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Restaurant Business Success Requires Continual and Objective Assessment

Independent restaurant operators who annually evaluate their operations and practices are more likely to have sustainable businesses with continual improvement. It can take a great deal of time and consideration to do properly. The good news is that RestaurantOwner.com has created a tool that makes the process more seamless.

In this article, we review the latest RO.com Restaurant Assessment and how it works. As of this writing, 91 RestaurantOwner.com members have participated in the assessment. Joe Erickson, vice-president of RestaurantOwner.com explains the value of the process and the results to date — including what surprised him.

Call it an annual physical for your business. RestaurantOwner.com has created an online assessment tool for your independent restaurant to help you identify your business's strengths and weaknesses

"The assessment was created for two reasons," says Erickson. "One, to provide insight into what systems best practices our members are utilizing to operate their restaurant businesses. Secondly, to give respondents something to gauge which areas of their business have the greatest opportunity for improvement."

The process is not a report card, but an opportunity to take a close and objective look at your practices, and identify where you might bolster your operations. Says Erickson "if you are not scoring 50 out of 50, it doesn't mean you are failing. Rather, it is intended to inform about best practices, to allow you to evaluate if this something you should be doing. And if so, point to resources that can help you put systems for improvement into practice."

A SWOT analysis (strengths, weaknesses, opportunities, and threats) is standard practice for most organizations. RestaurantOwner.com identifies eight areas of the independent restaurant business that drive success, and poses simple questions for the owners and managers to assess honestly.

Eight Areas

The assessment helps participants evaluate eight areas of their independent restaurant.

1. Leadership & Culture –

What you do to ensure your restaurant retains top performers and is not constantly understaffed by creating a positive, engaging and rewarding environment. The RestaurantOwner.com 2023 Restaurant Assessment helps you explore whether your business:

• Effectively communicates a mission and/or core values that everyone knows and understands.
• Regularly and effectively communicates to staff what's going on in the restaurant, and that staff are valued and appreciated.
• Fosters a high-performance culture marked by mutual trust and respect, positive accountability, and maintaining high standards.
• Ensures that management provides timely feedback to team members in a respectful, constructive manner.
• Ensures that management is quick to recognize and praise team members for improvement, consistency, and going above and beyond what is expected.

Says Erickson: Very surprising that only 24% of respondents indicate they have an organizational chart and job descriptions for every position, yet 33% state they have written training manuals and programs. Only 37% indicate they have a culture of mutual trust and respect, personal accountability, and standards for excellence.

2. Marketing –

What you do to attract new guests and foster repeat patronage. The RestaurantOwner.com 2023 Restaurant Assessment helps you explore whether your business:

• Has identified what makes our restaurant different and better and clearly communicates this in our marketing messages.
• Focuses on providing high perceived value, not the lowest prices.
• Effectively engages followers on social media.
• Employs a growing customer database/loyalty program and uses it to increase repeat patronage and promote special activities.
• Employs takeout and curbside best practices to attract and retain off-premises dining customers.

Says Erickson: Very few respondents report they have a guest loyalty program, collect guest information, or identify first-time guests. They have a great opportunity to improve this. 60%, however, report they have an effective social media policy. 59% and 64% respectively indicate they concentrate on delivering what the guest wants and focus on delivering high perceived value, yet only 35% report having an intimate knowledge of their competitive advantage that is clearly communicated in their marketing. – another opportunity.

3. Food & Beverage –

• Streamlines its menu to offer what customers desire most and promotes kitchen efficiency, speed and quality.
• Employs opening, shift change, and closing checklists for each position.
• Uses a standard prep and build-to list, which is reviewed and adjusted daily based on POS sales-mix reports and anticipated levels of business.
• Ensures storerooms, walk-ins and shelves are clean, orderly and labeled, and products are date labeled and rotated.
• Holds staff accountable to a photo-based menu and recipe manual.

Says Erickson: More than 50% of respondents report they have clean, organized equipment, storage areas, label and rotate produce, etc., an indication they are probably good operators. Surprisingly though, only 28% said they had established ticket times, a major component of guest expectations and the guest experience.

4. Customer Service & Hospitality –

What you do to make your guests feel welcomed and cared for. The RestaurantOwner.com 2023 Restaurant Assessment helps you explore whether your business:

• Has clearly understood menu, ordering, seating, curbside, delivery and to-go procedures for our staff.
• Manages service steps and timing for each phase of the guest experience in each sales channel (takeout, curbside, delivery) is clearly defined.
• Ensures the staff understands how service and hospitality differ and are trained to deliver both to every guest.
• Ensures the staff knows that good service creates satisfaction but genuine hospitality creates delight, which is the key to guest loyalty.

