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Managing employee records in a restaurant

Maintain complete and comprehensive Employee Files is one of the most important things a restaurant owner does in limiting their liability as a business owner. Properly kept employee files help reduce workers comp claims, lawsuits and even insurance premiums. Take our advice and read the following article to learn what it takes for a restaurant owner to keep comprehensive Employee Files.

There are a lot of human resource management softwares on the market today. Some are integrated into timekeeping and payroll softwares like ADP, but may cost upwards of $10,000. How does a small restaurant on a tight budget track employee information when they can’t afford an expensive employee management software solution?

I would like to share with you a tool we have that helps you maintain your employee records. It is a spreadsheet that allows you to input lots of vital information and calculates employee absence and tardiness. I’ll share a detailed description as to what exactly is on the spreadsheet so you can take with you the knowledge without having to buy anything if you like. If so inclined, you may also purchase our Employee Record & Attendence Spreadsheet download from the webstore at www.bodellconsulting.com/webstore.html to make things simple and easy. I will also cover the other information you need to make sure you are keeping a comprehensive Employee File.

Employee Record & Attendence Spreadsheet

One of the main functions of an Employee Record is to record vital employee data. The following information should be included in any basic employee record:

  • Last name
  • First name
  • Birth date
  • Gender
  • Street address
  • City
  • State
  • Zip code
  • Cell/Home phone number
  • Email
  • Position hired for
  • Direct supervisor
  • Department supervisor
  • Emergency contact
  • Contact relationship
  • Contact work number
  • Contact cell/home number
  • Start date

In addition to all this basic information that you should be keeping on every employee, you should also have a digital or written record of every occurrence of all tardies, unexcused absences, excused absences, sick days used, vacation days used and personal days used.

Our spreadsheet allows you to track every occurence listed above day by day. It also adds all the occurrences into total columns for each occurrence so you can view the total number of tardies, excused and unexcused absences, sick days, vacation days and personal days.

With a spreadsheet, your employee information can be tracked digitally to cut down on paperwork. You can also print it to put a copy in the actual paper file for the employees.

Other information to include in an Employee File

Some other items you should store in your employee’s paper file include:

  • Job application and Resume
  • Written Employment Offer
  • Signed receipt for your Employee Policy Manual
  • Signed Job Description
  • Employee Contract
  • Signed Training Manual receipt
  • Copies of completed and signed Employee Evaluations
  • Completed W-2
  • Signed Reprimandsalong with copies of Employee Policy Manual pages showing which policy the employee violated
  • Signed Customer Complaint Reports or Employee Incident Reports involving employee
  • Signed Employee Benefit acceptance or denial
  • Awards or Bonuses earned
  • Any other contract, agreement or receipt signed by employee
  • Employee Termination record

One common form that employers make the mistake of putting in the Employee File is the I-9. I-9s should all be kept together in one file separate from employee records. This helps keep the employee records private from federal immigration agents should your I-9s be requested. Medical records should also not be kept in Employee Files to make sure you remain compliant with HIPAA rules on patient privacy.

I hope this article helps you as a restaurant or food service owner to keep employee records that will keep your business safe from fines, lawsuits and other liabilities. Visit our main website at www.bodellconsulting.com to see if there are any other operating, cost control or marketing issues we can assist you with.

Brandon O’Dell
O’Dell Restaurant Consulting
(888) 571-9068

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Menu Engineering Gets A Makeover

Menu picture with scanning pattern

Scanning pattern

Interesting research in the linked article about menu engineering that contradicts what many of us have been taught.

I would like to know more about the study though before considering it definitive, like how large was the study group, how often was the study repeated with different test subjects to see if the results were the same, and were the subjects interviewed for subjective analysis to make sure that knowing they were being studied wasn’t affecting how they scanned the menus? Has this study been peer reviewed?

Menu Engineering Gets A Makeover.

Great article on running Facebook contests…

Can I use coupons to build my business? It works for restaurants like Papa John’s.

In most cases, coupons are a path to disaster. Coupons undervalue your product, and getting customers to come in with coupons doesn’t give them a good idea of what type of value you really offer. You end up with customers that think your restaurant is a good value, “with a coupon”. Then, they wait til the next coupon to come out before they come back to your restaurant.

