Restaurants Industry Articles

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Restaurants Industry Articles

Software and Hardware
Sales and Marketing
Customer Service
Staffing & Employment
Billing and Accounts Receivable
Vendor Relations and Purchasing
Restaurants Insurance
Restaurants Communication

Software & Hardware

At one time or another, many folks have thought about owning a restaurant. Whether dreaming of opening a tiny country kitchen or establishing a white tablecloth bistro, a number of entrepreneurs apparently like the idea of cashing in on culinary creations.

Currently there are more than 925,000 restaurant locations nationwide, making it clear that the food service industry is on fire.

According to the National Restaurant Association, restaurants accounted for 47.5% of annual food sales in 2006 alone, generating approximately $511 billion. They employ 12.5 million people, making the industry the largest employer outside of government. The industry as a whole raked in approximately $1.4 billion on a typical day this year, proving theres more feast than famine in the restaurant world.

Like every business owner, restaurateurs must ultimately make everything work to the bottom line. Without a solid management infrastructure, the eatery most likely will go up in smoke. Technology has played an important role in helping those in the industry stay organized.

In the past decade, software companies have released new programs and hardware designed to help restaurants become more automated. From point-of-sales (POS) systems and table-management software to wireless headsets and silent pagers, technology has become fundamental to the restaurant industry. In turn, the latest wave in state-of-the-art devices has changed the nature of even the smallest of mom and pop operations. In many cases, IT trends have translated to increased revenue as well as better customer service.

Most restaurants today use a centrally located, computerized point of sales POS system. These devices, which essentially look like a touch-screen, allow the server to place an order efficiently without ever leaving the dining room floor. POS systems often include features that update the restaurants accounting software with line-item sales info from that particular day.

The waiters and waitresses of yesteryear relied on a flimsy paper pad and pen to record orders. Once they finished writing up the customers selections, they usually had to type up the info into a printing system. They would then pass it onto the cooks. By the time this whole process took place, five or so minutes already passed.

Realizing the importance of time management, a number of restaurants now use Wireless Handheld Order Processing Systems to deliver meals to patrons more quickly. Wait staff members carry these PDA-like devices, entering the order right at the table. The system then breaks down the order and transmits the info via frequency waves to touch screens at the appropriate food and drink stations. When each food prep area finishes their part of the order, they press a complete button on their stations touch screen. When the entire order is ready, it appears on the server screen of the handheld processing system.

Pay-At-Table Devices are revolutionizing the way some restaurants close a tab. As where customers once stood in line to pay, or waited for the waitress to track down their check, this wireless technology now let patrons settle their bills quickly and efficiently. The wait staff accesses the tables entire ticket with a click of a button on the portable device.

Whether the patron uses credit, debit or cash, the pay-at-table terminal processes the information and prints out a receipt in front of the customer. Nonetheless, pay-at-table devices do much more than merely cut back on the amount of time it takes for a transaction. Since patrons using credit or debit enter the information themselves and never hand over their cards, these terminals greatly reduce the chance of identity theft.

Diners Eat Up Cyber Ordering
According to the National Restaurant Association, 31% of restaurant consumers used the Internet to view a menu in 2006. Realizing even Web surfers get hungry, a number of restaurateurs now strive to flag down this Internet traffic. Many do so through Online Ordering Systems. This software is designed to let customers view a restaurants menu and place an order via the Internet. The food order is then sent to the establishment as a fax or as a message to a specific computer touch-screen.

Many of the latest online ordering systems are easy to setup and maintain, often significantly boosting a restaurants profitable takeout business.

These ordering systems usually record reservations over the Internet as well. Aside from helping to eliminate double bookings, online reservation systems offer a number of benefits. For one, they let customers book a table when the restaurants not open, securing that patrons business rather than having them seek out an open establishment.

Many online reservation features automatically generate conformation and reminder emails to the guests. Some even allow customers to cancel a reservation or change the party number via the Web.

Hunger for Technology
Full service restaurants spend approximately 28% of their revenue on food costs, and limited-service operations spend about 32%. With such a large portion of income going toward edible supplies, its vital that restaurateurs properly oversee their perishables.

Inventory Control Software is designed to help track supplies and reduce duplicate purchases, over buying and food waste. Although these programs dont eliminate the need to take a weekly inventory, they can help control and curb losses. Most inventory software includes features that track vendor invoices and keeps a history of each transaction.

Some IT companies even sell Food Cost Software that recalculates the price of menu items and recipes based on cost increases of vendor ingredients. This software also conducts detailed expense reporting for supplies and services.

Sales & Marketing [top]

Methods for promoting a restaurant are as varied as the types of restaurants there are to promote. In any case, the main marketing objective is to attract new and returning customers.

