How to Turn Your Restaurant Employees Into Brand Advocates

The restaurant industry is hectic and laden with cut throat competition, which is why standing out in the crowd is so important to the success and longevity of any restaurateur’s business.

One marketing channel that may have flown under your nose is a simple one that lies within your very own walls—your employees.

Turning employees into brand advocates for your restaurant and having them share positive, authentic messages can help you gain more exposure and customers. By prioritizing employee advocacy, you can form the narrative for your restaurant that shows it in the best possible light and grow your reputation in the industry.


Benefits of Employee Brand Advocacy

While you may run your own social media channels, having your employees become brand advocates has several benefits.

Your employees offer a wealth of networks that can help you reach a more diverse and expansive audience. Research by PostBeyond, an employee advocacy company, and Golfdale Consulting showed that messages sent by employees rather than the restaurant’s social channels reached 561% more eyes.

Content shared by employees also will come across as more authentic and natural, rather than promotional, which will increase trust and engagement. PostBeyond’s research found that messages related to your brand from restaurant employees were reshared 24 times more than those shared by the restaurant.

That extended reach and engagement when employees advocate for your brand can ultimately benefit sales. SocialChorus, an employee communications software company, found that a 12% increase in brand advocacy can double revenue growth.

Plus, brand advocacy doesn’t cost anything, making it a low investment, high reward option for marketing.

How to Increase Employee Brand Advocacy


Employee brand advocacy has many rewards, but how does one achieve it? Here are the steps any restaurant can take to leverage evangelism marketing with staff.

1. Have a clear brand to advocate

The first step to creating brand advocacy is to have a brand for employees to advocate. Take time to set values and a clear mission for your restaurant, which will give your employees something they can believe in and want to advocate themselves.

When you set your mission and goals, it helps create a cohesive company culture that your employees can feel like a part of.

2. Get employees involved

The next step is to set this culture into motion and get your employees involved.

Start on the right foot with your employees with excellent onboarding and training. After you hire a new employee, don’t kill the energy from the interview process by first handing them a huge handbook. Instead, bring them into the fold with a fun onboarding process.


This could include showing a funny or engaging video that makes your place look special, cross-training your new hires so they have a chance to meet all the staff and gain in depth knowledge of your restaurant’s inner workings, and providing a meal on-the-house at the end of their first day—including a few free drinks.

Onboarding sets the tone for your employees’ whole experience, so don’t skimp—your generosity will pay dividends later.

3. Treat your employees like the rockstars they are

Once an employee has entered your company culture, then it is up to you to treat them like a rockstar to increase their work engagement. Offer rewards for when they do a good job, have regular meetings and checkups to make sure no anger is brewing in the background, and try to really get to know your staff and their dreams so you can help them along the way. Show that you care about their goals by offering mentorship and opportunities for career advancement.

4. Use tech to improve employee satisfaction

Use scheduling software such as 7shifts so employees can easily trade shifts and have a central place for work communication to also aid your employee satisfaction at your restaurant.

When your employees are proud of where they work, and have good relationships with restaurant leadership, then they will be more willing to share that enthusiasm in authentic social media posts. Creating positive employee relationships by leveraging technology and strategies to streamline restaurant staff communication between your managers and team members is a good place to start!

How to Promote Brand Advocacy

Now that your employees are happy working at your restaurant and actually want to share the love with others, the next step is to encourage brand advocacy on social media.

Here’s how to make your business social media-worthy:

1. Employee Events

Consider throwing a few events each year for your employees to be able to mingle and have some fun. Hosting a company-sponsored event for the staff’s benefit will make employees want to whip out their phones and start sharing. Event ideas can include bringing a mascot or special guest, or hosting a themed gathering, like go-karting or karaoke.

2. Restaurant Design

full restaurant view from outside of window

Social media-friendly attractions in your restaurant are also a good way to get employees sharing. Instagram-worthy photo op areas have been popular for some time now, and don’t show any signs of going out of style.

Assets to incorporate into your overall design may include a neon sign with a unique message, a photo booth, or food competitions at your establishment.

3. Branded Hashtags

Even if your staff members are posting about your restaurant, it won’t mean much if they don’t include the right hashtags. Bring your staff into the social media fold by encouraging not just posts, but including certain hashtags and tagging your restaurant’s handle. Ask employees to follow the restaurant’s social accounts so they can share any news they find exciting. If you have a social media manager, make them the point person for staff to ask questions.

