Simple, low-cost Recipe Software – this looks just the ticket!

I found CookKeepBook through a social media mention, and it seems to have all the functions for recipe software that an independent operator needs. For many years we sold Profitable Recipe Manager, and its combination of simplicity and accuracy helped thousands of businesses control their food and recipe costs. Since retiring that product a few years ago, I’ve been looking for an inexpensive, cloud-based alternative.

There are some excellent high-end products such as Cooking the Books, MasterTracker, Menu Coster, Hospitality Genie, the less expensive Fillet, and the venerable CalcMenu and Resort Software (waiting for them to go cloud-based), with integrations to POS systems, invoices, ordering and bookkeeping. Many of these are loaded with features, and fairly expensive for a small operator – no-one escapes subscription pricing these days!

In my experience, most people want a simple solution that can be used anywhere – PC, Mac, iPad or phone. They know that every time a recipe is costed, there will be surprises – sometimes good, usually not! The process should be as simple as: 1. enter the ingredients, 2. write the recipe and 3. create a costed recipe to print or share on iPad for daily use. When ingredient costs go up or down, changing a price adjusts the costing on all the relevant recipes.

CookKeepBook seems to have all that’s necessary for daily use, with a free version (not just a trial), and the annual cost to include a lot more features is only $69. I’ve been in touch with the developers and they are responsive and working on regular updates and new features. Highly recommended!

7 Small Ways You Could Be Leaking Money

None of these is major, but each week they soak up cash and cut into profits. Part of the fix is showing staff that every cent counts and you do watch the cents! They can be an active part of the solution, not standing on the side watching. Every single member of your staff could point out something that’s ‘leaky’ and wasteful – do they tell you? Do you ask?

  1. Late to Arrive and Early to Leave. You know who they are – the commitment of these employees is questionable. Other staff notice, and watch if you do anything about it. Finger or facial recognition clocking on and off is inexpensive to set up and integrates with payroll – if you haven’t done this already, it’s time.
  2. Dripping Taps and Running Water. In many venues, water down the toilet is more than half of the total consumption. Plus spray arms in the kitchen that use way too much and cleaning routines that use it like it’s free. Work out your water bill per day to show staff the real cost . Energy use consultants can be very useful to check this and other utility costs, and always pay for themselves.
  3. Coffee and Milk Waste. A few grams of lost coffee every time the dose is done – it adds up to big money each week. Plus all the milk that’s been overheated and can’t be used again for coffee – does it go down the sink? Ben Armstrong, the smart operator at Three Bean Espresso in Newcastle collects it to make their own yoghurt – they are now self-sufficient. Clever!
  4. Colour Printers – they’re money pits if you are still using a ‘cheap’ ink-jet printer. Really, do you need to print in colour, or would a low-cost black & white laser printer do for 95% of the printing? Or have both and set the default to the laser printer. Add up your ink cartridge purchases and divide by the number of days – the figures can be scary.
  5. Credit for Goods You Returned – this is one of the first things I look for when I’m doing a ‘costing blitz’ in a business. It’s not uncommon to return goods that are the wrong brand, size or not needed, but has the credit appeared on your statement? What’s the process to ensure this happens every time? Easy to overlook.
  6. Credit Card Fees. What’s the ‘effective rate’ your provider is charging? They create confusion with base rates and extra rates for different types of cards. Add up a month of charges and divide by a month of card sales – if it’s above 1.2% it’s time to talk with the bank manager.
  7. Back Door Dealing. In the rush of deliveries and a busy kitchen, it’s easy for delivery people to be unsupervised and cages left unlocked. Food and alcohol is as good as currency for many people – it needs a range of measures to control this including patient checking (you need the right person for this), cameras, tighter key access and storage routines. When did you last catch a thief?

What Profits Are Used For: An Explanation for Restaurant Staff

Sales – costs = profit. It’s simple. If profits are good, there are more smiles and generosity – the fundamentals of hospitality. If money is tight, there’s not much for extras, and shortcuts will usually cut into service and quality.

It’s easy for staff to misunderstand the profitability of a business – they assume that you’re making money on the first coffee sold on Monday morning, and it’s $3.50 profit on the $4.00 price. The financial literacy of staff is another training topic, but in the meantime it’s good for them to learn more about business essentials…

So why are profits so important?

