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Optimizing Your Independent Restaurant for the New Year

If you've been keeping up with the news, you may have heard about how Elon Musk has been trying to increase efficiency at his recent acquisition, Twitter. From his very first day as owner, Musk aggressively changed policies, eliminated positions, and pushed the remaining employees to find more waste to trim as he attempted to make the business solvent. It remains to be seen whether his approach will work financially; but the cost to morale at Twitter has been incalculable.

If you take an old-school manufacturing approach to improving your restaurant's efficiency, you could create a whole new list of headaches. In this article, we discuss ways to improve your operations in ways that can boost the guest experience, staff morale, and your bottom line.

Launching into a full-scale efficiency push without taking into account how it could affect your team is a disaster waiting to happen. Striving for efficiency is a worthy goal, but it's how you go about obtaining that efficiency that matters. First, it requires understanding of exactly what efficiency is and what's realistic to achieve as a restaurant owner or manager. Second, it requires positive engagement from all of your staff, from department heads to line supervisors to hourly employees.

The first error that many operators make when trying to become more efficient is to take a too-narrow view of what efficiency means. We often think that efficiency is all about streamlining operations to eliminate waste and reduce costs. Of course, these are important goals. But true efficiency is really about the optimal deployment of resources. In some cases, increasing your operation's efficiency may mean making additional investments in some resources so that you can cut back on others. As long as your revenue grows at a faster pace than your expenses, you'll end up ahead.

Let's look at an example of the wrong way to think about efficiency in a restaurant. Imagine an operation that is struggling to get menu items out quickly, especially during rushes. "We need to make the kitchen more efficient," the owner might think. "Let's break down each task in the back of house and streamline our processes so that each employee knows exactly what to do and in what order every single time. That'll keep us out of the weeds."

This process-oriented approach is called "task engineering" and goes back to Henry Ford and his revolutionary production line. Ford carefully defined every task that was needed to manufacture his cars and engineered the assembly line to constrain each employee's role to a smooth, repetitive set of motions. This innovation allowed him to control costs, assure quality, and dominate the auto industry at the time. (What people often forget is that Ford also paid his employees more than double the going wage rate, but that's another story.) As Ford demonstrated, task engineering works extremely well for producing large quantities of nearly identical items, something that many quick-service chains do extremely well. But what Ford gained in efficiency he lost in flexibility – just the opposite of what we often need in a full-service restaurant.

Popular and profitable items that are easy to produce should stay on the menu and be the focus of your promotional efforts. Items that don't sell well or are complicated or time-consuming to produce should be considered for removal, regardless of their effect on your food cost percentage.

We can't treat sit-down restaurants the same way that Ford viewed his automotive plant, largely due to the variable nature of customer demand. If your restaurant is lucky enough to have both a limited menu and a full reservation book, you can predict what will be needed and when with a fair degree of accuracy. In this case, a task engineering approach can work wonders. But for most of us, we don't know with certainty when guests will come in, how large their group will be, what they'll order, or how long they'll stay. This imprecision is part of why restaurateurs struggle so much with efficiency.

What's more, Ford was operating in a very different time from our own. Even though Ford paid very well, he did not have to contend with many of the labor challenges we face today. Perhaps because are considering Ford's example, many restaurateurs think that labor is the most important resource that must be managed to maximize their restaurants' efficiency. This isn't actually the case.

Improve What You Can Control

Anyone who has managed a restaurant knows that controlling employees is difficult if not impossible – and I'd like to add "ill-advised" to that list. Employees who feel controlled will not do their best work. In fact, you may find that employees are less productive and even actively hostile as they push back against what they probably perceive as micromanagement when they're told that they have to adhere to a restrictive new policy or make big changes to the ways they've been doing things. So, the first place to look for efficiencies in a restaurant are in those resources that a manager has the greatest control over: space, equipment and supplies.

Begin with your space. Efficient use of space means wresting as much revenue as possible from the areas that generate sales while keeping non-revenue-generating space to a minimum, and without compromising employee safety or satisfaction. In many table service restaurants, their front-of-house space is not being used as efficiently as it could. I am not suggesting that you should aim to cram in more seats to increase revenue – quite the contrary. Instead, maximize the efficiency of what you already have.

For starters, take a good look at how many of your seats are occupied during service. In many restaurants, there is a mismatch between the mix of tables on the floor and the typical party sizes that come in. Are you routinely seating parties of two at four-tops, leaving you with two unoccupied seats for the duration of that party's meal? Do you have a six- or eight-top that only gets used on weekends?

We tend to design our dining areas to accommodate peak conditions, but you may be more efficient if you alter the seating layout and table mix to match demand for each daypart. Consider having deuces that can be combined to create four-tops or six-tops (or even larger groups) as needed, rather than using fixed-size tables. Replace any rounds with matching rectangular or square tables that can be combined more easily. Direct your hosts to seat parties only at the right size of table during peak periods when your seats are in high demand. These strategies increase your seat utilization – in other words, the proportion of seats that are in use at any given time. Making good use of your existing seat inventory gives you perhaps the best "bang for your buck" for increasing front-of-house efficiency as these techniques may cost you little or nothing to implement, but can notably lift your revenues.

