April 21, 2022
by Aisha West / April 21, 2022
In the competitive culinary field, effective restaurant management can mean the difference between another daily special and last call.
A restaurant has many moving parts and people – from custodial to kitchen to front-of-house to administrative. Precise restaurant operations management is key in keeping all aspects running smoothly to ensure every restaurant's end goal: customer satisfaction.
Restaurant management encompasses all aspects of a restaurant’s operations. This includes hiring and training staff, collaborating with the owner, doing payroll, marketing the business, keeping on top of inventory, maintaining the building for a healthy environment, satisfying the customers, and being ready to handle the unexpected.
Considering the amount of work, choosing reliable restaurant management software will streamline the process of restaurant management and lessen the workload of the staff.
The restaurant business is highly competitive. In 2020, there were 186,290 quick-service restaurants and 134,310 single-location, full-service restaurants in the United States.
Excellent restaurant management allows businesses to keep supplies stocked, do payroll on time, schedule employees appropriately, and market in a way that rewards loyal customers and brings new ones to the table. All of these tasks are done while planning for long-term success.
Any hitches in the restaurant’s operations can prevent the business from making the customers happy. This is precisely why restaurant management can be the difference between success and failure.
There are certain best practices that every restaurant manager should follow. These include maintaining healthy relationships among staff, tracking inventory, practicing open communication with the owner, and keeping costs low.
A major key to successful restaurant management is hiring and training the right staff. The restaurant owner and manager must work together to create effective criteria for hiring, which may include experience, personality, and availability.
Once the staff is hired, training should begin immediately. The management of a restaurant should develop standard operating procedures for each job’s role, and owners, managers, head bartenders, and head chefs should all be prepared to train new hires.
Effective restaurant management will ensure that each staff member has the tools and knowledge to perform their duties well, and often with little supervision.
Proper hiring practices help guarantee employees will serve customers as well as possible and also help mitigate staff conflict. But there will be times when people don’t get along. Restaurant management means having protocols in place to quickly and fairly resolve conflict.
Turnover rates for restaurants are high – around 75% of employees are likely to leave a restaurant business before a year’s time. Savvy restaurant management means recognizing the importance of staff and implementing strategies like free meals, discounted drinks, and fair compensation to avoid employee turnover.
Developing solid relationships with vendors, regularly taking stock of restaurant supplies, and encouraging staff to be mindful of goods are the primary objectives of restaurant inventory management.
A restaurant's inventory list can be daunting: food, beverage, liquor, kitchen appliances, and supplies, tableware, paper products, and miscellaneous items like light bulbs and garbage bags.
It's difficult to stay on top of all necessary supplies, but efficient restaurant management ensures that the restaurant remains stocked at a reasonable price and avoids missteps that might lead to deficiencies. Thankfully, there are plenty of reputable restaurant inventory management software platforms available.
These platforms help restaurant owners and managers find areas where food or other supplies are wasted. They can strategize together to come up with ways to avoid waste in the future.
The owner and the restaurant manager will also research vendors to find ones that offer the best price without compromising quality. They use their inventory management software to stay on top of ordering and payment – expert restaurant management doesn’t let bills go unpaid.
Restaurant owners are always looking to cut costs. The average profit margin for a restaurant in the United States is 3% to 6%, so planning a tight budget is an invaluable aspect of restaurant management.
Labor costs include salaries for full-time staff, as well as hourly employees. Depending on the restaurant's operations, labor costs may also involve benefits, overtime, or paid time off. Calculating labor costs is simple: divide the total wages by the total sales. Twenty-five percent to 35% is a good goal to work toward for most restaurants.
Labor costs = Total wages / total sales
Everything on a restaurant’s inventory list, plus rent, utilities, labor, technology expenses, maintenance, and more, is part of the business’s budget. It’s imperative that restaurant management works to keep costs low and profits high. Budgeting and forecasting software can prove to be an invaluable tool.
