaurant owner, manager and chef should develop this together. For startups, it’s really important that at least one of these decision makers has experience in food costs and preparation to ensure that the menu is profitable.

The restaurant management team should:

  • Decide on the types of food the restaurant will offer.
  • Create ingredient lists for each menu item.
  • Calculate average costs for each menu item
  • Create recipes and preparation processes for each menu item
  • Price menu items only after knowing the actual costs of ingredients and preparation times

Always be careful about the cost of operating your meals

The main reason why restaurants fail is that they do not look at the real costs over time, the costs of food in particular. Creating your menu with food costs in mind is the first step, but regularly checking the actual food costs over time is the only way to know what you’re really spending for food.

Reviewing actual food costs also helps restaurant management detect excess waste and even theft. If you know the average cost of the ingredients that are included in the meals, then you know how many meals you can prepare with your current inventory. If you run out of ingredients before you prepare the expected number of meals from available stock, you know you have a waste or theft problem. So be sure to track the costs of food in operation as part of your weekly or even daily restaurant management tasks.

Manage your inventory closely

Since food costs are the primary cost in any restaurant management plan, it is critical that you have a robust inventory management process to track food inventory down to the ingredient level. You always need to know what inventory ingredients you have on hand, how much it costs and how many meals you can prepare with it.

Small, limited menu operations can work with manual or spreadsheet-based ingredient specification sheets and master inventory lists, but larger establishments benefit greatly from the use of a restaurant-specific inventory management POS system such as Lightspeed Restaurant POS.

Create your operating procedures and training manuals

Planning how to run a restaurant begins with clear processes that define and guide the daily tasks involved in food production, customer service and facility maintenance.

Without processes and procedures, it is difficult to set expectations, train staff, and manage the overall process of food production and service. The customer service (FOH) processes that drive the activities of the cafeteria and bar staff are very different from the processes in the back kitchen (BOH) area, both are equally important.

Small operations, such as burgers and food trucks, may need only a few procedures that all staff adhere to, such as opening and closing procedures. Large establishments generally need procedures tailored to specific operational areas and functions such as food preparation stations, food storage, and service procedures.

Small or large, most restaurants can benefit from having them:

  • Opening and closing procedures: From turning on the lights when opening to turning off the grill at night, opening and closing procedures ensure that each step is handled correctly
  • Inventory verification procedures: regulate when and how often inventory counts
  • Food storage procedures: correct food storage rules and procedures are critical to the reputation and health inspection status of your restaurant
  • Food preparation, cooking and plating procedures: the kitchen is an assembly line and these procedures ensure that every meal on plates looks and tastes great
  • Bar storage procedures: good replenishment procedures help you store liquor correctly according to your permit, allowing you to serve drinks quickly and keep your customers happy
  • Service procedures: from greeting customers as they sit down to the way glasses are refilled and plates served, service procedures cover all aspects of waiters’ interaction with customers
  • Transport procedures: cleaning the tables quickly is a necessity and these procedures ensure that it is as discreet as possible
  • Cleaning procedures: from disinfecting the kitchen at the end of the day to cleaning the dining room throughout the day, good cleaning procedures keep your FOH space attractive and BOH safe for food production.

Train staff and manage schedules

Staff training and retention are among the main challenges facing most restaurant operations. Most restaurant positions are part-time at minimum wage. For many workers like students or night help, it’s just a stopgap job, not a career commitment.

Management problems such as poor scheduling, incomplete training, or favoritism often lead staff to resign unexpectedly, leaving management to fill the gaps. But effective training, combined with clear processes and efficient scheduling, can help you retain good employees.

Create a staff training program

No restaurant operation is too small for a training program. If you are not sure how to set one up, start with the procedures covered above and combine them into a staff training manual. Once you set up the procedures to cover the operational tasks in your operation, you can use these procedures as checklists to train your staff.

Also, consider letting the bright stars of your staff take on training responsibilities or at least allow new employees to follow or support your best employees. This frees up time for you and your managers and helps new staff enter the workflow more quickly. A simple training checklist like the one below can help guide the process, track your new employee’s progress, and ensure that all key training points are covered.

The baseline

A successful restaurant operation is made up of many moving parts and we have mentioned several key factors here: menus, costs, inventory, processes, personnel and growth. The main conclusion is that learning to manage a restaurant correctly begins with understanding its costs and observing every detail that affects them, such as inventory and process creation, training and staff management.

In micro-operations, things like sales, pricing, inventory and staff activity can be managed manually. But, to really prepare for growth, a POS system is an invaluable tool that gives you information and control over a variety of operational details such as ingredient level inventories, automated purchases, seat management, staff performance, and comprehensive business reports . If you’ve set the stage for growth, it’s time to see how a POS system can take you to the next level.