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There are many challenges to face when managing a restaurant.
There are high staff turnovers, high food and operating costs, and an average profit margin of just 3-5% to contend with.
Add in the fact that the industry was turned inside-out by the 2020 pandemic closures and the slow recovery process, and many establishments may be facing a recipe for disaster.
So how do successful restaurants manage to beat these odds?
The secret sauce is good management
Learning how to coordinate the day-to-day operations of your business with strategic thinking to boost growth can get customers in the door and profits in your account.
Restaurant management involves handling your business’ reputation, managing finances, organizing staff, taking care of marketing, serving up an amazing experience for diners, and more.
But learning how to manage a restaurant shouldn’t feel like juggling too many plates in the air. We’ve talked to highly successful restaurateurs to learn their recipes for success.
Learn How to Manage a Restaurant With a Hands-on Approach
If you own a restaurant, managing it is hard if you fully don’t understand every part of your company. Get involved and try out every role in your business.
Take a turn in the kitchen, at the dishwashing station, and as a server. Spending a day or two in each position will help you identify any bottlenecks or inefficiencies. Maybe you’ll notice that the system of communicating orders to the kitchen is slow. Or maybe you’ll find that dishwashers have to walk too far with heavy dishes, and this is causing broken plates and losses.
Once you know the problems, you can fix them.
There are other benefits too. By taking part in every role, you build camaraderie with your staff.
You get a chance to talk to your employees and get their perspectives on anything that could be improved.
Get proactive about finding and retaining staff
Restaurant management is people management.
Brian Nagele, former restaurant owner and current CEO of Restaurant Clicks—a digital marketing agency in the Food and Beverage industry—believes that restaurant workers are the backbone of any establishment.
As he puts it, “Customers come and go, but your employees are the people who show up for your business every single day.”
The problem is that it’s hard to retain restaurant workers. The turnover rate of staff is 75% in the restaurant industry, compared to 46% in the public sector. So a big part of learning how to manage a restaurant is learning how to hire the right people—and keep them!
Hire staff for their eagerness to learn
This is a tip from Kelsey Stief, the owner of Fort 88. At their gastropub in Ohio, they have a specific standard for hiring: “For the kitchen staff, Chef Charley focuses on hiring someone who is teachable with a positive attitude over someone with years of experience.”
The gastropub looks for “people who think of their job as a career versus someone who considers it a transient position.” Staff with an eagerness to learn and a desire to stay can become part of your team long-term, and they may be easier to train.
Create a people-first environment
If you’re taking the time to hire the best you want employees to stay—and that means creating a great workplace. At Fort 88, the staff work to make sure employees are treated right.
They offer health insurance and pay above the minimum wage. They also split tips to encourage an environment where everyone is incentivized to help each other.
As a result, the gastropub has a high retention rate and they’re able to deliver a great customer experience.
Offer your staff flexibility
“Most US restaurant workers are part-time employees and may have another job they are supplementing, they may be students, or they may simply enjoy the flexibility of making their money in the early morning, late night, or weekend hours when restaurants are busiest,” says Brian Nagele.
“In your kitchen, you may also have career-minded cooks that are focused on moving up the line, which frequently involves moving on to new jobs,” he adds.
Offering open shifts that anyone can claim can help you stay flexible for your employees. You’ll also want to keep talking to your staff, so you know their plans and goals.
That way, you can adjust their schedule so they can keep working for you while also meeting their other obligations.
Train your staff
Poor training means staff can’t deliver the exceptional service diners want. Chris Bidmead—a 16-year veteran in the hospitality industry—has owned Bar Methods for the past seven years. Bar Methods helps bars and restaurants implement systems and train staff.
Chris laments the lack of training he sees: “Too often these days, I have found that places are losing points on service because they don’t have the time to work with their staff to develop the skills they need for success.”
The good news is that it’s easier than ever before to train staff online, with self-paced training that you can create once and which your staff can access any time.
Coach your staff
Coaching goes a step above training and helps your staff learn the nuances of the job. Coaching helps workers take the skills they have learned in training and truly deliver an excellent experience.
Allen Bixby, who has owned and operated several restaurants—including a business he recently sold after nine years of ownership–sums it up as “modeling good behavior.”
According to Allen, “‘Do as I say, not as I do,’ is a guarantee of failure.” If senior staff members don’t treat employees with respect, those employees will show disrespect to their peers.
Allen finds that an “expectation of common courtesy—always say please, always say thank you—was a huge first step to smoother production and service.”