Getting the Word Out
When marketing a restaurant, paid advertising obviously represents an effective tool. However, earned publicity also works to build an eaterys name. Through press coverage and positive food reviews, a restaurant most likely will enhance its credibility and community standing.

One way to gain such media coverage is through community service. Many restaurants hold charity drives, donating a portion of their earnings to a local cause. Others contribute food to fundraisers, provide prepared meals to shelters and food banks, encourage employees to partake in volunteer work and sponsor special events in the parking lot of the restaurant. Some of the most successful publicity campaigns take place over an extended period of time for maximum exposure. Sponsorship also presents a popular marketing technique used by restaurants. Many brand their services by providing promotional items like t-shirts, bumper stickers and other give-aways.

A Taste of the Business
Customers love to know what goes on beyond those large, swinging doors that lead to the kitchen. Offering a behind the scenes look not only educates the public, but just might boost business sales as well. Restaurant Tours are a popular way to draw curious diners.

Everything that occurs in a restaurant represents a potential walkthrough opportunity. From how decorators go about floral arrangements to food preparation, the intricacies of the operation can be used to sell the services.

The Daily Special
Sometimes something as simple as redesigning a menu can attract new customers. For this reason, there are a number of print and design companies devoted solely to menu creation. Studies show a good menu redesign can improve sales an average of 2% to 10%. Graphic firms specializing in restaurant menus usually offer a wide variety of looks, paper styles and binders. These companies use placement strategies, pictures and written descriptions to direct customers to order specific items.

Convenient Cuisine Equals Sales
As the time for home meal preparation continues to shrink, the restaurant industry has seen an upsurge in the purchase of or Takeout. A wide-ranging to-go menu helps attract time-pressed customers while freeing up dining room space and boosting the bottom line. In fact, some 44% of restaurant operators anticipate takeout orders will represent the largest portion of their 2006 sales, according to the National Restaurant Association.

Today, most restaurants treat takeout as an integral part of the operation rather than an afterthought. Many chains have even added a drive-through window where customers pick up orders on the fly. In other instances, restaurants are making room near the entrance of the building for convenient parking, often designated as the takeout spot.

Welcome Back
Traditionally,Frequent Diner Programs have been used as a marketing tool to stir up repeat business. While they might be a bit dated, they still work today.

Some restaurants issue designated cards for customers to record points, while other establishments merely use the patrons credit card to track the number of visits. Either way, these incentive programs build customer loyalty and keep folks coming back with friends.

A Virtual Feast
Dining Web Sites have come a long way in the past few years. Design companies present an array of packages aimed at making the restaurant site experience more interactive for the visitor. Some techniques include online comment cards, e-mail clubs, sections where consumers enter their personal food preferences, etc. A share of the latest restaurant Web sites also post calendars of promotional events, online gift certificate and card purchase options, employment applications and so forth.

Location is everything in the food business. However, getting folks to find that particular place is not always easy. Now instead of the customer calling for directions, certain sites link to navigational Web sources like MapQuest.

As many entrepreneurs will attest, strong business-to-client relations represent the best form of free marketing available. For this reason, a number of restaurateurs are including personal stories on their Web sites about their venture into the industry.

As an added perk for the visitor, many post links to other businesses in the hospitality and entertainment industry, like local movie theaters and hotels. Some restaurants even work with other local attractions to create online package deals such as dinner and a movie.

Along with entertainment value, todays restaurant sites also provide important logistics.

They allow potential patrons to view the dcor of the restaurant, the price range and hours of operation.

Customer Service

Selling great food represents only one part of the equation for prosperity in the restaurant market.

Above all, its a service industry. Quality service -- in many instances -- is what tends to set apart one eatery from the next. Simply put, the best cuisine in the world wont necessarily lead to returning customers if the service lacks. Only 14% of clients leave a business because of the product. On the other hand, 68% leave because of poor treatment by employees, according to Customer Focus Incorporated - a market research firm.

Customer Service Consultants provide training and strategic planning to make sure employees share the same goal to satisfy patrons. A number of service insiders teach that good customer relations dont merely take place tableside. Many times they actually start long before the patron ever arrives. When a customer calls for reservations, consultants focus on making sure the phone is answered promptly and courteously. These HR specialists work to help the eatery enact a system of checks to minimize mistakes and lost reservations. According to leading hospitality polls, customers rank personalized service top on their list of what makes an outstanding restaurant.

When the customer does arrive, consultants recommend the staff welcome him or her by name. Ms. Smith, your table is ready goes a long way in creating a memorable impression and hopefully a repeat patron.

Attention to detail is the key. Customers want value for the dollars spent, and service is a value-added item. Low-service quality companies average 1% ROS and lose 2% market share each year, according to Customer Focus Inc. In turn, high-service quality companies average 12% ROS and grow 6% each year.