There are a few ways modern restaurant management can determine menu prices. One method is shown below.
Price = Raw food cost of item / ideal food cost percentage
A healthy food cost percentage is anywhere between 28% to 32%. For instance, if a restaurant management team decides that they will aim for 30% and the raw food cost is $2 for a grilled cheese, plugging in the formula is like so: $2.00 / 30% = $6.67. A grilled cheese at that restaurant will cost $6.67.
Working out pricing per plate can also help manage food ordering and food waste. In the equation above, if the restaurant manager or head chef has ordered $200 worth of inventory, they will be able to sell that item 100 times. When that inventory runs out and if they use their point of sale (POS) system only to find they sold that item 75 times, this may be a sign of spoilage, waste, or unfortunately, theft.
Some places use more traditional methods, rather than exact calculations. Examples include basing prices on neighboring restaurants, following in the footsteps of the most popular establishments, or trusting intuition that comes with experience in the restaurant industry.
Knowing the owner’s personality is a part of useful restaurant management, and using this knowledge will ease pricing decision-making.
The menu is an essential aspect of restaurant management. Menu creation is determined by the chef, seasonal and special items, and each dish's popularity.
The best restaurant point of sale (POS) software the front of house uses should have information about food and beverage sales trends. This facet of restaurant management allows the owner or chef to make menu changes based on that information.
Menu creation will depend on the chef’s personality and the relationship between the chef and the restaurant. Some chefs are very precious with their dishes. This is where personality management comes into play.
The restaurant owner or manager will have to balance frugal decision-making for the restaurant with maintaining a positive relationship with the kitchen staff.
Some chefs or restaurants like to keep a permanent menu. Restaurant management software can help decide whether some items should be retired to allow new dishes to take the spotlight.
As covered above, some places haven’t changed their menu since the day they opened, but it’s become fairly popular to change menus based on the season. Restaurants will utilize the chef’s talent to drive changes and encourage front-of-house staff to listen to guests’ requests for seasonal dishes.
Some restaurants change even more frequently based on what the chef buys at the farmer’s market, for instance. But smart restaurant management means making sure these fun, creative changes still result in appropriate sales.
Restaurant management has to have an advertising plan. Inexpensive or free social media content helps spread the word for many restaurants, but marketing strategies can also include old-fashioned techniques.
Restaurant management has to account for every dollar, and since social media marketing is either free or inexpensive, many restaurants engage with customers and potential customers as a part of their advertising methods.
A social campaign can announce specials or events and even help the restaurant establish a brand or personality. Social media is a part of restaurant reputation management, so all posts and interactions with customers online should remain friendly and polite.
Clever restaurant management recognizes that the business is a part of a neighborhood and will take advantage.
For example, if the restaurant is close to a school, many owners will offer discounts to teachers to bring them in after work. Part of management’s advertising vision should include how the establishment fits into its neighborhood.
Many restaurant owners and managers create regular events to draw people in and perhaps find more regulars. Trivia, open mic nights, and movie nights are all fun and popular events.
More refined events might include wine tastings, liquor flights, or culinary education nights. Management will know the restaurant’s brand well enough to design the right events and specials to boost sales.
The importance of building maintenance planning cannot be overstated. Cleaning, extermination, plumbing, heating, ventilation, and air conditioning (HVAC) have to run smoothly. Part of restaurant management is making a plan so that every level of employee understands their role in daily maintenance or emergencies.
Restaurant management makes sure staff training includes detailed instructions for cleaning “as you go,” as well as closing procedures. Some restaurants may hire maintenance workers for deep cleaning on a regular basis.
The restaurant owner or manager has to schedule regular, preventative extermination visits. Every restaurant staff member is responsible for reporting sightings of unwanted guests.
Plumbing is another part of maintenance planning that requires preventative care. Training staff to keep drains free of solids is a must. The owner or manager will inform the staff of protocol for emergency plumbing needs, such as clogs or leaks.
