Strategic Planning Tips for Restaurant Owners and Managers

As a restaurant owner or manager, what is your main goal? Of course, profitability is up there (and may even be #1), along with building a reputation that retains loyal customers. It’s every restaurateur’s dream to be the new hot destination for delicious fare and an attractive atmosphere. And it’s also wise to look at the bigger picture to determine how you’ll keep your wheels turning year after year.

Although there are hundreds of thousands of restaurants in the United States alone, it’s possible to approach the top tier of eateries with the right combination of data quality management and an impressive operation spanning from staff efficiency to food quality.

Data quality management simply means collecting the best information available and keeping it up to date. To do so, you should run reports often in order to keep tabs on all aspects, from sales to inventory levels and most popular items.

For a restaurant, there are plenty of tools out there that can help you keep tabs on all aspects of your business. Point of sale systems, like Toast or Upserve for example, do just that. They have extensive reporting capabilities that span from your transactions to your inventory and overall staff efficiency.

With good data and a firm understanding of your business goals and needs, you can make decisions that can potentially catapult your restaurant to the “must go” list for everyone in your surrounding area.

In this blog, we’ll discuss ways you can take a deeper look at your restaurant’s operations, and ways to improve on those operations, in order to set yourself up for success.

Start with SWOT Analysis

A SWOT Analysis is an exercise to determine your restaurant’s Strengths, Weaknesses, Opportunities, and Threats (hence the acronym SWOT). When performing a SWOT, you should look at both internal and external factors to get the best picture of the current state of your restaurant.

Among your strengths may be the popularity of your food, your marketing strategy, and your managers’ years of experience. Use these to propel your business forward, constantly maintaining (or improving) what your company is already good at. This is your angle that can help edge you ahead of your competition.

Weaknesses may begin with an inability to extract, analyze, and use the data at your fingertips. They may also include the inability to stay on top of industry trends, an issue with keeping track of inventory, or constant turnover of wait staff. Retention is tough in the restaurant business, and paying a premium for good, experienced employees may pinch the bottom line but result in significant long-term returns by retaining customers.

Opportunities can include business visibility through online reviews, the chance to grow your social presence, growing your online presence, and leveraging your loyal customers through word-of-mouth and marketing campaigns.

An easy way to act on an opportunity, like your online presence, is to have a clear strategy for responding to your reviews, both negative and positive. This is low hanging fruit that doesn’t take too much effort.  Of course, another opportunity to take control of your online visibility is by working with a menu management company like SinglePlatform. With 97% of people finding businesses through a search engine, this is key to attracting new customers.

Threats to your restaurant may include nearby competitors, an inconsistent social media presence, negative reviews, or poor staff management. You should pay special attention to these threats because they are the most risky factors that can tour your success sour.

Putting SWOT to Use

After putting together your SWOT Analysis, begin to create an action plan for business improvement. Determine which challenges you’ll tackle first and map out a timeline with goals and checkpoints. Without having a solid plan in place, you may push your responsibilities to the side in order to solely focus on the here and now instead of the future.

Start off by determining how you’ll improve on your weaknesses. Your weaknesses are your biggest hurdles and the elements that pose the most difficult challenges to your business. Then, focus on how to combat your threats.

And of course, don’t just focus on your threats and weaknesses. You should make those top priority, but don’t forget to continue to fortify the areas of your business that make you shine. Your strengths should be consistently monitored, and if needed, improved over time.

Competitive Analysis

Once you’ve examined your business inside and out, put a laser focus on your competition. After all, the surrounding restaurants with similar concepts are probably some of your biggest threats.

Make a comparison list between your restaurant and those of your competitors. Determine what you do better and what they exceed at. Analysis can include pricing, menu items, location, staff, and more. Be brutally honest in this appraisal, don’t just downplay a competitor’s strengths to make yourself feel better.

Putting Competitive Analysis to Use

If there’s something that a competing restaurant does very well, think about how you can put your own spin on it and use it in your own business.

Say their printed marketing materials are more eye catching than yours – consider hiring a graphic designer to help you take your brand to the next level. Or maybe they’ve got an enticing curb appeal that magnetizes passersby. Consider investing some budget into making your exterior more attractive.

From this competitive analysis, you will discover more areas in your restaurant in need of improvement in order to stay ahead of your competitors. It’s better to be aware of your surroundings than to turn a blind eye to those doing business around you. Staying informed about your competitors will help your business thrive.

Take A Look At Your Marketing Strategy

Marketing your business with success takes a lot of planning and strategy to uphold the creative aspect. We talk about marketing often in this blog, because it’s really important! Do an evaluation of your current, and even past, marketing strategies and tactics. What was successful? What was a complete flop?