  • Profits mean more tax is paid – which pays for schools, roads and hospitals. If the tax rate on business profits is 30%, that’s $300 paid for every $1000 of profit. No profit = no taxes.
  • The business can afford better (and often expensive) kitchen and coffee equipment, which is usually easier to use.
  • They can afford better-quality ingredients instead of always hunting for the cheapest.
  • Profitable businesses can pay for good uniforms, not cheap ones. Or provide them for staff instead of insisting they use their own.
  • Profitable businesses can afford professional cleaning, so the place sparkles everywhere. They also buy flowers, quality furnishings and good tableware – small things that add up.
  • Pay for staff training and offering staff opportunities for staff development. Hard-up businesses never do this.
  • Profits allow for business expansion, which means more people employed and more opportunities for promotion, and work for your friends.
  • The boss is more likely to take staff to a trade show and dinner afterwards, or take all the staff to the restaurant awards dinner.
  • Managers don’t stress if someone has time off for urgent family reasons – they can afford to be generous.
  • A profitable business shows staff how to operate successfully – a great learning opportunity if they have dreams of their own restaurant in the future.
  • Profit gives the business a value, making it easier to sell. A business that’s easy to sell is usually fresh, lively and popular.

…and finally, a profitable businesses can give the boss a good holiday – making her more generous, smiling and easier to be around!

The ‘Stage 2’ Error That Can Fatally Weaken a Cafe or Restaurant

A conversation with a new operator during the week got me thinking about a classic and potentially lethal startup mistake: Stage 1 and Stage 2 thinking.

This approach basically says “let’s get this new place open as quickly as we can, even though we don’t have enough money to do it properly. After a few months when we are profitable, we can afford Stage 2 and get the job finished.”

Stage 2 items include things like:

  • A modern website that will compete with the best in the area, with some great photography to attract social media attention
  • Co-ordinated and regular marketing – interesting social media posts, responsive to reviews, developing an email list, and a calendar of promotional events
  • Professional decoration that makes an immediate impression – not just secondhand, DIY and IKEA
  • Plenty of refrigeration and storage space, including a coolroom, so you can buy in bulk
  • A properly-fitted washup area, so kitchen staff can do the job quickly
  • Cost-saving kitchen equipment like slicers, food processors, a salad bar and a properly-tiled floor that’s easy to clean
  • An effective and easy-to-clean kitchen exhaust system – proper filters, easy-access ductwork, and a regular maintenance program. Otherwise it’s a fire just waiting to happen.
  • An efficient and well-equipped counter with great beverage systems – not just the free-on-loan Coke fridge. Fortunately, a quality espresso machine is usually a Stage 1 choice
  • Staff facilities – lockers, a change area and plenty of regular training
  • Staff recruitment and rostering systems – to attract the best and minimise wage costs
  • Correct staff wages, with all the legally-required benefits
  • Well-trained and experienced staff. Most of the best people actually don’t want to be part of a startup, because they know it’s messy. But after a couple of weeks that’s forgotten.
  • Bookkeeping system (like Xero) and someone dedicated to run it, to accurately and instantly track income and expenses

Unfortunately, the lack of these essential Stage 2 items fatally weakens a business from the start, so the great profits expected when you open  with Stage 1 never come to pass. Most Stage 2 items are essential for a healthy bottom line.

You’re overworked and tired, just managing to pay expenses, and the profits to finance investment aren’t there – it’s not long until you’re looking for the exit. Unfortunately businesses stuck in Stage 1 don’t sell for much, and there are lots of them on the market. Invest carefully.

Alimentari in Melbourne – getting it so right from the beginning…

Simplifying Business – a Good Theme for 2018

Simpler is usually better. Processes can be done more quickly, there are fewer costs, fewer moving parts, less need for highly-skilled staff, and fewer mistakes – this is not about ‘dumbing down’. Make SIMPLIFY your theme for 2018, rather than a list of ‘resolutions’ that are soon forgotten.

To get started, make a list of things that seem to be complicated and difficult. Ask your staff – they’ll have plenty of suggestions! Here are a few more…

Simplify your Website, and be especially conscious of how it’s seen on a mobile device. The key information people want are phone number, hours of opening and address – are they easy to find? Have common inquiries on a Frequently Asked Questions page eg function information, menu variations, group sizes etc…

Simplify Customer Bookings – usually they don’t want to call, but just book online. Time to join one of the booking services or add a simple form to your website – the small cost of fees will be more than covered by increased customer numbers.

Simplify Recruitment – standard job ads, an automated application process with a web form (check Wufoo) and SMS responses, standardised interview questions and a set induction process. Maybe a little bit of work to setup, then it will flow smoothly.

Simplify Rostering – get rid of the paper roster and clunky spreadsheets. Online systems like Tanda make it easier to design and cost your staff schedule, and notify staff. Also cuts costs – you can tell hour by hour how much staff are costing you each week.