4. Menu Links

When your staff posts about the food at your establishment, make sure they know about an online menu, which can easily be set up with SinglePlatform. They can then include a link to the menu in their posts.

It might not be necessary to have an enforced social media policy, but a little guidance can help you get the most from your staff’s posts.

Conclusion & Takeaways

waiter in an empty restaurant carrying a tray

Employee brand advocacy has a lot of benefits, but it is not something that can be too heavily directed. It must come naturally from an inviting company culture and a mission your staff feels part of. From there, providing ample opportunities for them to get great content, and a slight nudge on social media best practices will allow you to get the most out of their shares. You’ll soon find you won’t have to do much for them to spread the message of your restaurant – and all for free!

If you focus on building a great company culture, and give your staff the right channels to share it, then the results will flow in!

5 Steps to Optimizing Your Restaurant’s Employee Lifecycle

With an average annual turnover rate of 73%, according to The United States Bureau of Labor Statistics, restaurateurs know that employees are going to be coming and going from their business with frequency. However, not many restaurateurs think about how they can optimize the processes of both employee hiring exiting.

Since high turnover is likely, it is in restaurants’ best interest to consider the lifecycle of an employee as a whole, and optimize the journey to make sure the business gets the most of each employee, which helps keeps costs down and morale amongst staff high.

Roughly speaking, this journey can be thought of as 5 distinct stages which an employee moves through: Hiring, Onboarding, Training, Scheduling and Engaging.

We’ll take you each step of this process and provide some helpful tips, strategies and tools to help you save you time, money and stress when it comes effectively managing your staff.

Any employees journey with your restaurant staff starts with the hiring process. There are a many things you can do while hiring to make the process easier and help make sure you get the right candidate who will be a productive and efficient team member.

Before releasing your job posting, make sure that your restaurant’s online presence is top notch in order to attract top talent. Give your online presence a quick audit to make sure you like everything that is out there, from social media to your website to reviews of your establishment. Ensuring that your restaurants brand is polished is increasingly becoming a reason potential employees choose one company over another to apply to!

SinglePlatform can be used to make sure that what you’re putting out online, such as menus, your website, and social posts, are the best they can be.

Next, place your job postings in the right place. Job boards such as Indeed, Glassdoor or your own social media networks are good options, but there are also hospitality focused job boards such as Poached. Make sure you use the right keywords in your posting to give it better placement on job boards.

Also use your own professional network to find qualified employees. Let all your employees know you’re hiring, and consider providing an incentive for a referral. A referral can be great for building team morale and a consistent company culture.

Approaching the hiring process carefully and with an eye for quality can save you money and time in the long run because it can attract the best possible hire, not just the quickest.

Once an employee is hired, the next step is to onboard them to your operation make sure they feel comfortable, are learning as much as they can, and are welcomed into your workplace.

Up to 20% of employee turnover happens during the first 45 days of employment, so it is important to have a tried and true onboarding method in place to make sure you don’t lose those great new hires. Organizations with a standard onboarding process have 50% greater new hire retention.

A checklist is a good idea to follow an onboarding process, and software, such as Process Street, is now available that can help you create and follow a checklist. Process Street outlines each step of the way, from getting an employee’s details to assigning them a mentor on the first day and following up to see how they are doing. Having a checklist gives you a great, transparent way of monitoring progress that is purely analytical.

Following an onboarding process will allow for further refinements in the future and can remove the stress of not knowing how to make a new hire part of the team.

Much like onboarding, training also requires a plan. When creating a plan, think about the goals of the training ­‑ what you would like your employee to know and in what timeframe. Don’t just hand your employee a handbook and set them to work immediately. Think of training as a continual process that requires patience and many check-ins.

Break each role down in your restaurant into a set of tasks and design your training around teaching each of those tasks. When clear goals are set within a specific timeframe, then you and your employee share the same expected outcome and tracking progress is easier.

You can also look at implementing hospitality-specific learning and training systems like Wisetail which can help track and test the knowledge of your new employees to ensure they have the skills they need to do their job well.

Also consider an initial skills audit of the employee so you don’t waste time on training them on things they may already know. Monitor an employee’s performance through performance reports that use data collected monthly and weekly to see where an employee may need more training to be optimal.

Once a new employee is hired, onboarded and trained on what they need to do their job well, the next step is to get them on the schedule! Luckily the days of “penciling them in” for a shift are long-gone. Modern restaurants can take advantage of web-based scheduling tools which make this process a breeze.