Another way to increase seat utilization is to shift demand to off-peak times. The "happy hour" or "early bird" programs that restaurants have used, pretty much forever, aren't just about driving revenue, but actually increase efficiency by making better use of the seats you have.

Your servers will naturally be more efficient as well as happier in their work if you make it easier for them to serve their tables. One of my local restaurants just moved to a new location and installed high-backed booths which guests love because of the intimate feeling they get from having their own space. But servers hate being assigned to serve these booths because the height of the booths' sides prevents the servers from seeing what is happening at their stations. This leads to delays in service and slows down the turning of the table between parties. (Booth backs that are about 42" high are a good compromise between guest comfort and server sightlines.)

Think about the sightlines from your host stand as well. If hosts cannot see if a table is getting ready to turn or is available for reseating, they will have a harder time keeping that seat filled. Some operators may have access to a table management tool as part of their point-of-sale system or as standalone software, but technological solutions are only as good as the data we put into them. Being able to just look at the dining room and take in the situation at a glance is often more efficient than relying on software.

The service areas in your front of house can also be harnessed to improve efficiency. A good rule of thumb for casual dining is to have one service area on the floor for every fifty seats. (You'll need more if you run a high check average or have a lot of moving parts to your service plan.) Don't forget to include service areas to support outside dining. A ratio of one service area to 40 seats might be better for outdoor areas because this seating is often quite a long way from the kitchen door. During the COVID pandemic, thousands of restaurants added outdoor seating but few included adequate service areas to support those extra seats. Servers had to travel further and faster to keep outdoor guests happy which slowed down the service and frustrated everyone, server and guest alike.

Kitchen Efficiency

Anyone who has managed a restaurant knows that controlling employees is difficult if not impossible – and I'd like to add "ill-advised" to that list. Employees who feel controlled will not do their best work.

In the back of house, your first step should be a deep dive into your menu. You probably already have some ideas of which items don't sell well, but don't just rely on your gut. Take the time to map all of your menu items to your sales. The classic approach to menu engineering is to look for items that sell well and have a low food cost (in other words, a high contribution margin), but I would add one more element to this analysis: how much effort it takes to get this menu item through the line and out to the guest. Popular and profitable items that are easy to produce should stay on the menu and be the focus of your promotional efforts. Items that don't sell well or are complicated or time-consuming to produce should be considered for removal, regardless of their effect on your food cost percentage. Any other menu item that sells relatively well but requires a lot of prep, takes several steps on the line, or uses a lot of ingredients should be studied in more detail: is the effort to produce this item worth what it contributes to the bottom line?

Next, look at the menu items you intend to keep for ways to cross-utilize ingredients. Learn from the geniuses behind The Cheesecake Factory's menu. They seem to offer dozens of different menu items, but a close look shows that many offerings are just rearrangements of the same ingredients prepped in the same way: that sauteed chicken breast ends up in salads, on pastas, and flatbreads, drizzled with lemon sauce for Chicken Piccata or with mushroom sauce for Chicken Marsala. Cross-utilization may seem like a well-worn strategy to many operators, but I have reviewed lots of menus that aren't maximizing the utility of what they are prepping or purchasing.

If you aren't already doing so, introduce cross-training for your line employees. Research tells us that cross-trained employees feel like they are contributing more and are more valuable to the organization as well as being less bored with their work.

Speaking of purchasing, a review of what lingers in your walk-in or in your dry store might give you ideas for how to make your food ordering more efficient. Are leafy greens going limp before they can be used? Sure, you may be able to create a special around that item (and hope it sells to justify the effort), but it may be a better use of space and energy to reduce the quantity you purchase. Volume pricing isn't such a bargain if you are throwing out a portion of what you are buying at that discounted price. Be sure to take into account how you are storing food items before you change your purchasing. Rotting produce might be caused by bad handling rather than overbuying. Make sure employees are using best practices when receiving, prepping and holding ingredients, and have an earnest talk with your supplier if the quality of what's coming in doesn't meet your needs.

Just as you did with ingredients, evaluate the equipment that you need to produce the items that have earned their place on your menu. A typical problem is either having too many items relying on the same piece of equipment or having pieces of equipment that sit idle much of the time, taking up valuable kitchen real estate. If you are the analytical type, creating a grid with the menu items as rows and the equipment you have as columns helps you chart what's being used for what and clearly see where you may have bottlenecks or underutilized items. The most common problems I see are overdemand for the fryer or the sauté range and under demand for the salamander or big items like a tilt skillet. Adapting your production methods can help balance equipment use. You may also need to fiddle with your menu so that individual stations on the line aren't slammed every single service.

As part of your efficiency efforts, sit down with the leaders in your back-of-house team and get their input: what would help them get items out with fewer headaches? What's in the wrong place? What additional tools might they need? A lot of restaurants don't have sufficient refrigeration on the line which means employees have to continually go into the walk-in or distant reach-ins to get what they need, a practice that wastes both human and electrical energy. You want to get all storage as close to the point of use as you can which sometimes requires being very creative about how you use wall space and the space underneath equipment or tabling. In many cases, spending a bit to get the right equipment in the right place will pay off in greater efficiency.