In addition to modeling the right behavior for staff, you can have new employees job shadow more experienced workers, or you can create mentorship programs for staff who are eager to develop their skills.
Share your ideas for your restaurant and give workers a chance to weigh in. Name a few dishes after staff members. Make them feel part of the team.
Brian Nagele believes in sharing information about expenses, overhead, and revenues, too: “In my experience, opening the books to hourly staff has always led to a more engaged team that is invested in the restaurant’s success. It makes sense as your restaurant is their livelihood too.”
Find a mentor
A mentor in the industry can help you learn best practices and can keep you on track. They’re a sounding board for ideas and challenges.
Someone who has learned how to manage a restaurant successfully also offers an external perspective. This helps you re-think challenges and opportunities.
According to Chris Bidmead of Bar Methods, “Everything from orders, 86ed items, scheduling, updates, and issues deserves a proper system to get the information from one person to another. Good communication structures avoid silly mistakes, save steps in service, promote the business, and lead to a generally less stressful environment.”
So how do you build a good communication system?
- Have one place to capture all important information. Don’t rely on memory. As Chris explains, “I can list a thousand things I’ve been told during service as a manager in a single day, and the likelihood of me remembering to address all of them when I have the time is impossible.”
Connecteam is an all-in-one food and beverage app that has multiple communication tools and helps you schedule shifts, create checklists, onboard new workers, train new staff, and more. Designed for the food and beverage industry, it has everything you need to manage a restaurant. Visit Connecteam for a free trial today!
- Have check-ins or team meetings. Weekly meetings or daily huddles give staff a chance to speak up if they need something. They also help you to evaluate how work is going. Even a few minutes together can allow you to review any changes or information—like new menu items—your staff needs to know about.
- Check-in with staff so you learn about any hidden issues. This can be done individually or in group huddles and meetings. Sometimes staff are more comfortable sharing issues one-on-one so it’s important to provide the opportunity for both types of check-ins.
- Create an open-door policy. Make it easy for workers to get in touch through chat, email, or through in-person meetings. Tell your staff you’re always available and respond to any questions quickly.
Invest in tech that makes restaurant management easier
New tech is being developed all the time to make managing a restaurant easier for owners. Here are the apps and tools you will want to invest in.
- Scheduling apps to help create staff rotas and keep track of who is working when.
- Tableside tablets to let diners order extra drinks, call for the check, or ask servers a question without having to flag anyone down.
- Inventory management software to track what you have in stock, so you can adjust your menu or reorder key ingredients.
- Reservation software and apps to make it easy for diners to book a table without them having to call your restaurant.
- Training apps for your staff.
- Point of sale software that accepts different payment methods and even lets you serve up dishes at pop-up restaurants, farmer’s markets, or food events.
Make health a priority
Restaurant work is exciting and rewarding, but the hectic pace of work on busy nights, coupled with long hours and high stress, can impact managers and staff.
Taking care of physical health
Long hours and the physical demands of restaurant work can cause back problems, strains, high blood pressure, and more. Here’s how to tackle physical health.
- Take time off
- Hire enough staff to prevent overwork
- Create a wellness program at work with incentives like smoking cessation programs, exercise challenges, yoga instruction, wellness assessments, and other initiatives to help staff take care of their health
- Introduce health and safety measures such as anti-fatigue mats at workstations, first-aid training, non-slip flooring, and bright lighting
Taking care of mental health
19.1% of accommodations and food services industry workers reported using illicit drugs in the past month, and 16.9% reported substance use disorders in the past year. These are the highest rates among all industries. There has also been a spotlight on suicide in the industry after the deaths of several famous restaurateurs.
Here’s how to help workers with mental health challenges at your restaurant.
- Enforce breaks to encourage workers to take a mental and physical rest from work
- Build community by having meals together or spending social time as a team
- Offer resources, including health coverage and a list of places staff can seek help if they need it
- Keep an eye out for signs of stress and upset and offer added support to staff individually if they need it
Brian Nagele puts it simply: “It doesn’t matter how good your food and service are if nobody knows about it.”
Knowing how to help diners find your restaurant is important for any manager. According to Brian, there are four key elements to marketing success for restaurants.
- Building a brand. What experience do you want customers to have? Once you have defined what your brand stands for, make sure every part of your restaurant reflects that narrative.