A share of service consultants break down customer relations into three categories: courtesy, attentiveness and timeliness. While many restaurants feel they provide this, consultants help to truly gage quality. Customer Focus Inc. reports 80% of businesses believe they deliver a superior client experience, while only 8% of their clients agree.

For this reason, consultants tailor programs to clear up any disconnect between business and clientele.

Some of the simplest changes to enact involve server awareness. Most consultants teach restaurant staff to anticipate their customers needs such as refilling water glasses and removing empty plates without being asked. Going beyond good to great is a matter of degree and studying the patron carefully. If a server notes that the customer is left handed, a discreet change in cutlery placement tells that patron the server is paying attention.

Consultants also develop systems to help restaurants to better bond with their clientele. One common method is a birthday program that serves up a free dessert and card to repeat customers on their big day. Other establishments offer frequent dining bargains, which record points each time a customer visits. The patron receives a free meal after so many points.

Many Customer Service Training Firms offer DVD packages outlining techniques of the trade and tips for improved courtesy. These companies also tend to hold onsite workshops and online courses for restaurants with larger staffs.

Online Resources
For the restaurateur who might not have the time or money to recruit a customer relations trainer, the Internet hosts a variety of Web sites designed to help eateries improve services. Some post weekly tips for wait and bar staff that provide valuable insight on time management and organization. Other sites include online forums where industry professionals can exchange ideas and pointers. More importantly, these Web sites allow restaurant employees to learn from each others experiences. Many provide news articles about new methods for dealing with customers, the latest industry issues, and trends.

Staffing and Employment Issues

Statistics clearly show that theres no shortage in restaurant industry employees - nor will there be one any time soon. The National Restaurant Association predicts the industry will add approximately 1.9 million jobs by the year 2016. This increase in employment will top off the total number of people in the industry at around 14.4 million. Though impressive, this growth trend does not represent new ground for the restaurant world. Roughly 4 out of ten adults have worked in the industry at one point in their lives. Even more, 27% of adults got their first job experience in the food service field.

When dealing with staff members, theres never one true method. However, industry insiders feel posing the right questions to a prospect can increase the chance of hiring a reliable employee.

Key Questions for Interviewers
A written job description saves time and aids in determining if the applicant is qualified. It also outlines the businesss expectations up front, helping avoid first-day surprises for the new staff member.

Many employment specialists recommend the interviewer not only identify the job requirements, but also ask the applicant if they have any personal responsibilities that would conflict with those demands. The interviewer should always thoroughly explain the job description. They should find out if the applicant would be able to perform the essential functions with or without assistance.

Before the interview concludes, employment specialists suggest restaurateurs make the applicant show proof of eligibility to work in the U.S. and to complete the I-9 form. In addition, employers should ask if the applicant has ever been convicted of a criminal offense other than a minor traffic violation. This is particularly important if the available job requires handling money. If he or she answers yes, ask for a full explanation. Finally, ask if the applicant has reliable transportation to get to work.

Hiring the right person can help deter internal theft, which amounts to approximately $218 per employee annually. Internal theft can take many forms, including employees giving free food to friends, taking home restaurant items and stealing other employees' tips.

Safety First
Folks from all walks of life make up the restaurant industry. According to the National Restaurant Association, roughly 55% of employees are female, 54% of staff members are under 30 years of age and 78% live in a household with two or more wage earners.

Properly training and motivating these individuals is essential to every restaurants success.

Safety training covers everything from food preparation to alcohol distribution. Even the simplest of food safety concepts like portioning, hand washing, glove usage, equipment-cleaning techniques, thermometer usage, and determining correct food temperatures must be covered. The Center for Disease Control estimates approximately 76 million cases of food-borne disease occur each year in the U.S. Of this number, roughly 325,000 people are hospitalized and 5,000 die - all the more reason food safety training represents a top-priority at most restaurants.

When selecting a commercial program for training chefs and prep cooks, restaurant management should study all the options. There are many programs for crew level training and manager certification that are well worth the cost. Whether using a manual or actual teacher, food safety training tends to cover several basic areas: Illness bacteria, potentially hazardous foods, contamination, temperature control, preparation, presentation, spoilage, preservation, personal hygiene, delivery, storage, cleaning, sanitizing, and pests.

Employing Effective Training
Each area of a restaurants operation requires specific training needs. All employees can benefit from having a professional trainer who is prepared and knows the subject.

Nonetheless, should management decide to handle the task themselves, specialists suggest several approaches.

First, schedule sessions for slow times so that there are fewer distractions and pressures.

Second, use few words, but clearly explain in detail what is expected to accomplish the job. Develop a creative approach and involve the employee, providing examples and demonstrations as necessary. For instance, show dishwashers how to stack glasses and explain the importance of that method. Break information into small pieces and take frequent breaks. Supervise new employees through the practice period, but give them room. Most of all, catch them doing things right and give plenty of positive reinforcement. Praise often.