Restaurant management must figure out how to control the restaurant’s climate without breaking the bank. HVAC is expensive, but it’s absolutely necessary because a restaurant can’t satisfy customers when it’s too hot or too cold.
If a restaurant team is installing an HVAC system for the first time or revamping an old system, they can research the best HVAC software, which can help with job cost estimation and design solutions.
Restaurant managers can seldom say, “That’s not my job.” They serve as liaisons between owners and staff. They are the face of the restaurant. Managing a restaurant means being ready to jump into any position at a moment’s notice. Additionally, there’s behind-the-scenes work like inventory, ordering, and budgeting that they have to keep running.
Below is a non-exhaustive list of a restaurant manager’s duties:
A competent restaurant manager knows how to apply restaurant management protocol for every item on this list. They also have the confidence, creativity, and flexibility to deal with the many unexpected challenges that arise.
The challenges that come with restaurant management could easily be the subject of another long-form article. Nevertheless, here are a few of the most common obstacles restaurants face.
As mentioned before, a high turnover rate or inexperienced employees can hinder a restaurant’s ability to provide the best customer experience. Training the staff and keeping them happy allows them to make customers happy, which helps the restaurant achieve its desired bottom line.
The restaurant business is highly competitive. Good food and good service are just the beginning of restaurant management’s plan for standing out from the crowd. Knowledge of the area, familiarity with restaurant trends, and the ability to build a social media brand are all necessary to be a winner among competitors.
Even though POS systems can help owners and managers track traffic, the unpredictability of income will always be a challenge. A restaurant management system that encourages staff frugality budgets mindfully, and plans for slow periods will allow operations to continue functioning.
The range of a restaurant manager’s duties can be overwhelming for new and seasoned managers alike. Luckily, there are certain best practices that every restaurant manager should follow.
Restaurant managers serve as the go-between for anyone with anything to do with the restaurant. Therefore, they develop the confidence to communicate with anyone, whether they’re giving good or bad news. Avoiding conflict never helps; being upfront and kind often will.
Everyone goes to restaurant managers for everything, so they must be deeply familiar with all aspects of the restaurant – from maintenance to food service to POS systems. If there is anything a manager doesn’t understand, they have to have the humility to ask someone who does.
There are many ways to learn how to manage a restaurant, from free online restaurant management courses to four-year restaurant management degrees.
Most restaurant education schools teach day-to-day operations, administrative tasks such as payroll and scheduling, staff management, and more. Some programs offer internships or hands-on learning in restaurants so students can understand what running a restaurant is like.
Skilled restaurant managers ensure staff happiness, and they have to learn to extend that happiness to themselves. Setting boundaries, asking for help, and delegating tasks will enable a restaurant manager’s career longevity.
There are restaurant managers of all types. Some delegate as much as possible so the restaurant staff takes ownership and works toward managing themselves on a day-to-day basis. Some prefer to have their hands on everything.
All restaurant managers need to be able to take criticism and keep a calm head. A calm state of mind will come more easily by staying organized. A sense of humor helps when dining service veers off-course. The best restaurant managers practice taking nothing personally.
Standard operating procedures (SOPs) are detailed instructions for each task that needs to be done to keep the restaurant running smoothly. There must be a set of SOPs for every tier of employment: hosting staff, servers, bartenders, kitchen staff, and administrative.
Making standard operating procedures has many benefits for restaurant management. It would be almost impossible to properly train staff without an SOP. Training goes more quickly and there’s always a guide to refer to if something unfamiliar occurs during dining service. The restaurant’s SOP takes the pressure off management because staff will have the same answers the manager has.
The number of tasks included in a restaurant’s SOP is high, but standard operating procedure software exists to help management build or revise efficient and thorough SOPs.
Restaurant management software can help you run operations smoothly so that you stay organized and up to date with your business’s needs. Taking advantage of this software can give you more control over how your restaurant functions. It will also give you the headspace you need to have fun with the more creative facets of management.