As far as chains that use coupons, they know something the average independent operator doesn’t. They have a sales history showing them how much of their sales are given away in the form of coupons. They track their discounts, and they price their coupon marketing strategy into their menu. If a pizza costs them $3.00 to make, and they need to make $7 gross profit for every pizza they sell, they know they have to make the regular price of that pizza $12 or $13 so they can send you a coupon and make you think you’re getting a good deal paying only $10.

How many people really pay $18.00 for a large pizza at Papa John’s? None. People wait until they have coupons. Sure Papa John’s makes money, but they know they’re not earning repeat, full price, customers by sending out coupons. They know how much money couponing is costing them, and they adjust their prices accordingly. They then use coupons as a “trick” to build value into their product.

Can coupons be used responsibly and still allow for a profit? Sure, if that is part of your marketing and pricing strategy from the get-go. Outside of that, coupons should only be used to promote items that earn you MORE gross profit than you need to make money AFTER the discount is applied. Even then, I suggest never offering a flat percentage discount, and only using coupons to promote package values, or to give freebies that are “extras” that won’t detract from the gross profit you’ll make by selling the rest of the meal at full price.

How much should I budget for marketing in my startup?

It’s common for startup restaurants to budget an initial 10% of their sales to go toward marketing in the first few months. If no one knows who you are, it can take some $’s to get known.

After that, it’s more common to see 2-4% of your sales being directed toward marketing. As far as how to break that down, that depends on a lot of factors, including your ability to do much of the work yourself. The less you are in the business working, and the greater ability you have to design and print your own materials, the less of your sales you will spend on marketing. Different marketing mediums work differently for each business also.

No matter what you budget, you’ll want to focus your personal effort first on the most inexpensive marketing tactics, like shaking hands and giving out samples with menus to get your name and product in front of people. You’ll also want to concentrate a lot of effort on building your customer database. Marketing dollars spent communicating with anyone who has already been in your restaurant will most likely yield the greatest return on marketing dollars.

Of other factors that will determine how much you need to budget, your location, visibility, and accessability are the most important. A good location, combined with ease of access, and visible, well designed signage can go a long ways to drive traffic into your business, eliminating some of the need for costly marketing campaigns.

Your message itself will also affect how much you will have to spend on marketing too. If you have a good unique selling proposition, and use it effectively, you’ll have to spend less to get people in your door. If your concept is confusing to people, if you try to be too many different things to too many people, or if you fail to follow through with your USP’s promise, you’ll have a hard time filling seats no matter how much you spend.

Unique selling point – vol. 2

See “Unique selling points – vol. 1
I hear all the time from owners and operators that companies like Applebee’s are successful because of their big advertising budgets. I say “bull”. Applebee’s, for example, is successful because of it’s branding. It’s the effectiveness of their marketing that gives them their competitive advantage, not the number of dollars they sink into it. Branding yourself is more than just employing millions of dollars worth of repetitive marketing. That is not why the marketing programs for chains work.

Branding yourself starts, the whole marketing program starts, with choosing a unique selling point, choosing that thing that makes you different. Here’s a clue for that thing; It’s NOT your food or service. If you’re running around telling everyone your food is better, you sound just like everyone else. That’s not unique, it’s the opposite of unique. No matter how much you tell everyone how great your food or service is, you’re not giving them any reason to come to you that all your competitors aren’t also giving them. Point of clarification: ALL YOUR COMPETITORS THINK THEY HAVE BETTER FOOD AND SERVICE THAN YOU, AND THEY TELL EVERYONE THEY CAN.

While there are people that will say a certain place has the best food, or the best service, these are only perceptions, and perceptions can be based as much on a businesses marketing as it can it’s product. Keep in mind, there are millions of people out there that think Applebee’s food is better than anyone’s, including yours. Is that an opinion based on any type of objective analysis or professional expertise? NO! It’s an opinion, most likely driven by emotion, the emotional bond Applebee’s has formed with that customer. Let’s face it, 9oz steaks and microwaved vegetables are NOT better than your food. No way. But…. to those people that go to Applebee’s religiously, it’s perceived as better, or at least a better value, and perception is reality.

