Change Your Restaurant to Avoid Insanity

 In 8. Guest Bloggers, Food Costs, SMART Systems

You’ve probably heard plenty of times that the definition of insanity is doing the same thing over and over and expecting different results, yet many restaurant owners find it easier to try to change the definition instead of how their restaurant operates.

The fear of changing how you do things is crippling for some restaurant owners, but you can take a few small steps to make sure you’re not one of the owners to constantly repeat the same mistakes and get upset when the results don’t change.

Getting started on completing or reviewing your recipe costing cards is one of the biggest tasks you can do to make real change in your business and lower your overall cost of goods sold.

If you currently don’t have recipe costing cards, you should start the project immediately. No, seriously, start today!

Start by gathering current pricing information from all your food and beverage vendors.

Next, double check with your staff and management team that everyone is on the same page in regards to how recipes are carried out. For example it’s a waste of time to do a recipe costing card for seafood bisque if it’s made a different way each time. Once you’re certain recipes are accurate, start building your recipe costing cards (you can make it extremely efficient with SMART Systems Pro, the restaurant management software that is part of your Membership with

If you’re one of the owners who already has recipe costing cards completed, it might be time to make sure all the prices are accurate and start building a menu profit generator file so you can see the areas or items that have inflated costs.

Taking the steps of completing/reviewing your recipe costing cards and making changes to your menu or recipes accordingly is a giant step in changing your costs of goods sold.

Generally I see the fear in restaurant owners when it’s time to use that information to raise menu prices. Increasing menu prices is a fear many owners have, but it is rarely warranted. If you continue to sell items that aren’t priced accordingly and expect your food costs to go down, you’re falling into the insanity trap.

Another great tool to use to make sure you’re working towards improved operations is an operational budget. Clearly stating what you plan to spend in everything from labor to garbage removal on a weekly or monthly basis can be huge for most owners or managers.

Unfortunately the restaurant business sees a very good amount of cash in and cash out. I’m sure every owner has had the conversation with friends or a regular at your bar about how they think you’re just raking in the dough because they only see the cash-in side of the business. Many times owners won’t even realize the magnitude of the cash going out of the business until they sit down and complete a full operational budget.

Getting the numbers into the budget is really only half the battle. The other challenge is holding yourself and your team accountable to the numbers that are in the budget. Proper inventories and labor scheduling can help control the numbers that go into making up your prime cost, but operational expenses are also important to monitor through budget variance reports.

Recipe cards, labor budgeting and an operational budget are just a few ideas on where to start with making change in your business, but taking action is the real objective to focus on when trying to change your business. Insanity creeps in when we merely carry out tasks to give us the information or justification we need to carry out our decisions within our business. Without making educated decisions or no decisions at all, you can find yourself falling into the trap of expecting things to change without justification.

By taking action and trusting your numbers, you can make sure you’re investing time and energy into changing your business’s reality instead of trying to change the definition of insanity.


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