Simplify Recipes – how many moves or touch points are involved in each dish? Is that justified by the price and staff skills you have? This is not about removing style or flavour, but making it easier to serve quickly and economically.

Simplify the Menu – a useful report on your POS shows the best and worst selling items. Check it over month so there’s plenty of data. How many of those slow-sellers can be removed and no-one will notice? Can garnishes and ingredients be used across more dishes? How many individual food items do you keep in stock – it might be a surprise!

Simplify the Wine List – apply the same ‘best and worst seller’ process to your beverages. This can lead to big, big savings – cellars can easily balloon into massive investments if you’re not careful.

Simplify the Bar and Front Counter Setup – make it easier to serve, especially when it’s busy. Have equipment and supplies in their logical place – run what used to be called a ‘time and motion study’. Staff can do a lot of this for you…

Simplify Purchasing – start to deal with suppliers who allow you to order online and work off agreed lists. Simpler, and easier to do price comparisons. Some small operators are slow to embrace this – remind them that this is 2018, not 1998.

Simplify Payments – ready to be radical and eliminate cash payments?! It’s been done by a few businesses, and they’re loving easier POS systems, greater security and simpler end of shift reconciliation. It’s coming…

Simplify Bookkeeping and Accounts – online services like Xero put all your bookkeeping on a web page, accessible from anywhere. There are a raft of skilled people who can help set this up – the cost is more than covered by savings on business expenses, tax filing fees and the daily access you have to the real state of your business.

Simplify your Text Messaging Routine – I’ve seen so many owners and managers who are dominated by random and unnecessary messages from staff and suppliers. Set some new rules…

Simplify your Daily Routine – how is it now? One hint – don’t start the day by checking emails – it will dominate your morning.

What else can you do to simplify business? Watch for updates on this list…

How to Measure Restaurant Kitchen Costs and Efficiency

There’s a business saying: ‘if you can’t measure it, you can’t manage it!’

Smart managers need reliable and accurate figures on which to base decisions. If there are problems, you can take corrective action quickly. If you are having success, you’ll know what to do more of! They also give a fuller understanding of what happened – if it’s a quiet month (when  suppliers are telling you ‘everyone’s quiet!’) you may see that some of your KPI’s have improved (eg sales per-head) because you’ve doubled down on service. Well done – its not all doom and gloom!

Here’s a list of KPI’s you’ll want to watch for the Kitchen…

Food Cost % can be measured quickly by adding up food purchases for the week and measuring them against your food sales. This is based on the assumption that you are not holding much stock (as it’s perishable, you need to sell it or throw it out!). You may also do a stock-take regularly to get a more accurate food cost percentage, although the burden of kitchen stocktaking often means it is not done very often.
Total Food Costs – how much was your total food bill? Sometimes a useful figure to show staff who think you are made of money!
Food Costs per-head. It can be useful to see every week how much it costs to feed an average customer – this is an easy figure for your staff to understand. If your menu and sales style is consistent, this should also remain much the same. If it starts to go up, you will have to find out what’s happening! To measure this, use the total amount of food purchased and divide by the number of customers. eg $3000 of purchases divided by 600 customers = $5 per head food costs. If you work out an accurate Stock Value (see below), use that figure instead of purchases.
Kitchen Labour % – it’s only fair to measure kitchen productivity by comparing kitchen labour cost against food sales, not total sales (alcohol and beverage sales may be influenced by other factors).
Kitchen Labour Hours – how many hours worked in this section? Compare against sales to measure productivity, and divide total kitchen labour cost by the number of customers – it can be surprising.
Stock Value – how much food stock are you holding? It should be less than a week’s use, but can slip out if you are storing frozen seafood or cryovac meat. Opening Stock + Purchases – Closing Stock = Cost of Goods Used.
Best and worst selling items – check the weekly sales from your POS or dockets. Do you know what the best sellers were? Should some of the worst sellers be removed?
Kitchen linen costs – the cost of uniforms, aprons and tea-towels can be a shock! How many tea-towels are you using each day? (thought about laundering them yourself?).
Food waste by weight – if you’re watching waste carefully, it’s possible to measure how many bins or kilos you’re throwing out. When it becomes a focus, it’s interesting to see how this can be reduced.
Fuel and water costs – sometimes these can be measured separately for the kitchen. If so, watch the ups and downs, comparing to the number of customers served.

Which of these figures can you access quickly, and which ones are the most useful?

Payment and Ordering Systems seen at the Fine Food Show…

Credit card processor Tyro were at the recent Fine Food Show in Sydney, well known for their POS integration and keen pricing. For the very small operators, note that you can buy now buy a Square system from Officeworks for $25!