So Applebee’s has millions of marketing dollars to brainwash their customers, and that’s why so many people think they’re the best, right? WRONG! It’s not the marketing dollars that create the perception, it’s the effectiveness of the message.

One thing Applebee’s did from the beginning, back in 1980 I think, they chose a unique selling point. They created a story or an image that separated them from their competition. Then they created a moniker to support it, and designed their store around that USP. Applebee’s markets themselves as “America’s favorite neighbor”. They sell their customers a sense of community, whether their customers recognize it or not. Notice the unpretentious design to the inside of an Applebees. The stained glass windows in the door. The fixtures that almost make you think of the nice old couple down the block. Notice how they make an effort to decorate their stores with photos and memorabilia from the city or region that the store is in, or when they can’t, other items you would expect to see in that nice old couples garage or house.

Applebee’s sells their customers a sense of community. They want to be viewed as that favorite neighbor on the block, that nice old couple down the street. By doing this, they attach themselves to an emotion present in everyone, the need for community, the comfort of being at a beloved neighbor’s house.

THAT is a USP. Notice, I didn’t once mention food or service anywhere. Food and service can also back up the USP, but it can’t BE the USP, because there is nothing unique about claiming you have better food or service than anyone. A USP separates you from your competition, it doesn’t lump you into the same group. Then, when you have built your concept effectively around a USP, you will begin to make that emotional connection to your customer that is stronger than any connection you can make with your food or service. If you’re really good at delivering on your USP, and you push it in all your marketing from your logo to your ads, you will effectively brand your restaurant as THE place to go when customers want to feel the way your USP claims you will make them feel.

Emotions are the primary reason for humans to make any buying decision. Big corporations know this, and they employ marketing companies that help them exploit this. Armed with emotion marketing, the quality of food and service becomes secondary, as people can be marketed into believing food and service is actually better than it is. As I’ve said many times, that doesn’t mean good food and service aren’t important, it just means they are a minimum requirement for being successful, not the primary reason for it.

Once again, it’s not the big ad budget that makes companies like Applebee’s strong. It’s the effectiveness of that marketing message.

Stick to the news, Mr. Markel

Alex Markels a writer for US News & World Report made the following observations regarding the success of Chipotle Mexican Grill, a high volume fast casual concept.

A Tested Recipe: Five Ingredients
Five lessons for start-ups from Chipotle Mexican Grill
By Alex Markels
Posted January 9, 2008

It’s the food, stupid. Its hip surroundings and green ethic notwithstanding, Chipotle succeeds because its food tastes better than the competition’s. Customers pay an average of about $9 for the privilege.

Keep it simple! With just three menu items, Chipotle takes advantage of a straightforward production process that keeps costs low.

Fast is still important. As good as Chipotle’s burritos taste, customers won’t line up for them if the line doesn’t move quickly. And now they can preorder their food online.

There’s always room for improvement. Chipotle upgrades ingredients and processes. Example: ceo Steve Ells found that salsa tastes better when onions are cut by hand instead of by machine.

Embrace your “enemy.” Ells shrugged off investment bankers and venture capitalists in favor of McDonald’s to grow the business. The chain helped with purchasing and distribution, too.

I’d have to disagree with Mr. Markels first point. While Chipotle does offer better ingredients than Taco Bell and some other fast food, it can’t touch the quality of food put out by authentic Mexican fast food restaurants. I don’t taste the real chiles in the meat (though they’re certainly there in the sauces), and there are some authentic Mexican seasonings I don’t taste in the meat such as cinnamon. I still think their food is good, but I would put them barely in the top 50% of what’s available in my area and many others that I’ve been to as far as food quality goes. They only rank just above the other fast food chains, but below the fast food independents. I will say that their sauces suit my personal taste though.

I would replace “It’s the food, stupid” with two other reasons for success. “It’s the marketing” and “It’s the business model”. Chipotle’s concept design as a “fast casual” themed restaurant instead of “fast food” made it a market leader (once McDonalds gave them the money to go national). They gave customers a better atmosphere to eat Mexican fast food, and they were the first in the market, something that is very important to be a market leader. At the time, this gave them a unique selling proposition, something else extremely important to success.