Did you have success with paid advertising on Instagram? Have you seen an uptick in reservations since placing your action button on your social media? Maybe you sent out a direct mail piece with a discount and attracted large crowds. Use those tactics that work and repurpose them in new marketing campaigns. Like they say, if it’s not broken, don’t fix it.

At the same time, you should always be evolving and keeping up with present day demands. Marketing is a bit of trial and error, so don’t be afraid to test out something new. A pop up event for the holidays could help boost sales. Maybe hosting a Valentine’s Day date night will inspire ticket sales. You won’t know until you try. Just make sure your plan is solid and the budget needed is there.

Of course, we believe a crucial part of your restaurant marketing is your online presence. If you’re not searchable online, you’re missing the chance to attract new customers that have never dined with you before. That’s equivalent to throwing away cash! Learn more about why it’s important here.

In Closing

Marketing can help you bring in business – but your overall restaurant operations will help you retain customers for the long run. Strategic planning is essential to any business and can help you get a firmer grasp on what you excel at and which areas of your restaurant need improvement. It keeps you in the know about your own internal landscape, as well as what you’re facing with your competition. Use these strategic planning tips to create a solid foundation for your restaurant and let the rest fall into place.

The Tax Forms You Need to File for Your New Restaurant

Opening your own restaurant soon? Congratulations! The foodie culture is at an all-time high. When done right, you could be having a highly profitable business.

But of course, just like any other business, one of the most important things that you should pay attention to are the taxes you need to file and settle. Failure to file taxes or consistently filing late can have a terrible impact on your business, from hefty penalties to suspension and legal charges.

Some restaurant tax forms are similar with other retail businesses. But there are certain tax forms that are exclusive to companies offering food and hospitality services.

Taxes could mean another expense for your business. But they are critical for your business to survive. Payment could be more difficult for those who have bad credit. Thankfully, online personal loans for bad credit are available for people who need financing assistance to settle their business taxes.

Below is the list of tax forms that you need to file for your startup restaurant.

Form 941 – Employer’s Quarterly Tax Form

This form is used by employers to report federal withholdings from their employees. It contains essential information like employment taxes taken from the employee’s compensation and the amount owed to the IRS. It also reports the number of employees, and Medicare and Social Security withholdings. The Form 941 is applicable to all businesses that withhold taxes from their employees. If you have workers or staff who only work on a seasonal basis, they need not be included in the tax form unless they worked during that quarter. This form has to be filed by the end of April, July, October and January.

Form 944 – Employer’s ANNUAL Federal Tax Return

If Medicare, social security, and withheld federal income tax liability is less than $1,000, you don’t have to pay taxes every quarter but only once a year. This tax rule is relatively new, having been announced only in 2007. Usually, businesses with paid wages amounting to $4,100 fall into this category. If you’re eligible, you can register and file it online. The Form 944 has to be filed at the end of January for the previous year.

W 9: Request for Taxpayer Identification Number and Certification

This form is meant to secure the tax identification numbers of your employees. Make sure that you are able to verify all of the information from your staff, including their address so their personal income taxes are processed smoothly.

Form 8027 – Employer’s Annual Information Return of Tip Income and Allocated Tips

Specifically designed for businesses in the food industry, this tax form is used to report receipts and tips and determine allocated tips for tipped employees. This is an essential record keeping document that will help you avoid disputes with the IRS concerning your tipped income. Not all food establishments are required to file this tax. The ones required are those large-scale restaurants that make tipping customary. If you have 10 or fewer employees, you are exempted from this tax.

There might be other tax forms that you need to fill out and file before the IRS, depending on where your restaurant is situated. Remember that cities and states have varying tax requirements. It is a great idea to work with a tax advisor or consultant to ensure that you’re not missing out on anything.

Tax Tips and Deductions

You might be overwhelmed with so many tax policies that cover restaurant businesses. But don’t worry, there are ways to lessen the cost and get deductions.

•Food and beverage costs are deductible. You can even account indirect costs like those of oil and condiments, as well as spoiled, wasted or discarded food.
•You can maximize your tax savings by deducting costs of your recently purchased equipment. You can deduct it in the year in which it was purchased or in smaller amounts over several years.
•If you offer great perks and compensation benefits to your employees, you could also get a deduction from IRS. If you offer free meals to your staff, those are deductible too.
•You can also deduct your transportation costs (mileage) and the actual expenses you incur for driving to and from your restaurant.
•Check if you qualify for Work Opportunity Tax Credit (WOTC). If you hire employees from “targeted groups” such as veterans, former felons, and PWD, you may also qualify for deductions.
•If you donated to charitable institutions, you can also get deductions, particularly on the cost of food.
•You can also get tax savings for remodeling your restaurant if it considered “ordinary and necessary”.