Restaurant scheduling software provides great features to help you save time and money adding new staff to your schedule. For example, with a web-based scheduling app you don’t have to worry about dealing with complex availability for new staff – you can simply add them to your schedule and then your new staff can submit their own availability which a manager can then approve.

A scheduling tool like 7shifts takes this one step further by allowing employees to provide shift feedback after their shifts which managers can then use to keep track of their onboarding and training to see if any further action is required and to quickly act on issues that may affect an employee’s on-the-job performance.

To help retain your staff, a good idea is to become knowledgeable of the pain points your staff feel and learn from past employees.

Consider measuring how long staff stay with your restaurant, which can help you understand what you need to do to keep them longer. If your average server stays for 24 months, design incentives around that time frame to keep your employees motivated.

Incentives and rewards are a good way to retain staff. Implement small wage increases every year, staff meals, holiday parties or fun group activities to make your staff enjoy working in your restaurant more. Learn more about creating a solid company culture here.

If an employee does leave, perform an exit interview to see why and what can be improved in your entire employee lifecycle program so the same mistakes aren’t done twice. Also have regular check ins with your employees to make improvements before it is too late. It’s important to identify stressors in your workplace by talking with your staff so you can make strides toward improvement.

In Closing

Since your restaurant may see a lot of staff come and go, use that repetition to always be enhancing and strengthening how you manage an employee’s lifecycle. From using your network and the best job platforms to find the right candidate, to having a tight process for onboarding and training, then regular check-ins to make sure your staff is happy, you will find that approaching an employee lifecycle strategically will save you time, stress, and money in the long run.

8 Reasons Your Restaurant is Losing Money

If you’re a regular reader of this blog, we don’t have to tell you that restaurants run on the thinnest of margins. You’re already doing what you can to bring more money in: solid and intelligent promotions, good staff training for upsales, scaling prices to the “sweet spot” that maximizes profit without driving people away. That’s all well and good.

But for a restaurant to really thrive, you have to approach this problem from both sides. Too many restaurants have great income but are simply hemorrhaging money. Below, we discuss a few of the most common reasons restaurants lose money worldwide, and some simple ways to stop the bleeding.

1. You’re Not Online

Social media, promotion sites like Groupon, community pages, and your own website are absolutely essential to success with any business in this century. This is especially true of restaurants.

Since more and more people use the Internet to make a decision about where to eat each year, you’re leaving money on the table if your online presence isn’t at least as inviting as your front lobby. You’re also missing out on getting new customers through your door if you don’t post your menu and business information online. People want to know everything they can about your restaurant before stepping foot inside, so make this readily available.

The good news is you don’t need to spend much time or effort to make your restaurant website at least as good as your competition: poor online presence is sadly too common in the restaurant industry. If you go above and beyond expectations to make your website top-notch, people will take notice.

2. You Built Your Menu for You

This subtle rookie mistake makes for higher food costs, fewer returning customers, and a surprising number of back-of-house and front-of-house logistical problems.

If you designed your menu based on what you want to cook, what you like to experiment with, and what you want to be perceived as, you’re serving the wrong customer.

Instead, pay attention to what your customers actually order, even going so far as to ask online or in the house. Build your menu based on what people buy, simplifying your offerings until you reduce waste considerably while retaining more customers and leaving them happier than ever at the end of their meal.

3. Your Turnover Is Too High

Between recruiting costs, extra staffing during training, and the price of a new hire’s beginning mistakes, it’s clear that hiring a new employee is far more expensive than keeping somebody on staff long-term.

Sure, employee turnover is an endemic problem in the restaurant industry, but you can still do a lot of things to keep yours lower than others. A few examples:

  • Schedule well, both so you don’t have to keep calling staff in or out, and to accommodate their reasonable needs.

  • Work with each employee about how you will help them reach their long-term goals, whether those goals are inside your company, or something like finishing school and moving on.

  • Check in regularly with everybody about how things are going, not just with them but in how you can improve things overall.

  • Think about your company culture as part of the hiring process. Doing without for an extra week or two is less stressful and costly than hiring somebody who just isn’t going to fit for the long-term—they’ll ultimately cost you and your business more money than they’d bring in.

4. Your Inventory Management Needs Help

Most restaurants spend about 1/3 of their money on inventory. Of that money, the National Restaurant Association estimates as much as 40% is wasted. This happens in three ways:

Without proper inventory management, you can’t spot and stop food theft by employees (more on that in a bit).

Proper inventory management also stops you from accidentally ordering too much of an ingredient to use before it goes bad.