- Having a good-looking menu: A well-designed menu not only showcases your food offerings but also serves as an extension of your brand’s story and aesthetic. A visually appealing, easy-to-read menu can enhance the dining experience, making it memorable and shareable. This can lead to increased customer engagement and loyalty.
- Bringing more customers in the door. Market where your customers are—whether that’s online or browsing high-end magazines. Offer a reason for people to reserve a table by creating exciting menus and special offers.
- Encouraging loyalty. Do return customers get a special table, a meal “only for our best customers,” or a “secret menu?” Find ways to say “thank you” to those who support your business.
- Maximizing spending by diners. What can you do to give customers more ways to experience your restaurant? Can you offer a cookbook, cooking classes, or a private dining room? Where can you offer value and encourage customers to spend a little more?
Be prepared for challenges
Managing a restaurant isn’t always going to be smooth sailing. Here’s how to prepare for the most common issues you’re likely to face.
- Slowdowns. Keep records so you know when slower times happen. Are you always empty on Mondays? Maybe it makes sense to close on days that you know are your slowest—this also means everyone can rest, and you can save on overheads. If some seasons are slower, consider a new menu item, an outdoor stand, or another offering to entice customers.
- Short staffing. Have a plan A and plan B in case your usual team members can’t come in. Offer flexible scheduling and know who may be able to come in at short notice. Alternatively, be ready to roll up your sleeves to pitch in yourself!
- Burnout. Brian Nagele says that “In a restaurant—especially a successful one—it is not a question of if, but when burnout will hit. When you are burnt out, you become irritable, short-tempered, cynical, and apathetic. When you start to see—or feel—the signs of burnout, give your team—or yourself—a break.”
His solution? “Step away from the restaurant, even if you can only afford to do it for a few minutes. Breathe some fresh air and drink a whole glass of water. Schedule some time off if possible. Close the restaurant for a shift or a whole day if you can, to give your team a break. And if under the influence of burnout you snapped at someone or made a mistake, take the time to apologize or otherwise make it right.”
Manage customer experiences
How well diners enjoy their experience with you has a big impact on your bottom line.
According to a Harvard Business School study, when a restaurant increases its Yelp rating by just one star, it can see a 5-9% increase in revenues. About 60% of diners look at reviews before going to a restaurant—with 25% relying more on social reviews online than on professional food critics. In the past, wooing critics mattered. Today, it’s impressing diners.
So what does impress? Restaurateur Allen Bixby is adamant that restaurant success hinges on diners’ experience. According to him, it starts with your approach: “Develop the mindset that these people are guests in your home, certainly in your establishment. Treat them accordingly.”
Maria C. Palmer—Author of On the Rocks—and Joseph Costanzo, Jr.—former owner and operator of the Primadonna Restaurant—have some tips for creating exceptional customer service.
Maria and Joseph say it’s important to “Stop and acknowledge people.” Customers should never feel rushed or like your staff is too busy for their needs.
Make it right if there’s an issue
Not everything will go smoothly. If there’s a wait for a table, Maria and Joseph recommend being transparent about how long the wait will be. For that issue and any other problem, they point out that “Sometimes it’s as simple as comping a dish on someone’s check to make things right.”
Treat everyone like a VIP
Maria and Joseph recount sending out special appetizers to tables to make diners feel special. Everyone was treated like a celebrity, whether they were or not: “One time Rick Sutcliffe, who was a Cy Young Award winner for the best pitcher in the MLB at the time, came in and was having dinner at the bar. We didn’t recognize him right away, but we gave him top-quality service and as the night went on, we did recognize him. He thanked us for the excellent service going above and beyond for him thinking that we were offering him the red carpet service for who he was. Little did he know that we treated all of our customers with this high level of service.”
Keep track of customers
Use customer relationship management software or online files to keep notes on returning customers and their favorite dishes and drinks. Note down when their birthdays and anniversaries are if they share that with your staff. According to Maria and Joseph, it’s important to “remember names, faces and small facts about people. This helps to build a relationship with people who come through your door and it keeps people coming back.”
Know when to turn up the service
Maria and Joseph suggest you “Ask people if they are celebrating something special.” A free cake, singing happy birthday, or working with a couple to make their proposal at your restaurant extra-special makes your service stand out.
Serving Up Restaurant Success
Managing a restaurant means staying one step ahead, which is a challenge in an industry that’s always changing. Fortunately, successful managers have already field-tested the best ways to market, impress customers, keep staff, and tackle the many details of running a hospitality business. With these tips, you can keep your restaurant thriving so you can share your passion for incredible food.