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

Podcast: How Pablo & Rusty’s Coffee Became a B Corp Business

I recently met coffee roaster Saxon Wright, to hear about Pablo & Rusty’s recent certification as a B Corp. Specialty coffee seems to lead the way in the beverage industry with its focus on sustainability from grower through to consumer. B Corps ‘aspire to use the power of markets to solve social and environmental problems’, and the Silver Chef group is a proud member of the worldwide B Corp community.

We discussed the growth of the business, their commitment to sustainably sourced produce, and the additional B Corp priorities of environmental action, improved employee conditions, customer and community support, accountability and transparency. Even coffee waste is being imaginatively re-used with their Huskee Cup project. The company is growing fast, and Saxon sees the focus provided by B Corp standards as an important part of their success.

>> listen to the Podcast online, or look for Profitable Hospitality on iTunes or Soundcloud – there are more than 240 podcasts to choose from!

Great Win by Club Toukley for the NSW Chef’s Table Award

We’re still grinning with satisfaction for the winners of the ClubsNSW Chef’s Table Award – Club Toukley RSL. Chefs Kurt Sonneman and Alex Patterson, with GM Trevor Haynes and all their team are over the moon. It’s the culmination of more than 12 months developing and launching their Ziva eats and pizza concept… and yes, they are Profitable Hospitality members.

Great to have the Chief Judge Julio Azzarello’s input into our article on How to Win the Chef’s Table Award – just sayin’….

Here’s a souvenir video from the event:

Is Facebook Workplace the Employee Intranet That Restaurants Need?

Facebook Workplace looks like a simple, inexpensive way to improve internal communication in your cafe, bar or restaurant. It has that very familiar interface – who doesn’t understand likes, photo posting, events and the newsfeed, and it runs out of a separate app. You don’t use your personal Facebook profile to sign-in, that’s done with a new company-based identity.

Here’s the official Facebook explainer and of course there’s a ton of helpful information on the Facebook Workplace site.

I recently heard a very enthusiastic endorsement of the product by the General Manager of Club Med ANZ – you can hear her talk about it on the Tourism Upgrade podcast, and also in this video.

Update: another interesting article on a company’s experience with Workplace over 6 months.

Issues to consider, for and against:

  • Familiar look & feel means posting is more likely – one of the biggest drawbacks with non-standard intranet sites is that they are ignored.
  • Low cost – USD $3 p.p. per month, with a free version that’s ad-supported. That’s a lot or a little according to the value you place on this type of communication.
  • Does not have the other features needed in a full-featured employee site eg document storage, policy explanations, communication options. That would still be needed.
  • You’re using ‘rented land’ instead of your own site – Facebook has a habit of making changes to all it’s properties, and you get no say in it.
  • Private discussion groups can be set up for selected members , if needed.

Definitely worth exploring – maybe with a small group of employees who would give honest feedback and champion it if you went ahead…

Preparing for RU OK? Day on Thursday 14th September

The momentum for RU OK? Day is growing each year, and with the recent focus on mental health in the hospitality industry, particularly with chefs, we will be highlighting the issues and suggested solutions over the next few weeks. And it’s not just for one day – the RU OK? themes are important all the year round.

The action steps are simple: Ask, Listen, Encourage Action, Check In. This is working on the individual level, and there are also many things that can be done in the workplace to make it less stressful and more supportive.

Here are some Profitable Hospitality podcasts that may be helpful for you or your staff – listening to something privately can be a great first step…

50 Things You Can Control Right Now…

If you turn on the news, it’s easy to feel helpless and despondent. Or maybe things at home aren’t going in the best direction.

This great list reminds us of all the things that we CAN control right now – here are a few that jumped out for me:

Whether you listen or wait to talk (I’m working on that…)
The type of food you eat.
How much time you spend trying to convince people you’re right.
How clean or uncluttered you keep your space.
How much information you get before you make a decision.
How many negative articles you read.
Which commitments you keep or cancel.

Check the list and share with friends and family…