Finally, bad inventory management means wasting food at the end of the night. Finding the right inventory management system, training your staff on it, and using it reliably, is one of the most effective ways to reduce costs in your restaurant beginning this quarter.

5. You Have No Loyalty Program

Experts say it costs 5-7x as much to land a new customer as to sell to a repeat customer, and repeat customers spend 10-15% more each time they come to your store. And yet, most restaurant owners focus on bringing in new customers and communicating to the general public.

Establishing some kind of loyalty program, whether that’s online via an app or something as simple as a punch card, keeps those low-cost, high-spending customers coming back for more.

6. Your Employee Benefits Are too Chintzy

Okay, here’s the truth. Your employees are going to steal from you. It’s no fun that this is true, but nearly all of them will help themselves to some ingredients, or “forget” to write a friend’s meal on a ticket, or take home a cooking pan they like. There’s nothing much to be done about this on the macro, industry-wide level. But you can minimize  it by giving your employees enough benefits to instill a higher level of loyalty.

This is especially true with your employee meal policy. If they’re getting a generous enough shift meal, they’re not going to help themselves to one. It costs about the same, but (a) you know about it and can account for the expense, and (b) it avoids this “gateway theft” to more serious losses.

7. You Haven’t Invested in Tech

Or maybe you invested in the wrong technologies. Apps, electronic menus, automated payroll and hours tracking, online credit card processing, and simple grocery apps are all examples of ways you can turn a little early investment into steady savings month after month.

By contrast, throwing money into fancy kitchen gadgets, unnecessary front-of-house decorations, and similar extravagances do nothing for your bottom line. 

Ever watch one of those bar or restaurant redesign shows? They do wonders on a fairly small budget, using materials originally. If you want your front-of-house to have some pretty and flashy decorations, spend less and create more yourself instead of investing in the wrong kind of expensive tech. 

8. You’re Not Forecasting

Knowing approximately how many customers you’re going to have in a given day isn’t some sort of psychic talent. It’s a well-understood, scientific process the big chains have down to a science.

Without forecasting your throughput, you risk food waste or shortages depending on the day. Without forecasting monthly, seasonal, and quarterly trends, you end up having to put purchases on credit to keep things moving. Both of those cost money.

The good news is that countless blogs (including this one) and free or cheap apps now exist to help walk you through how to forecast, why it’s important, and where to focus your efforts.

Final Thoughts

It’s possible some of the items on this list are things you have well in hand. It’s also possible that so many are out of control that you’re not sure where to start. Either way, doing something is better than doing nothing. We recommend starting with the one that feels easiest and implementing it for one to two months before moving onto the next.

Then use the resources and money that step has saved you to both inspire and support your implementing the next. By the time you’re done with this checklist, you’ll have the extra resources to find even deeper ways to improve your operations, reduce your costs, and increase your profits.

About the Author: Allen Waters is a restaurateur with 20 years of experience starting and running a variety of food places, from a hot dog joint to a high-end French gastronomic experience, before transitioning into consultancy.

He now helps small and struggling restaurants by assessing their main pain points, helping them get out of the red and become locally successful.

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.

How to Drive Restaurant Profit with Staff Communication

By now it’s common knowledge that turnover in restaurants is very high – 20% higher than in the private sector, in fact. Add to that, 70% of employees say they are not engaged in their work.

With the odds against restaurant employers to retain and engage their staff, communication is key for your staff feel listened to, comfortable, and a part of the larger vision of your organization. Effective communication means staff members are likely more engaged and loyal to your business, which in turn creates more efficient operations and higher profits.

If staff communication is paramount to a restaurant’s success, it’s important to understand how you can best communicate with your staff to ensure that success. Here are four simple ways to streamline team communication so you can ensure that your entire staff is on the same page.

Leverage Your Existing Social Platforms

According to a poll from Ipsos MediaCT 80% of restaurants in the United States already use social media for marketing. Given that your staff are likely already active on social media platforms, it makes sense to use your existing posts as a means to engage and communicate with staff.

By encouraging your staff to follow and engage with your restaurant on social media channels you create another opportunity to communicate information to those within the business. By scheduling and automating your social postings using a tool like SinglePlatform you can keep your team informed without having to wait for another opportunity like a staff meeting.

Whether it’s tonight’s specials or an event that is happening soon, using a social media channel your staff members are already checking means you have a higher likelihood of communicating what is important without having to specifically call it out.