In Closing

For the smooth running of your business, paying your tax dues before the IRS is essential. Hopefully, this article has given you adequate information about the tax requirements and necessary tax forms for startup restaurants and how you can maximize your tax savings.

Transition Your Business from Paper to Automation with Restaurant Technology

Technology is taking over many aspects of our daily life – how we communicate, work, gather information, shop, and even eat! Yes, from mobile apps that allow us to order and pay wherever we are to the more high-tech VR/AR gadgets that take these steps to a whole new level, there is no stopping technology from revolutionizing the food industry.

Restaurant Automation

Whether you’re a newbie to the restaurant trade or have been in the industry for a long time, you should greatly consider incorporating technology built for restaurants to better your business. Speaking of restaurant technology, one of the most important things that many restaurant owners really benefit from is automation. Automating business processes makes so much sense these days when people have a high demand for quality service and convenience.

What aspects of the restaurant business can be automated?

The answer is almost everything. While you leave it to your chefs and crew to prepare good food for your customers, some other things are best addressed by technology. Below are the most common processes which you can tremendously improve through automation:

Ordering and Billing

Many people fancy the idea of shopping from the comforts of their homes. What’s more, they are constantly looking for ways to save money. There is no wonder why there are hundreds, if not thousands, of online shops these days. Not only are they able to buy items at a cheaper price, they also get so save money on gas and avoid long lines at checkout.

Restaurants are adopting this concept of online convenience as well. Just last year, even McDonalds launched its ordering app to expand its delivery services! Order automation benefits both the customer and the restaurant. In the customer’s point of view, it is much more convenient and faster. On the other hand, the restaurant minimizes risk of getting the order mixed up. The same thing applies to billing. Automating this process ensures that no delays and errors, which all improve customer experience.

Accounting, Analytics & Other Back Office Work

Record-keeping is a tedious task which many business owners dislike. But it is also a very critical part of running a business. Imagine having to manually input sales data, transactions, and other financial details every single day. The great news is there are POS and other accounting software that accurately gather and analyzes data for the owner, making it possible for them to focus on running their business.

Inventory Management

Same with accounting, this is often a time-consuming task. Thankfully, the majority of POS software programs incorporate inventory management system (IMS) which automatically counts available raw materials and stocks in the kitchen, analyzes how such items are going to last, and analyze kitchen requirements which all help reduce wastage.

From Paper to Software – How to Automate Your Business

Shifting from paper to automation can be an exciting yet overwhelming time for every restaurant. Here are the key steps in making the transition smooth and easy:

1. Start With the Easiest Processes

Start with tasks that are easier to manage without human intervention, such as accounting and record-keeping. These are important processes that let you avoid human error and can greatly save you time and effort. You should also consider the tasks that are easy yet repetitive and start from there.

2. Focus on Improving Business Functions

Take time to look at the strengths and weaknesses of your restaurant. What are the areas that could greatly benefit from automation? If you have poor billing process, then you can prioritize automating it. If you’re having a hard time reaching more customers, consider creating an ordering app. Pick a function with a solid ROI.

3. Seek Professional Assistance

You need assistance from automation experts. There must be a core team who will analyze your business automation needs and implement an effective process. Choose a technology partner who has the experience and technology to help you.

4. Train Your Employees

Don’t forget to update and train your staff accordingly. They should know how to use such tools in order to carry out their individual tasks efficiently. Encourage feedback from them too (as well as from your customers). This way, you will know how to further improve your business automation.

In Closing

Automation through the use of restaurant technology isn’t just for the corporate giants. Even small businesses and restaurants can take advantage of helpful technology to boost productivity and efficiency. From receiving orders, processing payments, and making reservations, to back-office work like managing inventory, tracking numbers, analyzing sales data, and so much more – your restaurant can greatly benefit from automation.

Not only does automation makes everything more efficient in your business, it also tremendously helps save you money and boost your revenues. Take note that automating your restaurant doesn’t have to come in full blast. It is best to make the transition one step at a time, focusing on the most tedious, repetitive processes and the vital ones.

5 Super Effective Strategies to Save Your Restaurant Money

Why do businesses try to cut costs? Simple. They want to raise their profit margin. Regardless of the industry you’re in, one of your primary goals should be to lessen the operating cost and boost your revenues. After all, a penny saved is a penny earned.