To be included in this category, the software product must:
*Below are the top 5 leading Restaurant Management software solutions from G2’s Spring 2022 Grid® Report. Some reviews may be edited for clarity.
Toast does it all when it comes to restaurant technology. Toast assists restaurants with gift cards, loyalty programs, online ordering, and more, all on a mobile, cloud-based system.
“The backend analytics are invaluable. Integrations have been flawless in their implementation. The technology allows the ability to quickly adapt to a challenging time for the industry.”
– Toast Review, Wyatt S.
“Online ordering does not fully replicate POS menu. We’re unable to handle duplicate menu items in the same customer order. This is a big issue as it renders a key portion of my online menu unworkable for the customer.”
– Toast Review, Darren F.Posist Restaurant POS is a business-for-business company that helps companies transition from analog to digital systems for their restaurants. Used by over 10,000 restaurants worldwide, Posist lets operators grow their businesses effectively and satisfy more guests every day.
“We appreciate everything that customer service has done over the past few days since we have associated with Posist. The endless hours you have spent educating us and giving us on spot solutions and support, and the professionalism you have shown have immensely motivated the entire management team.”
– Posist Restaurant POS review, Abhishek D.
“A few of Posist’s options are too complicated and take a lot of time to understand.”
– Posist Restaurant POS review, Bhopal B.Lightspeed Restaurant helps restaurants simplify their operations, resulting in a better customer experience. Restaurant owners can interpret business-related data more easily using Lightspeed Restaurant.
“Lightspeed is one of the deepest restaurant POS systems out there. It has lots of features that other systems lack, and there's plenty of room to grow. Best of all, their support is amazing. They’re very proactive about customer success and open to new feature suggestions – they'll even get in touch to let you know they implemented your ideas! Always improving, always dynamic, never static.”
– Lightspeed Review, Astrid Y.
"There are some bugs from time to time, but most of the time, the support is really quick to fix it.”
– Lightspeed Review, Nina-Michele L.Restaurant365 is a Saas platform that works with POS, payroll, and vendors to give restaurant owners the tools they need to grow their businesses quickly using meaningful insights into the inner workings of the establishment.
“Having served as a CFO for multi-unit restaurant companies for 40 years, I have finally met a product that does everything I need. Inventory control, menu costing, inventory management, full financials, saving scanned copies, productivity, scheduling assistance, Excel output interface. Also, their help desk is amazing!"
“We wish there was a more detailed audit trail for certain transactions so we can track edits and coach our team when mistakes are made. We can only currently see the last person that modified. which isn't always helpful.”
– Restaurant365 Review, Katie R..Foodics is devoted to uplifting restaurants of all sizes so that business owners can run their operations without a hitch. Foodics is a POS and restaurant management system that makes it easy for restaurants to hit their bottom line.
“It is an excellent and complete software. Absolutely everything in one system, it allows you to manage all aspects of your restaurant. It has a great application that helps you in every way – very easy and very practical.”
– Foodics Review, Fernando O.
“The chances of developing and enhancing features based on customer feedback are close to zero.”
- Foodics Review, Ali A.
Restaurant management entails numerous and often difficult operational tasks, but without an effective strategy for management, restaurants put themselves at a disadvantage in an already unforgiving industry.
By staying on top of restaurant management basics like staffing, inventory, menu creation, budgeting, building maintenance, and marketing, restaurant owners can attain long-term success and longevity. Effective restaurant management keeps the essential goal of customer satisfaction well within reach.
Want more information about advertising and restaurants? Take a look at some current restaurant marketing trends.
Aisha West is an actress, writer, and Content Editor at G2. After graduating from the Experimental Theatre at Tisch School of the Arts at New York University, Aisha wrote, directed, and performed plays with Synaesthetic Theatre for ten years. She lives in Brooklyn with three tuxedo cats.
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