I have been taking classes at George Brown to have a better understanding of the industry. This semester I am taking HOSF 9113 also known as Food, Beverage and Labour Cost Control. In the next few blog entries I will try to outline some of the key concepts I have learnt in class.
Whether you are new to the restaurant business, or have been up and running for a while, one of the most important learning curves you will experience is making sure you manage your labor costs well. Getting this right is so important; you want to ensure quality of service by having enough staff to keep your restaurant running smoothly, but if you are overstaffed, you will simply be throwing away money for nothing.
As well as food and drinks, labor is one of the highest ongoing costs you will have while running your restaurant. It is important to find highly qualified, highly experienced staff, with excellent references who you know you can trust from the outset. However, it can be tricky to find competent, hard working employees who are willing to work for less, and you need to find a balance where you keep within your labor budget, but don’t cut back on the numbers or quality of your staff. If you do you won’t be able to offer your customers the excellent, personalized service that will keep them returning to your restaurant time and time again.
So how do you successfully manage your costs while still getting what you need from your staff?
Firstly it is important to understand exactly what you have influence over and what you cannot change. Wages, shift patterns, and uniforms are all decisions made by you, and therefore opportunities to cut costs and save. Taxes and insurance costs are not, remember this and factor these costs into your labor budget. Don’t spend time trying to find loopholes and cuts where there aren’t any, simply focus on what you know you can control, and figure out the most effective way to manage these costs in a way that is best for your business.
When you first start out it is difficult to know exactly how many staff you will need, and how many hours you need to employ them. You may have to make an estimate, and that’s fine, but once you have been open for a few months it may be time to re-evaluate. In fact however long you have had your restaurant open for, you should continue to monitor and evaluate schedules to ensure you have the right amount of cover. As your business continues to grow you will see patterns begin to form, your peak times may need all hands on deck, but during a slow, mid-week lunch, ask yourself how many servers do you really need? Reducing employee hours where you can is a hugely effective money saver. A good way to start is by dividing your staff into groups, servers, cooks, managers etc. Work out which group is costing the most and ask yourself whether all these positions are necessary? Where could you make some changes without compromising the effective running of your restaurant?
It is also important to note that if you employ the majority of your staff full-time, you will be required to offer them several benefits which will inevitably cost you money. Part-time employees won’t require the same benefits therefore you can make savings here. It is usual to have a mix of full-time and part-time staff in restaurants, but with careful costing, you will be able to find the most economical balance that works for your restaurant.
We have mentioned the importance of finding great quality staff to help you run your restaurant successfully. A high quality staff member will not only be experienced, friendly and professional, they will also be highly productive too. There are several ways you can boost your employees productivity, and ensure you get the most out of them. Staff who feel valued in an organisation and proud to work there are far more likely to be productive members of your team. Invest in good training for new starters, from the chefs to the cleaners. Everyone needs to understand how their role plays an essential part in keeping your business running. Hold staff meetings regularly to brief on any changes to restaurant policy or menu items, offer learning opportunities and career development opportunities, and most importantly, let your staff know you truly appreciate their work.
Investing in proper equipment will boost productivity too. While the initial outgoing costs may be higher, if you invest in proper equipment, and ensure your kitchen and restaurant are fully stocked this will save time and money in the long run. Look for kitchen appliances that run effectively, saving energy and therefore lowering your bills. Designing your restaurant with thought can also improve productivity. Think carefully about the layout and how your staff will move around the room, make space for them to get to tables quickly, and to come in and out of the kitchen with ease. Clever planning will ensure a smooth workflow meaning cooks can produce meals without getting in each others way, and servers can move around the restaurant effortlessly.
Careful monitoring of your labor costs can really save you huge amounts of money. Having the correct number of happy, productive, high quality employees will ensure that your restaurant runs smoothly, and will have a direct effect on the success of your business.