Trainers recommend management uses frequent evaluations to guide employee conduct and motivate positive actions. Set expectations early on and give them the performance review form so they know what is expected of them. The employee handbook should list performance standards so theyll know exactly how they will be evaluated and what it takes to be successful. Give frequent feedback.

Team Effort vs. Termination
Regular employee incentives are great motivators. Some establishments boost morale by selecting an employee of the month, offering small prizes like movie tickets. Other restaurants get staff more involved through employee suggestion boxes. This not only helps employees feel like and important a part of the operation, it can also provide valuable marketing ideas.

However, sometimes the best training and motivation wont prevent the termination of an employee. When this happens, specialists tell owners not to react, but enact. Remembering that all terminations should be viewed as a potential for liability, and even a possible lawsuit, employee policies should be clearly defined from the beginning. This will help prevent misunderstandings should a termination occur.

Make sure the employee handbook has an employment-at-will statement that notes the worker can terminate employment at any time or be terminated at any time. Management should carefully document evaluations and performance reviews to show that the employee understood the job expectations and failed to meet them. Take the time to follow procedures that are both legal and humane, and that protect the morale of the remaining workers.

Cleaning Up
As much change as the restaurant industry has experienced through the years, there still is more on the horizon. Trends in public eating habits, nutrition guidelines, and government regulations will ultimately define the businesss future. With every consumer dollar spent, an additional $2.34 in sales is generated for allied industries, making one thing perfectly clear -- The industry will continue to feed the economy.

Customer Service [top]

Selling great food represents only one part of the equation for prosperity in the restaurant market.

For this reason, consultants tailor programs to clear up any disconnect between business and clientele.

Staffing & Employment [top]

Statistics clearly show that there is no shortage in restaurant industry employees nor will there be any time soon. The Restaurant & Food Service industry will continue to add jobs without regard to economic trends. Roughly 4 out of ten adults have worked in the industry at one point in their lives and 27% of adults got their first job experience in the food service field. People eat out in good times and in bad and there is an imbedded affinity with restaurants and food service.

The type of employee that you need for your food service business depends on the type of business you have. What will be required in terms of skills, experience, polish and compensation will be completely different if you are a fast food operation versus a Four Star, white linen, up-scale French restaurant.

So let’s start at the basic food service level and work our way up. If you are a fast food establishment (also known as a “Quick Service Restaurant”) you are probably paying close to minimum wage for entry level-type people because your profit margins are thin and you wage a constant battle to maintain your profitability (especially with the seemingly every rising cost of the commodities you use as well as consumer demands for higher quality food). To avoid legal and benefit costs, you hire many part-time people, your turnover is noticeable in that it is rare that you keep people for a “long-time”, you have to do a lot of training, and your biggest challenges are to have people be at work on-time, every day and follow the prescribed and documented way of doing every operation in your establishment, who aren’t on drugs or stealing from you. So, who do you hire? Where do you find them? In all likelihood, the richest source of “good” people will be students who need a part-time schedule that is flexible; hiring people with disabilities which you can accommodate (they tend to be very reliable), and the state unemployment office. A basic interview, maybe a reference check or two, and then a probationary hire (30 to 90 work day probationary period, during which people who can’t learn, follow prescribed processes, have a “spotty” attendance record, etc., are terminated) is the best means you will have to get people. There are also some organizations based on special groups of people who are not fully advantaged who may work with you to find jobs for people/students who otherwise would not be given an opportunity to work part-time and earn some much needed income. Check with your local political, school and religious organizations to see if there are specialty groups that can be accessed as a source of employees.

The middle market foods service establishments (sit down meals, in-and-out in 60-90 minutes, no drive-up windows {although they may do take-out}, more than the 2-3 “seating’s” per shift at the “fancy/upscale” restaurants) will be markedly different from the Quick Service establishments in terms of level of people who are interested in working in this type of restaurant. Here, while minimum wage may be the hourly pay rate, there is an opportunity to earn tips from customers which can add-up to a reasonable income that is probably almost a “livable” wage in today’s economic lexicon of reality. Probably the best source of employees for these establishments are either referrals by current employees or “putting the word out” selectively that you have a need for servers, runners, bar tenders, chefs, etc. While not upscale food service, this is the first stepping stone for someone who is considering a career in the restaurant industry. Chef’s and food “preparers” can also be recruited from one of the many culinary schools through the country. Most restaurant/food service managers do interview people for positions, but the industry has learned that the “practical examination” of observing someone perform and then deciding very quickly if the newly hired person is acceptable is the best test of someone’s ability to be successful. Also, often a restaurant/food service establishment asks current employees for names of people with whom they have worked or have known as one of the best ways to get introduced to potential new hires. The practical exam or past shared work experience, on-the-job observation, personal recommendations, etc., seem to be the preferred and most effective way of hiring new staff.