But how can you effectively save your restaurant money without compromising quality? Here are the top strategies many successful restaurant owners swear by:

1. Track where your money goes.

First of all, to save your restaurant money, you want to watch every penny – constantly. Remember that businesses have different circumstances. Some restaurant owners might simply be having problems with poor sales while others have issues with overspending. A great starting point is to look at your financial records. Which area gets the biggest chunk of your restaurant budget? Why? Are there things that you can change or make better in order to cut the cost? It’s hard to tell if you’re really making money and saving some without looking at your financial reports.

Data shows that 73% of restaurant operators that received monthly financial statements reported being profitable as compared with just 49% of operators who received quarterly or annual statements. It’s hard to identify the best solution without really knowing the problem. So take time going over your financial records now and most of all – make it a habit!

2. Focus on being efficient and systematic.

When managing a restaurant, they key is to be as efficient as possible with everything – from staffing to the actual food preparation and use of equipment and utility. Speaking of utilities, like many restaurants, you rely heavily on the use of electricity and gas which constitutes one of your biggest spending. Of course, you need it for cooking, ventilation, refrigeration, lighting, cooling, etc. According to this report by the National Grid, restaurants in the U.S. spend $2.90 per ft2 and $0.85 per ft2 annually on electricity and natural gas, respectively.

There are many ways to reduce your restaurant’s energy costs. Simply turning things off when not in use (from lights to the AC, heater, etc.) and switching to energy-saving appliances greatly help. The National Grid U.S. says a 20% reduction in energy directly translates into 1% increase in profit. Aside from gas and electricity, try to be frugal with other things as well, such as water and other supplies you use on a daily basis, from that dishwasher soap to the table napkins, disposable plastic containers (consider switching to glass), straws, paper towels, etc. Again, every penny saved is a penny earned.

3. Check if your menu needs some update or rework.

You may not be aware of it, but your hard-earned dollar could be going out with the trash bin or compost pile. Today’s restaurants are giving more attention to managing food waste to rein in costs, according to the National Restaurant Association. In fact, 40% of food is wasted throughout the supply chain, and the foodservice industries are responsible for majority of that number.

Now here’s the deal – for every $1 you invest in food waste management program, you are saving $7 on your operational costs! There are many ways to cut food waste. Begin by revisiting your menu. Check if you can remove those that aren’t selling fast. Rethink how you offer buffet service. Watch out for ingredients spoiling before you get the chance to utilize them. Reduce overproduction and repurpose excess food.

Of course, once you revamp your menu, make sure you are updating it online as well. With 93% of people viewing menus online before choosing a place to eat, this is essential. Utilizing a menu management company, like SinglePlatform, can help cut costs by saving your staff time.

SinglePlatform gets your menu on all of the places people are searching without you having to do all the work, saving restaurants over 400 hours per year!

4. Resort to low-cost yet highly effective marketing approaches.

Whether you’re just starting or have been in the industry for a long time, marketing is vital to your success. On average, small businesses spend 1% of their revenues on marketing. That means if your annual profit is $100,000, $10,000 of that goes to advertising.

If you want to lower your marketing costs, there’s probably no cheaper alternative to online marketing. You can even get free exposure simply by creating a Facebook page or an Instagram account. Of course, these social media platforms have fee-based services, but they are less expensive than traditional marketing approaches. However, to get traction, you really have to commit time on managing your social media accounts, from creating daily posts to answering questions from customers.

5. Get ahead of your bills.

Lastly, never miss out on payments. Whether it’s your commercial space lease, inventory, personal loans, employee payroll, or utility bills, you should settle your accounts payable on time to avoid hefty interests. Plus, it is easier to manage your cash flow when you are just paying for the current bills, and not having to think about penalties, charges and arrears. What are some of the best ways to manage your restaurant expenses? Start by making a list of all your bills. Then, create a payment schedule that works for you. You can streamline the payment process by making automatic bill payments through your bank.

Additionally, pay your business taxes on time. Get clear on your tax obligations. As a rule of thumb, you need to save 30% of your business income to ensure you have enough money for your federal tax dues. To be sure however, consult your CPA early on.

To establish and sustain a profitable restaurant business, one of your major goals should be to save your restaurant money. Despite the downturns in the economy and the food industry, the good news is that you can always cut your costs and save using these five foolproof strategies.

About the Author: Lidia Staron has been working as a writer, editor and literary coach for 5 years. She contributes articles about the role of finance in the strategic-planning and decision-making process. You can find really professional insights in her writings.