They are also “masters of the promotion”, and find ingenious ways to attract people to their restaurant on less than well known “holidays” such as Tax Day, April 15th, where many Chipotles handed out mock tax forms called the “BurritoEZ”, which customers could fill out for a free burrito.

The “green” building practice is also a function of marketing, as well as their emphasis on the integrity of their purchasing practices, which get’s promoted in their stores.

Their business model is another huge reason for their success. The single most important aspect of achieving an incredible growth rate is having a business model that offers an incredible return on investment. Partnering with a company with “unlimited” resources like McDonalds doesn’t hurt either, but that partnership wouldn’t have happened if Chiptle didn’t already have a business model that made it a great investment, in a segment (Mexican) that was growing fiercely. Another good example of a company whose marketing and business model overshadow the food they are so proud of is Subway. When you can return an investors total investment in 2 to 3 years, you are going to have a lot more investors interested in opening your concept. In Chipotle’s case, instead of franchising, they attracted McDonalds as a business partner, whose capital grew them from 14 stores to 500 stores. The food didn’t facilitate that, there’s plenty of better fast Mexican food out there. Neither did demand for their product, they were a very small chain when McDonalds got involved. Brilliant marketing and an attractive business model is what made them in my opinion.

You do have a customer database, don’t you?

Communication. In one form or another, it may be the most important thing that happens within a restaurant. Just like your employees, your customers need to know what is going on in your business. How do you communicate with them?

If there is one thing I try to get across to every business owner, it’s that no matter how great your product is, if no one knows about it, it won’t sell. This fact makes marketing your most important job as a restaurant owner. You have an obligation to yourself to build relationships with your guests, and to let them know, with plenty of notice, every special thing that is going to happen in your business. The most effective way to do this is by collecting contact information from your customers and building a customer database.

A customer database is made up of key facts about every customer that comes into your restaurant. Your database should contain first and last names and addresses of your customers at a minimum. Email addresses, telephone numbers, birthdays, and anniversaries can help you make easier contact with customers and tailor special offers to them. You may also want to know favorite dishes, dislikes, and what day you collected the information.

The biggest benefit of a customer database is giving you the ability to spend your marketing dollars on those most likely to come into your restaurant… I’m talking about those who have already been there. To many owners, spending their marketing dollars on people who already know about their business seems like a waste of money, but the truth is that the greatest potential for increasing sales lies with those who already know where you are located, what you sell, and how great a value it is. These are the people who take the least convincing. You already have a relationship with these people.

Think about it, if you were giving away free booze to attract people to your house for a party, who are most likely to come, complete strangers or people who have been to your parties before? Your business is no different. Convincing people to come back more often than they had already planned is much easier that attracting new people, whether it’s a house party or a restaurant.

By collecting information from your customers, you give yourself the means to invite them back more frequently, to try and make them regular guests. You have the opportunity to get them to come back when YOU want them back, not just when the mood hits THEM.

There are several ways to collect customer information. You can simply ask for it, hand out comment cards with blanks to fill in with their information, offer a signup for a “VIP” club, or collect information for a prize giveaway. You may also want to think about contacting other merchants in your area to see if they have customer databases they may want to trade with you. Someone who visits another business close to you is also likely to give you a try since they make regular visits to the area.

Once you collect your customers’ information, you have many options on how to use it. With email addresses, you have an almost free way to communicate with your customers. Not all customers have email though, and some that do may not respond to email advertising. Direct mail newsletters are another option you have to contact customers. Newsletters can be used as more than advertising, you can offer stories about your restaurant, your employees, and your customers. You may even want to start a “Customer/Employee of the Month” contest and publish the winners in your newsletter. Another option is good ‘ol fashioned direct mail offers. You can print a postcard with your latest offer or invitation to come to a special event. Since the people you are sending these print pieces to are familiar with your business, they are more likely to respond to your direct mail than a recipient from a mailing list you bought.

No matter how you communicate with your customers now, if you don’t have a customer database, you’re leaving money on the table.