For the up-scale food service establishments, people usually are beating the doors down to get a position and such establishments can be very selective about whom they hire and put in front of their usually loyal customers. As a small business owner having to deal with human resource issues like hiring, that’s a wonderful place to be. In such establishments, whether you are a food preparer or a wait staff professional, a reasonable living can be made by being one of the special few who do well in such a setting. The quality of the people working in these establishments (i.e., know and recommend good wine selections to complement a meal that they can fully describe in terms of taste, seasoning, method of preparation, etc.) and their ability to “cater to” the high-end customer base (a lot of which tends to be repeat business) is a key ingredient in the composition of the fine dining experience.

A note of caution, there are some positions in food service establishments that are suited to people who may have language and skill issues, so food service & restaurants have been targeted by enforcement agencies looking to find undocumented workers. It is highly suggested that potential employers be certain to complete the I-9 form process that requires a potential employee to show proof of eligibility to work in the U.S.

Safety & Cleanliness

In restaurants/food service, safety & hygiene training needs covers everything from food preparation to alcohol distribution. Even the simplest of food safety concepts like portioning, hand washing, glove usage, equipment-cleaning techniques, thermometer usage, and determining correct food temperatures must be covered. More importantly, any establishment who has been reported to have caused a food-borne disease outbreak has suffered from a business perspective by either being closed for a period of time by local authorities until the problem is corrected or by having their business curtailed because the establishment’s reputation has suffered as a result of the illness causing occurrence. For both reasons, health and safety concerns must be a continuing priority of all food establishments.

In today’s world, it is also a “must” to make certain that every person you are hiring (or engaging) is fully fluent, functional, trained, and adept at using today’s tools to perform work in a virtual world. Most food service ordering is done electronically, so having those skills is a necessity not only for food service, but also for the economic transactions that are becoming more and more electronic/bar code/magnetic strip oriented.

If you need to hire (or replace) people who have the skills, certification, training, and experience noted above, where do you find them? A quick internet search will give you the contact information for schools which provide training in your State or geography (and they usually have a referral service for alumni). Also, with today’s social media reach, using your private list of key contacts by simply letting them know you have a specific need for an employee will probably satisfy your talent needs faster than you can imagine. If you use your search engine to query “employment agencies near {zip code}” not only will you get names of a variety of hiring agencies (aka “headhunters”) who can relatively quickly provide you with suitable candidates at a reasonable cost, but you will also see a number of boards on which you may post your “opening” at virtually no cost. If you use this tool, be prepared for an avalanche of candidatesthe point being, be selective in the modalities you use to find talent.

For more ideas on how to find the people you need, please refer to the Human Resource for additional suggestions.

Billing & Accounts Receivable [top]

Eateries should make big bucks in 2007, yet owners may continue to struggle for their piece of the pie. The National Restaurant Association predicts the American restaurant industry will rake in a whopping $537 billion this year, up at least 5 percent from 2006 revenues.

But, while the boom bodes well for the nation's 935,000 restaurant and food service outlets, the irony is that cash-flow issues continue to plague the business. Even successful restaurateurs, it seems, are operating under badly-timed billing systems, with their accounts-receivable columns out of sync with accounts payable.

On the upside, analysts offer some solid solutions. A generous measure of sound cash-flow management, they maintain - along with the right invoicing and accounting software - can allow business owners to collect the money owed them in time to keep operations humming.

Cash flow - or fizzle?
Economists define cash flow as the movement of money into and out of a business. This ongoing cycle can propel a restaurant from solvency to failure, or vice versa.

In fact, most analysts agree that a rudimentary misunderstanding of cash-flow principles ranks right along with inaccurate menu pricing, employee retention headaches and faulty accounting systems as a major issue. Restaurateurs, they say, are missing the boat. While billing practices may vary from restaurant to restaurant, basic cash-flow rules apply to every eatery in business today:

Assessment. Conducting a cash flow analysis a thorough evaluation of an establishment's cash inflow and outflow - is the foundation for good management. The process includes a hard look at accounts receivable and accounts payable, among other financial components, to identify discrepancies and shortfalls. After an in-depth analysis, for example, an eatery owner may discover that December is his biggest revenue month, yet most of the bills come due in November.

Timing. By planning ahead, a restaurant owner can distribute incoming revenues so that money is there when it's time to pay the bills.

An example: Three parties are on the December schedule of a mid-size restaurant/catering establishment, but a huge insurance payment is slated for November. By collecting deposits prior to the December events, the proprietor can shift the cash inflow to cover monies due.