Don't limit your back-of-house review to food production. Dishwashing is often an area where minor tweaks can give you significant efficiency gains. Do you have the right combination of racks for the kinds of service ware you use? Underfilling a dishwasher rack wastes water and energy. Be sure you are using glass racks that are tall enough to protect your stemware from damage. Are you having to run some items through a second time because they aren't getting clean enough? Presoaking in a bus tub could solve your problem without any additional cost. Or talk with your detergent vendor to see if a different product would help, even if it costs a few dollars more. A higher purchase price is going to be cheaper in the long run than running that rack through the dish machine a second time.

Using a wide range of service pieces across your menu also eats into your productivity in the dish pit, especially if these items don't stack well. Fussy triangular plates or hand-wash-only platters might look great on your tables, but the extra effort that these require to get them clean and keep them in good condition probably outweighs any impact these have on the guest experience.

Anything that makes it easier to keep your kitchen clean will improve efficiency as well as protect against illness or injury. Get casters for any item that doesn't have a hard connection to a plumbing or gas line and consider flexible quick-disconnect hoses for gas equipment so that it is easier and faster to move it for cleaning.

Seamless vinyl floors designed for commercial kitchen applications can be brought up the walls to form a neat, curved base that doesn't trap dirt and cleans up fast. And shell out for more than one mop and bucket set. I'm continually surprised to see kitchens where staff have to take turns cleaning up their areas because they can't get their hands on the mop!

You'll notice that all of these efficiency suggestions are design-, menu-, or equipment-related, rather than focused on changing how employees do their jobs. Many operators think that having an ironclad policy for every eventuality makes a place easier to manage but, in many cases, a rigorously detailed procedure manual or hawkish oversight by management can send the message that you don't trust your staff to do their jobs. Adam Lathan, owner of The Gumbo Bros in Nashville, puts it this way: "A happy staff is efficient. An efficient staff isn't necessarily happy."

What makes employees happy is providing them with clear and consistent directions about what is expected of them and sufficient autonomy to make decisions that affect their ability to execute, giving them the flexibility to adapt their activities as conditions change, and providing them with the necessary space, equipment and support to do their jobs to the best of their ability. At first glance, you might think that loosening the reins on employee activities would invite inefficiencies rather than eliminate them.

But academic research suggests that employees who feel empowered are more dedicated to their organiza- tions and more innovative at finding ways to help their employers be successful. And there is lots of evidence that keeping an employee is far more efficient than replacing them. Finding and training a new line-level employee costs anywhere from 33% to 65% of that role's annual salary, to say nothing of the time and energy that employee turnover takes away from other management activities.

It is natural for many employees to view efficiency efforts with some suspicion. They may feel that any changes to the way things are done will mean more work for them – or worse, that your ultimate goal is to cut hours or even eliminate positions. Right from the beginning, include them in collectively identifying areas that could be streamlined or opportunities to reduce waste. If you can, show your line employees your controllable expenses and ask them to give you suggestions for how they would go about reducing these costs. (I most certainly do not recommend sharing information about your labor costs in this way. Stick to sharing only direct operating expenses and perhaps cost of goods sold because both of these cost categories are directly influenced by how your employees work.) It's important to withhold any judgment about the suggestions you receive from your team. There is nothing as demoralizing to employees as being asked for suggestions only to receive a litany of reasons why their suggestions won't work. Consider every suggestion as valid and thank each employee for their ideas immediately. And don't make a competition out of it – the idea is to be as collaborative as possible and make employees feel comfortable sharing their recommendations.

Finally, a frequent source of restaurant inefficiency stems from not having positions covered when you need them. Recently, many operators have felt this gap particularly acutely as staffing each shift has become more and more of a challenge. Wherever it's feasible, work on building resiliency and flexibility into your staffing plans. If you aren't already doing so, introduce cross-training for your line employees. Research tells us that cross-trained employees feel like they are contributing more and are more valuable to the organization as well as being less bored with their work. But that's not the only benefit of cross-training. Having employees cover a range of positions gives you the flexibility to handle wide variations in consumer de- mand and the resiliency to adapt if employees are out sick or leave your team on short notice. This effective deployment of your team's talents and abilities is the key to an efficient operation.

Effortless Outcomes

Your restaurant is truly efficient when the positive outcomes you seek don't feel effortful to you or to your team. Getting to this point takes time and is often best approached in phases. Phase one should be addressing the low-hanging fruit: optimizing your seat utilization and dropping problematic dishes from your menu. Phase two should be a close look at your purchasing and equipment use and making adjustments where you need to. Most operations will see efficiency gains after just these two steps, which have the added advantage of not having any direct effect on your employees or their roles.

Do you want to go deeper? For phase three, engage your employees in finding further efficiencies in direct operating expenses and cost of goods sold, being mindful of their views and concerns whether they are articulated or not. Consider your staff to be your partners in getting to a tightly run ship and you'll all reap the benefits.