Use a Work-Specific Communication Tool

Texts or chat tools like Facebook Messenger can be great for quick one-to-one check-ins with your employees, but to really get everyone on the same page and encourage transparency in communication, consider turning to a work-specific tool that you control.

Restaurant scheduling software, such as 7shifts, provide in-app chat tools for quick and easy team communication. Rather than relying on multiple tools and platforms to communicate with your staff, simplify your operations by having all work-related communications in a single channel that they can’t miss.

Staff can use workplace-specific communication tools for one-on-one conversations, group chats, or managers can send one-way announcements to all staff.

When your main communication tool between managers and staff is part of a tool you already use – a staff scheduler – it’s easy to extend the communications benefits by letting staff complete tasks like submitting availability or time-off requests all in one place.

Go Old School

While new technology can often bolster communication, sometimes you just can’t replace good old fashioned face-time to check in on your employees, make sure they are happy with their work, and hammer out any ways operations can be improved.

If you aren’t doing it already, consider incorporating staff meals into your operations, or if that is not possible, meal allowances to staff. By treating your staff to the benefits of your business, it is an easy way to boost morale, and if you are a full-service restaurant, for the kitchen to use any soon-to-be-expired ingredients.

When staff are comfortable and feel taken care of, you’d be surprised by the valuable information they might provide that could smoothen your operations. Small annoyances that prevent your staff from performing their jobs to the fullest often come pouring out, allowing you ample opportunity to address those problems in a professional and productive manner.

A staff meal before a shift can also be combined with general information about the upcoming service, such as any menu changes or the special of the day. If you have a new menu, also consider “staff tastings” to allow your staff to gain intimate knowledge of your menu through first-hand experience in order to provide the best sell to your customers.

Other ways of “going old school” to improve staff communication is to have one-on-one staff meetings periodically to address staff complaints or find ways they or the business can improve. Going one-on-one is a good way to offer employees a chance be candid, as they might keep some issues to themselves if in a big group.

Internal Newsletters

Part of great team communication that can ultimately boost your profits involves employees feeling comfortable in the workplace and motivated to work their hardest. That all comes down to company culture, and a great way to boost company culture is with an internal newsletter.

Sending mass newsletters by email is easier than ever these days thanks to specific online tools, such as Constant Contact or MailChimp.

Newsletters can be a great way to highlight when an employee went above and beyond, as well as to make note of any upcoming changes employees should be aware of, or announce any wins the restaurant received, such as a super positive online review.

When making a newsletter, try to make it as fun as possible and really incorporate some personality into it. Don’t be afraid to go very specific in your references to funny quirks in your restaurant or inside jokes among your staff to put a smile on your staff’s faces and give them something to talk about at work that can help unite the team.

Newsletters are also a good way to break down silos between departments and get everyone on the same page. For example, you can outline how a business initiative was a great success from the efforts put in from marketing, to the great job the kitchen did on execution to the wait staff that upsold that extra bottle of wine. You’re all in the same boat – feel it!

In Closing

By making sure everyone is on the same page with easy to use technology, making better use of the social tools you already have at your disposal, and by creating opportunities for staff to feel comfortable sharing their opinions, you will be creating a work atmosphere that put communication – and the benefits that come from it – first.

About the Author: Eric Stober is a freelance content producer for 7shifts, an employee scheduling platform built for restaurants. Eric has written for publications such as Global News and the Toronto Star, and has a keen interest in travel, technology, entrepreneurship, spirituality and mindfulness.

Restaurant Catering for Events: How to Price Them Right

The typical dinner rush is most likely your bread and butter. But, if you have the space and the resources, offering catering for events can be a lucrative addition to your restaurant business. Especially with the holiday season upon us, it’s a great opportunity to increase activity.

According to, the global contract catering market is expected to grow at a compound annual growth rate (CAGR) of 4% from 2016-2021.

Hosting a one-time event is very different than a busy night for dinner on your restaurant floor. It requires a different type of planning and coordination, as well as a unique pricing model, and a set menu.

On a typical day-today basis, you probably serve lunch and dinner a la carte and determine that pricing accordingly per dish. But, usually events have a set, customized menu featuring specific items the customer chooses from a longer list. So, how do you go about establishing prices for your event menu? Find out below.

Learn how to strategically price menus for your restaurant’s catering events so you can enjoy a profit and make your customers happy.

Pricing it Right: Determining the Cost of a Catered Event

In order to keep margins at a reasonable level so you can enjoy a healthy profit, you need to determine a menu pricing strategy.