By the same token, asking for extra time on vendors' accounts payable likewise can allow strapped owners to rework their cash flow patterns. Most restaurant supply establishments are open to flexible financial arrangements - as long as they know they'll get their money.

Inventory. A number of experts suggest that too much income sits on shelves in the form of overstock, rather than going to cover the bills. According to one source, a standard full-service restaurant should keep only about seven days of inventory, a few less for fast food or quick-service operations.

Posting. Studies show that a fair number of restaurateurs post all or most of cash inflow incorrectly, thus giving them a skewed picture of what actually is clear profit. The most universal errors are the recording of all daily credit and cash receipts as income, no adjustments for discounts or free meals and accepting gift certificates as a credit rather than debit. Posting insurance down payments and installments in the month paid, rather than prepaying the account to spread monies more equitably over a 12-month period, likewise is a pitfall.

Software means dollars and 'sense'
Although some industry experts recommend professional assistance in keeping the books balanced, software producers are churning out all manner of programs designed to help small- and independent-restaurant owners manage their own finances. A number of these handle particular task sets, such as inventory, scheduling or accounting. Others bundle financial components within fully-integrated systems that do everything but kiss the customer goodbye. The following products are a sampling of what's on the market.

Operations and management spreadsheets. Primarily available in an Excel format, these spreadsheets organize financial information on a daily, weekly or monthly basis; forecast trends; assist with budgeting and analysis; predict weekly cash-flows; track accounts payable and receivable; generate invoices and reports, and much more. Prices start at under $100.

POS (point-of-sale) integrated systems. In addition to menu, scheduling and service-related capabilities, these applications typically unify customer ordering and payment with collection, tracking and reporting of financial data, applicable in single restaurants or across large chains. Many feature DSL/cable credit card processing, and single step payment or split check processing. Depending on the level of sophistication, software in this category can run upwards of $2,000.

Accounting packages. Available as individual programs or as "extras" in POS systems, functions typically include accounts receivable, purchase and sales tracking; invoicing; inventory control and food item costing. Prices vary widely, with some beginning under $90.

Finally, a word of caution: Whether planning to purchase a state-of-the-art system that controls every business function, or a single product to perform billing and accounts receivable chores, new software should be compatible with existing programs. As support goes, it's better to invest a few extra dollars to insure training and backup, as opposed to flying solo - especially when problems arise.

Vendor Relations & Purchasing [top]

The food service industry consists of a lengthy menu of product suppliers. For restaurateurs, selecting the wrong vendor often correlates into a recipe for disaster. Before contracting with a food distributor, industry insiders recommend that owners follow a few basic steps. Doing so could mean the difference between cooking up sales and putting out fires.

Savory vendor tips
Faced with a number of food distributor options, restaurateurs should explore all the best strategies to keep their fridges full.

Order Together Many smaller to medium sized eateries might consider teaming up with other nearby restaurants to form a coop of sorts. Since distributors generally price product by bulk, it's often cheaper to buy in large amounts. Provided they use all of the food delivered, restaurants get more for their buck when they purchase in mass quantities. With a handful of dining establishments placing one large order on a single ticket, the price certainly looks to go down for all involved.

Look at Capabilities Restaurants wanting more from a distributor often turn to an established national food vendor. These operations generally own facilities throughout numerous states, allowing them to handle a larger capacity of customers. In short, no order is too demanding. While small, independent distributors might offer cheaper prices due to the scope of their delivery area, they do not always provide the bonus services found at larger operations. For instance, some national vendors give their clients routine market reports and trend studies, outlining top-selling items around the industry for that time period. In other cases, these large-scale distributors provide menu and recipe services, helping their customers coordinate meal options based on the products they order. Even more important, national distributors tend to hold promotions on a regular basis. For instance, free delivery when purchasing more than $100 in food.

Check Distributor's Track Record The cheapest, most dependable vendor means nothing if that company sells inferior, unsafe products. No matter the type of food distributor, restaurateurs should always research the vendor's credentials and regulatory practices. Industry specialists tell eatery owners to make sure their distributor receives supplies from licensed, established sources. It's important to find out if the workers handling the products are trained in food safety.

In addition, restaurateurs should contact the appropriate health department officials to see if the distributor possesses any code violations. Restaurant owners can learn a lot about an operation simply by talking to others about their experience with that particular vendor. Some food safety experts even recommend visiting the distributor's warehouse(s) from time to time. If this however presents a problem, restaurateurs should at least know the vendor's quality assurance procedure. Paying attention to details such as the condition of delivery trucks, packaging and product presentation also might help reveal the vendor's safety practices.