A quick win for every operator is to get onto the merchant services department of your bank and ask for a  rate review – most people don’t even know what they’re paying. Your challenge is to get it below 1%, averaged across all Visa and Mastercard transactions. It can be done.

Order management for the delivery economy had some interesting services on display, especially for people who want to avoid the 30-35% fees charged by Deliveroo, UberEats and the like. Systems like Orderup are now well established  – you can set up an online ordering system on your website with your own branding.  Foodstorm is a similar system  that allows for a white-label ordering setup – it’s more for caterers and has a great reputation. Drive Yellow is a new service that will handle your delivery logistics – another option for reducing hefty commissions. They are the delivery service for MenuLog.

Several generic kiosk systems were on display – McDonalds is educating us about these and many more options will become available. For now, they’re a bit clunky and tied to their own POS system, which limits usefulness. The suggestive selling architecture of these systems is what will make the winning difference.

Also impressive was Ordermentum  – tying suppliers and businesses together for easy ordering and fulfillment.

It’s a dynamic and competitive field with new players and constant innovation…

Another day, another story of restaurant fraud…

Trusted, helpful staff given too much responsibility by weary owners, and a lack of systems for proper checking. How many times do operators make ‘trust’ their default mode with employees, instead of ‘check and verify’. When you work with cash, food and alcohol and have haphazard security, the thieves will soon find you. It was a bit sad to go through ‘the facts of life’, again, with a couple of new cafe owners…

Your Point of Sales system can be a key element in taking back control. Watching for error corrections and inaccurate use of PLU keys will soon alert you to problems – here are a few to watch:

Open Key – the one that’s used when you can’t find the one to use. A new menu item that hasn’t been added to the system, or there’s a rush and you can’t find Prawn Salad. Disable this key or make strict rules about who can use it – it’s wide open to abuse, and spoils the accuracy of sales data for stocktaking.

Voids, cancels and errors – all slightly different, and can be used to negate an order that has already been made. The end-of-shift report will show how many of these are done – they should be rare and explained.

Over-ringsOMG I ordered 10 salads instead of just one – I’ll tell the kitchen and fix it later! Maybe it wasn’t corrected, and the end of shift sales totals won’t balance with the till. In the struggle to reconcile, it’s easy for deliberate errors to be missed.

Training key – it’s there for training staff on the POS, so their practice transactions aren’t part of the shift totals. But it can be abused – I’ve been given a bill with a tell-tale letter T beside each transaction, and there was definitely no-one being trained.

More on restaurant security in my podcast interview with the Crime Doctor on How to Reduce Employee Theft in Restaurants.
Trust..and verify.

How to Get Restaurant Wage Costs Down to 20%

There was an audible gasp and some alarmed looks when business accounts expert Trudi Yip told our Smart Operator workshop that 20% wage costs are achievable. In a restaurant or cafe. With Australian wages.

I received a couple of concerned emails the next day about this figure, and asked Trudi to explain her bold statement. It fitted in with the final part of her presentation when she reminded us of the importance of sales building to manage business costs. Fixed costs (rent, insurance, interest etc), fall as a proportion as sales rise, but wages are a variable cost – they go up and down according to how busy you are. Do you want to stick with the ‘typical’ restaurant wage figure of 43-45%, or go for the 20% challenge – the difference goes straight to your pocket.

Right now, you could:

  • Start using real-time cloud based rostering, so you know to the minute what your wages are during the week. No more rear-vision-mirror management – when you find out your costs after it’s too late. Tools like Deputy, Tanda, ZenShifts or Hot Schedules are worth exploring, and cost surprisingly little.
  • Take a hard look at the days or day-parts when your sales are low and wage costs high – do you really need to be open?
  • Get the manager and chef doing their own costed roster – give them management access to the rostering system, and set a budget they can’t exceed – ‘chef, you have $4000 for the week to cover all your staff costs – how will you organise it?’. You’ll be surprised what they can do.
  • Rethink the food you make from scratch compared to what you can buy in – lots of quality options available.
  • Update to labour-saving equipment – eliminate more of the tedious hand work.
  • Cross-train staff between kitchen, bar and front-of-house. You’ll save wages if the bar guy can help out with dishes, or a waiter can restock the bar… instead of calling in an extra person. It requires skills training plus a shift in attitude.
  • Say goodbye to your least productive staff member – the one you’ve held onto for too long. Everyone else carries them – do they need to be replaced?

We’ll leave sales growth for another time – plenty of information at Profitable Hospitality on that.

photo courtesy of brandeemeier