Says Erickson: 39% of respondents report they do not have satisfactory systems or practices that lead to an intentional guest experience. 36% indicate their service steps are not clearly defined; 30.7% believe they have effective hospitality and customer service programs and systems; 35% believe their systems are designed to exceed guest expectations; and only 26% report knowing the guest journey and touchpoints.

5. Financial & Business Management –

How you control costs, manage cash flow, and analyze your finances. The RestaurantOwner.com 2023 Restaurant Assessment helps you explore whether your business:

• Calculates prime cost weekly, investigates variances and if necessary, promptly makes corrections.
• Uses a 4-week accounting cycle, not a monthly one.
• Bases the P&L on the restaurant industry standard chart of accounts.
• Uses a 12-week cash flow projection to stay on top of cash balance and expected inflows and outflows.
• Prepares weekly labor schedules with anticipated sales volume and actual labor is compared to budgeted labor daily.
• Analyzes every expense category on our P&L and have reduced or eliminated all costs that are not essential and do not negatively affect the guest experience.

Says Erickson: It is interesting how one-half of respondents reported they have up-to-date menu cost and a profitable pricing strategy, yet other data shows that COGS and labor (prime cost) is challenging due to inflation and supply chain interruptions. Also, it's interesting that 25 percent of respondents report they do not do any of these things very well. It's also peculiar that nearly 48% say they have a budget, yet only 28% calculate prime cost weekly.

6. Guest Experience –

What you do to consistently exceed expectations and delight your guests. The RestaurantOwner.com 2023 Restaurant Assessment helps you explore whether your business:

• Recognizes that more than anything our guests must feel SAFE and the business strictly adheres to health protocols adopted by our state and local government.
• Prominently highlights the COVID steps in our restaurant, on social media, and on the restaurant's website.
• Ensures the service staff is trained to deliver competent service and genuine hospitality at every touchpoint in each guest's journey (dine-in, take-out, delivery, curbside).
• Ensures the service staff is trained to respond to mistakes and complaints immediately, resolve the problem in favor of the guests, and have authority to comp/discount/refund to bring them back.
• Ensures the staff understands that success is directly tied to the quality and consistency of the guest experience and the restaurant's ability to create positive emotional responses in every interaction with our guest.
• Ensures the service staff understands the power of a smile (even wearing a mask) and how to make a positive first impression.
• Promotes that service staff follow the 10-4 rule so that guests are continually recognized and feel special whenever they encounter a member of the staff.

7. Employee Experience –

What you do to consistently develop your staff's competence and professionalism and make them feel like an important part of your team. The RestaurantOwner.com 2023 Restaurant Assessment helps you explore whether your business:

• Believes and acts on the belief that one of the greatest job benefits the restaurant provides staff is the opportunity to work with other friendly, supportive, hardworking co-workers; therefore, the business provides coaching to problem employees and makes tough decisions quickly.
• Has an organized, effective onboarding process to make new hires feel competent, productive and part of the team quickly.
• Have written job descriptions (table service/QSR) and training manuals (table service/QSR) for every position.
• Has an up-to-date team member/employee handbook that spells out employment and personnel policies.
• Ensures management has been trained to clearly communicate expectations on all tasks and job assignments so the entire staff knows what success on their job looks like.

8. Strategy / Business Model –

What you've done to reposition and realign your restaurant to survive and then prosper in the current and post-pandemic operating environment. The RestaurantOwner.com 2023 Restaurant Assessment helps you explore whether your business:

• Has evaluated, added and/or enhanced our takeout, curbside, delivery and virtual kitchen sales channels.
• Has added or is evaluating affordable, effective technology to help the business create more of a contactless, frictionless experience for guests in every sales channel.

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Not Too Late to Make a Fresh Start

If you are a RestaurantOwner.com member who is interested in sizing up your business with the RestaurantOwner.com 2023 Restaurant Assessment, it is not too late.

If you are not yet a member, please consider joining to take advantage of this assessment, as well as a library of learning system courses, articles, and tools to help you have a better restaurant, a better business, and a better life as an independent operator.

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Ninety-one RestaurantOwner.com members have participated in the 2023 Assessment to date. Below are their responses, in percentages, to self-evaluation of operating practices in five key areas of restaurant management.