Purchasing Prospects
Like their hungry clientele, restaurants run on food. Each week or so, dining establishments must place food orders to vendors. The buying process is not an exact science, however. Eatery owners, managers and chefs must time purchases on an as-needed basis. There's no guarantee they will be able to use the ingredients before the product spoils, though. To help lessen the risk of waste, software companies offer programs that track inventory as well as alert employees of expiration dates, low stock and needed products. Still, not all restaurateurs have the time, nor desire, to train staff members how to run a software application.

Other purchasing possibilities include working with local vendors. According to the National Restaurant Association, a growing number of dining establishments are relying on locally-produced food items. This ensures freshness, cuts back on the time it takes to get products from vendor to restaurant and often reduces delivery fees. Moreover, it allows the restaurant owner and vendor to form a more personal business relationship since they're within driving distance of the other. Some industry pundits feel eatery owners should always negotiate with the vendor - particularly if they are a repeat, loyal customer. The logic is that the food loses value when it's stockpiled and aging in a distributor's facility. Restaurateurs remember: The vendor also is running against the clock in terms of selling and product expiration dates.

In certain instances, eatery owners opt to hire a restaurant consultant to help with purchasing specifications. These cuisine craftsmen not only help restaurants purchase the right items for their operation, but show them how to incorporate the products into a menu that sells. In addition, consultants usually aid in meal pricing, setting up food delivery systems and portion control. Establishing efficient methods helps owners get the most out of their inventory.

Restaurant Insurance [top]

Business risk takes on a new meaning in the restaurant industry. Staff must work with knives, fire, hot frying oil - and that's just the cooks. In the dining room, slick floors from spilled drinks present the potential for slips and falls, while food allergies, piping-hot liquids, theft and grease fires pose just a few more dangers. Acquiring a good insurance policy makes sound sense for anyone operating a dining establishment. Though the menu of coverage types is vast, a quality agent can outline what plan best accommodates a business owner's situation.

Employment Practices Liability Insurance (EPLI): This type of policy - which is carried by many restaurants - covers liabilities that stem from the employment relationship. EPLI tends to protect the business, its directors, managers and officers against claims brought by staff members. Still, many policies can be expanded to safeguard against claims brought by third parties, such as patrons and vendors. Most policies even have optional coverage for employees, including temps, seasonal staff and part-time personnel. Acts that might be covered under EPLI include:
- Sexual Harassment
- Discrimination
- Workplace Harassment
- Failure to Hire
- Wrongful Discharge, Evaluation, Promotion, Discipline
- Negligent Hiring
- Employment Related Personal Injury (libel or slander)
- Workplace Tort
EPLI usually covers:
- Defense cost for covered claims
- Punitive or exemplary damages
- Liquidated damages pursuant to the Age Discrimination in Employment Act or the Equal Pay Act
Commercial General Liability Insurance Geared Toward Restaurants: General liability policies cover third-party claims of bodily injury and property damage that occur on the insured's premises, as a result of operation, products or completed operations. The policy provider typically will pay for legal defense cost and/or settlement. Many insurers have tailored restaurant specific policies to be added on to a general liability plan. These include:
- Assault & Battery: This option covers third party liability claims that stem from any assault or battery on the restaurant grounds. Coverage includes violent acts between patron to patron or employee to patron.
- Liquor Liability: This option covers lawsuits/claims of bodily injury or property damage resulting from patrons who consumed alcohol at the insured's restaurant. These policies cover related instances that take place on and off the eatery's property.
- Hired/Non-Owned Vehicle Liability: This option provides excess liability coverage for hired - a.k.a. rented - vehicles and those that are not owned by the restaurant, but used for business purposes. For example, an employee using their truck to pick up ingredients on the way to work.
- Errors and Omissions: This coverage really applies to eateries that cater or provide planned menus for special events. Errors and Omissions policies protect the restaurateur in claims that the establishment failed to perform according to contract or expectation.
Commercial Property Insurance: Most restaurants already have some type of property insurance. These plans pay for losses to the establishment, associated structures and contents. Risk covered generally include fire, storm, and theft (other factors may be named on the policy). Again, insurance companies have looked beyond the obvious and now offer extended coverages.
- Equipment Breakdown: The kitchen of a restaurant serves as the heart of the business. If once of the intricate pieces of machinery stops working, profits can quickly flat line. Therefore, insurers offer coverage for just this scenario. Usually an Equipment Breakdown policy covers losses caused by a malfunctioning piece of machinery. This might include a loss of food supplies do to a refrigerator not containing the proper temperature.
- Food Spoilage: This option covers losses related to food spoilage caused by a power outage, often including brownouts and blackouts.
- Money & Securities: This option covers money and securities taken by theft or holdup. The coverage applies to cash stolen on and off the restaurant's premise.

