How To Manage A Restaurant Business Successfully – But let’s take a step back and look at the fundamental purpose of RRM and the responsibilities of the stakeholders in the RRM process, to break it down into bite-sized pieces for easy digestion. The main goals of RRM are to increase turnover, sales, profit and guest satisfaction, as well as the restaurant’s reputation.
RRM involves different departments and breaks down traditional silos to achieve these goals. With a structured approach and a well-managed process, each department will have different responsibilities.
How To Manage A Restaurant Business Successfully
As a first step, look at your restaurant’s performance through the specific key performance indicator (KPI) measurements you find most relevant. Many of these KPIs can be difficult to calculate yourself, but intuitive dashboards and reports that can be generated through and based on your POS data make the process painless and simple.
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If you are building a strategy to increase the profitability of your hotel restaurant, you need to understand your restaurant’s performance as it is. To get a clear picture of your bottom line performance, there are three Key Performance Indicators (KPIs) you should pay attention to:
RevPASH calculations allow you to decide when to sell more and when not, and whether your marketing and promotional efforts are effective. Seat occupancy analysis tells you when you need to attract more customers or when your demand exceeds seat supply. And, finally, comparing the combination of tables to the sizes of your party helps you make sure you have the right combination of table sizes so you don’t lose out on potential revenue.
This next step follows a best practice revenue management demand analysis. By identifying actionable steps that could improve performance, whether it’s traffic (coverage), sales (average check) or service (consistency in service, reputation and guest satisfaction), each of your departments will have better insight what responsibilities does he have in optimizing his business and increasing his income.
Understanding what draws people to your restaurant (and keeps them coming back) is key to increasing food and beverage profitability. You should divide your demand analysis into three basic categories:
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Comparing metrics like table mix to your group size helps you make sure you have the right mix of table sizes so you don’t lose out on potential revenue.
Finally, analyzing your restaurant’s guest experience allows you to determine the quality of service your restaurant provides. Two metrics you can use to measure guest experience are:
Measuring meal duration helps you monitor the quality of your service, while hourly spend calculations can help you fine-tune how your servers optimize their sales.
Tribes were created to visualize the buying behavior of your guests at a high level. Do your guests buy a set menu that you created yourself or the most common main course +1 (appetizer or dessert)? How does this affect revenues and profits? Which tribes contribute the largest average check and ultimately your restaurant’s profit and revenue? It’s all about validating your strategies or pinpointing what you need to focus on to achieve the results you envision.
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To get a complete picture of your traffic, sales and guest experience, measure your demand by the hour, by the day of the week and by the month. This will allow you to identify patterns and trends in your restaurant’s demand and help inform your profit strategy and goals.
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Running a restaurant has its ups and downs, many of which are beyond your control. We are all familiar with these challenges, but there is one challenge that is within your control and mastering it is critical to your success: managing people. Here I want to share with you my top three actions that management must do on how to successfully manage a restaurant business.
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Managing inventory, preparing food and drinks, creating an amazing atmosphere is easy compared to managing people. However, to be successful in the restaurant business, you must be able to successfully manage people who will help you on your way to a good restaurant operation.
You should always train people to do it your way, so that when the manager leaves, you have trained replacements. You don’t lose someone and wonder, oh my god, all this information is in their head, what do I do now? As long as you train your system, your process, your way, things will go your way when you’re there, but especially when you’re not. This is how restaurant chains often rip us off. They impose their will without being there through the systems.
Start documenting all your systems. There is no system too small or too big. Everything you do in your restaurant is done the way you want to do it, and that’s how everyone should do it.
It’s common to just show someone how to do something and pray they understand without going through the process of confirming they understand. The number one reason you lose people is because they don’t know what their job is, how to do it, how well it needs to be done, or by when. And it’s a top-down practice. No one can work in a restaurant if they are not properly trained. If you want people to successfully manage a restaurant, training must be your priority.
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Following STA – Systems, Training, Accountability – will change your life and your business. It sounds so simple on the surface, but it takes real work to implement. It requires you to become the leader your restaurant needs because I guarantee you, if you go down that road, there will be pushback. Knowing these three things about how to successfully manage a restaurant business can help you stay strong.
If you’re looking for support in learning how to do this well and become a leader in your business, I have a premium restaurant coaching program for independent restaurant owners. It’s a 24-week program that sets you up with systems, training, and accountability. Members who go through this program change their lives. Schedule an interview with me today so we can discuss your goals and your readiness to take on the program.
If you want to learn how to own a restaurant that doesn’t depend on you being in it to be successful, sign up for my free video course that teaches you three key principles for running a successful restaurant. If you’re ready to make some serious changes in your restaurant right away, you can also book a 60-minute chat with me where we’ll talk about your challenges and figure out exactly what’s holding you back from having a restaurant whose success doesn’t depend on you being in it.
If you’re ready to finally get the relief you need so you can stop living in your restaurant and finally have the life you’ve been working for – let’s get started.
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