Unique selling point – vol. 1

Excerpt from a forum post to an Indian restaurant owner: 

A unique selling point stays away from claims about “better food” and “better service”. Those are minimum expectations of your customers, not reasons to choose you over your competition. Sure, you may be able to get that very small market of people looking for Indian food by being the only Indian restaurant around, but you’ll starve to death if you’re depending on that market. Your market must be bigger and transcend your food. Good food and service don’t make restaurants profitable. They’re not even a necessary ingredient though they help. Having good management systems and marketing, then consistently meeting the expectations of your customers whether high or low is what makes restaurants profitable.

I’m not saying all of those points aren’t important to the success of your restaurant, I’m just saying none of them provide your target market with a reason to go to your restaurant over the one down the road.

People DO NOT buy products, they buy emotions. A USP expounds on whatever emotion you are offering to your customers. Talking about your food, and your chef will win over a small amount of people, but the majority of people are looking to get some sort of feeling by visiting your restaurant, or in anything they do for that matter. If you market correctly, whenever they are in the mood to feel the way your restaurant makes them feel, they will think only of you, because your USP is truly unique. Now, you have to decide what feeling you want your customers to associate with your restaurant. Something unique to start. Then you do ONE THING (or more) that none of your competition does and give them that feeling you are selling them. Then, they’ll remember you and you’ll have a competitive edge on your competition. Then, your target market grows past people that just want great Indian food, to people that want to feel the way your restaurant makes them feel.

Think more along the lines of some of these feelings other restaurants sell:

“I’m selling stature, not food.”
Roll out a red carpet. Use crystal glassware. Real silver. Have a valet. Call every guest by name. Make sure the name of the restaurant suggests “stature”. TELL your customers visiting your restaurant will impress their friends.

“I’m selling speed. Not food.”
Offer fast service. Put a time limit guarantee on getting your product to them. Arrange your restaurant to cut steps out getting food to the customer. Have your restaurant’s name suggest “speed”. TELL your customers you are the fastest place in town to eat.

“I’m selling sex. Not food.”
Hire attractive waitresses. Dress your waitresses in short shorts and tight tops. Teach them to flirt. Name your store a sexually suggestive name. TELL your customers it’s the place to go to be waited on by beautiful women.

“I’m selling nostalgia. Not food.”
Collect memorabilia from a certain era or genre. Display it in your restaurant with stories about the pieces. Decorate the store in the style of the era or genre. Give your restaurant a name that suggests “nostalgia” for that era or genre.

“I’m selling accomodation. Not food.”
Encourage your customers to customize your menu items. Allow substitutions and many choices. Adopt a moniker that says you’re accomodating and market the heck out of it. Use a name that implies “accomodation”.

“I’m selling fun. Not food.”
Build a playground in your restaurant. Use cartoon characters and marketing partnerships with kids movies in your menu selections and marketing. Use colors in your restaurant that appeal to kids. Use a name that implies “fun”.

Well established brands realized long ago that only a few people come to them because they like their food better than any other restaurant. They know that people have to be thinking about you when they’re hungry to keep you at the top of their mind when they’re thinking of places to eat. They know that feelings and emotions create stronger memories and associations than any of the 5 senses.

What are you selling? If it’s food and service, don’t expect too many people to get very excited about it. They can get that anywhere.

How should I go about marketing a New Year’s Eve event for a fine dining restaurant?

Have you taken advantage of your four walls and table tops to market this event? How about the wait staff? Price the event so you can offer five dollars for each reservation a member of your waitstaff brings in, guaranateed with a credit card. Market the event with table top print pieces and wall posters at your front door and in the bathrooms. Don’t forget to have an easy system for signup near the posters, and slips for the waitstaff that have spaces for all the information they need to collect.

If you have good day to day traffic in your restaurant, you should be able to fill up reservations by the wait staff selling them. You can also try radio spots. I don’t suggest radio for everyday advertising, but for special events they can work. Try a spot three weeks out, running in a good time slot for a couple days. Repeat the ad for several days start 4 to 5 days before the event.

Anyplace with a community calendar is a good spot to advertise also. Look to see if the newspaper is doing a specials New Years piece in the Entertainment section. Check for local magazine that the community looks to for entertainment information.

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