Many insurance providers will package a number of these and other coverages together and market them as "Restaurant Insurance." The key to creating the right policy is considering all factors before purchasing a plan. Is the restaurant located in a safe place? Will delivery services be offered? What demographic will the restaurant target? What type of cuisine will be sold? These and other questions offer great insight on what insurance package serves the greatest purpose.

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Restaurant Communication [top]

Running a restaurant definitely comes with a generous side dish of business hurdles. A highly-competitive market, constantly diminishing inventory (by sale or spoilage) and routine changes in consumer taste represent just a few morsels owners might find hard to digest. Still, it's an industry founded on recipes, and some restaurateurs feel they have discovered the key ingredient to an efficient operation. It all starts with good communications.

A steady increase in wireless and Internet-based innovations has dramatically changed the face of the restaurant industry. Waitresses are swapping out pens and notepads for electronic ordering devices that speed up the process and ensure fewer errors. Managers no longer need to fill out inventory paperwork or place phone calls to the vendor when ordering supplies. Instead, a few clicks of a keyboard - whether attached to a desktop computer or wireless device - gets the purchasing job done. These mark only a few of the changes heating up the food service industry.

Digital Order In!

At many eating establishments, a hostess seats the patrons. After a few minutes, the waitress brings the customers a glass of water - leaves for a bit -comes back for the drink order - leaves for a bit longer - then takes the food order. While all good things come with time, this kind of service, not to mention lack of communication between the staff and consumer, usually leads to a poor business reputation. Fortunately, there is an extensive selection of virtual options for restaurateurs wanting to improve communications in every facet of service.

E-Menu
There are quite a few variations on this innovation. The standard models let patrons select their plates from a notebook-sized screen. With the devices usually placed right at the table, the customer gets to manually add and remove food options - for instance, building a salad. Once the patron wraps up their order, they send it off to the kitchen with a click. The cooks then print out the ticket or view it via a monitor. Most E-Menu systems even allow the patron to make changes to the order in real-time after it's been sent to the cooks. Pictures of available food options, complete nutritional breakdowns and other interactive features tell a consumer everything they need to know when picking a meal. Some models even show the consumer what the price of the meal will be once tax and gratuity is added. -Certain restaurants have E-menus programmed for Internet access and games. More importantly, these systems keep the production flow running smooth by reducing mistakes that often occur with double data entry. In this case, wait staff must transcribe an order on a traditional notepad and then enter it into a computer. Other benefits include the ability for managers to change the digital menu on the fly. Should a product run out, staff can "86" the item with a few clicks. Should the chef decide to change the daily special or highlight a specific dish, basic E-Menu software allows real-time updates.
Handheld Digital Notepads
The title says it all. Using the same concept as wireless devices like the PDA, Handheld Digital Notepads let wait staff capture an order and send it directly to the kitchen without ever slowing a beat. Most Handheld Digital Notepads use a pen-like pointer. The waiter -uses the pointer to write-up or select a platter while taking the patron's order. Once finished, wireless transmissions send the order to the kitchen, where a ticket is printed. Some of these devices even have the capabilities to ring-up a check and take credit cards right at the table.
Inventory Purchasing Solutions Mean Improved Vendor Communications
Many restaurateurs kickoff the work week with a few hours spent fumbling through refrigerators and pantries. During this time, they take count of needed products and track expiration dates, checking off inventory orders as they go. The whole song and dance is usually closed out with a purchase call to one or more food vendors. No wonder orders often come to the backdoor with extra items or products missing altogether. To minimize culinary confusion, more and more restaurant owners are turning to inventory tracking/purchasing applications. These computer programs - in part - are designed to clear the lines of communication between the dining establishment and food distributor. Most suites contain functions that allow managers to enter and track vendor invoices for everything purchased. This not only makes reorders simpler by showing how quickly certain amounts of product moved, but also helps owners keep a close eye on price trends.

On the other side of the food chain, many vendors now offer electronic inventory ordering via the Web. Through these systems, restaurant management can view order/delivery status, customize order templates, change orders and more. The restaurant usually forms an account with the food distributor, interfacing all inventory data. The system then uses a combination of sales history, current inventory, sales projections, and special events to help the owner calculate and generate the appropriate order amount. Once the eatery manager approves a delivery, all of the information gets entered into the restaurant's account for future tracking.
Self-Service Food Ordering Kiosks
The future of restaurant-customer communiqu- is taking a digital turn. Most people tend to associate touch-screen kiosks with fast food and possibly the airport ticket counter. However, new technological advances have these devices popping up at even some of the more sophisticated restaurants. Self-Service Food Ordering Kiosks let the patron order and pay for their meal in one stop. They then head to the dining room to wait for the upcoming food. For the restaurant, these devices reduce complaints about botched orders, present an ideal way to up-sell and cross-sell, and keep all service stations on the same page.

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