Food Cost Percentage

A good place to start is by calculating your food cost percentage (FCP). This equation is pretty simple:

How much the ingredients cost / (divided by) How much you sell the dish for

= Food Cost Percentage

The range you want to keep your FCP is around 28-35%. Of course, you want to keep the percentage as low as possible without taking away the quality of your meals.

Let’s look at an example. If you sell a pork tenderloin dinner with a side salad and rice for $25 and the ingredients cost you $8, your food cost percentage will be:

$8.00 / $25.00 = 32%

For this dish, you’re right in the sweet spot. Make sure you calculate your FCP for each menu item, not just dishes you add as time goes on. You can even do this calculation for the total menu. Add together all menu item costs and the revenue to get your total FCP.

When you find the FCP of a certain dish is too high, consider using less expensive ingredients or adjust your price accordingly, keeping in mind what customers will be willign to pay based on the quality they’re receiving.

Although it may seem like 30-35% is high, remember that you’re not only accounting for the food cost. You have to factor in other restaurant costs, like rent, bills, and the labor that goes into bringing the meal to life.

Gross Profit Margin

You should also consider your restaurant’s Gross Profit Margin. With this calculation, you’ll want to factor in labor, rent, and other outlying costs. Typically, the Gross Profit Margin for a restaurant can range between 0-15%. Full-service restaurants typically see a GPM of 3-5%.

Menu Pricing for Events

As we mentioned, pricing menus for catered events is a different animal. Typically, events are hosted for a specified amount of people with a pre-determined menu. Most often, there is a pre fixe menu with a cost per head.

This is considered fixed pricing.For example, buffet style event may offer 3-4 appetizers, 3 selections for entrees, a salad, and three dessert options.

It’s wise to use the Food Cost Percentage in this situation as well. Calculate how much all of the food will cost and divide that by the cost you plan to charge per person.

Fixed Pricing Calculations

Let’s say the food ingredients for a buffet-style engagement party will cost you a total of $800. There are 70 guests in attendance and you plan to charge $30 per guest.

$30 (pricing per person) x 70 (amount of guests) = $2,100

$800 (food cost to you) /$2,100 (what you’re charging the host) = 38%

Your FCP is still pretty high. Try bumping the cost up to $35 per person and recalculate:

$35 x 70 = $2,450

$800/$2,450 = 33%

Raising the amount you’re charging per person by $5 lowers your FCP by 5%, which is a solid improvement. If you’re trying to reach a lower point in that 28-35% mark, research different suppliers for certain ingredients to drop food costs by $50 or $100.

$35 x 70 = $2,450

$700/$2,450 = 28.5%

Pricing effectively is all about strategy and crunching the numbers in order to avoid selling yourself short. Of course, you want to please customers and give them a fair deal in order to win the business & hopefully lock them in as a loyal patron. So, let’s talk about something you should avoid when it comes to pricing restaurant catered events:

Sacrificing Customer Trust For Your Own Gain

A main goal as a business owner is to, of course, earn profit. But, you should also strive to receive loyalty from patrons and to delight your guests with your food and service. The age-old saying “honesty is the best policy” applies to this situation.

Be reasonable and fair when charging guests for an event. Don’t drive your charge per person way up just to see higher profits for yourself. A higher cost must be justifiable. Being greedy is bad for business and might make you lose the deal altogether.

Remember, most of the time people compare different venues before making a final decision. Don’t sell yourself out of the game by being unreasonably priced.

Diversify the Menu Offering

Strategy comes in once again when you’re building the menu for a catered event. Of course, it won’t be wise to only offer filet mignon, caviar, and escargot, because those are all expensive!

Find a good mix between high cost and low cost items and offer an assortment of those. This ensures that there are impressive food options that are still reasonably priced.

Reuse ingredients when possible. Food waste is a hot topic these days and you want to do your best to avoid it. If you’re making a chicken dish with mushrooms, you can buy those mushrooms and bulk and use them in an accompanying risotto. Arugula used in a salad with parmesan can be wilted and used as a side dish. Keep costs down in an effective way without sacrificing taste.

Tiered Pricing Calculations

Fixed pricing isn’t the only option for catered events. A tiered structure can work as well. With tiered pricing, there is a fixed cost per person that lowers with the more guests you have. So, if a party is between 0-50 guests, the cost per person may be $40. But, if the guestlist grows to 50-75, you can charge $35 per guest.

Of course, you’ll have to do some calculations to see what makes sense. But, tiered pricing is a great option for events because it shows customers that the more people they invite, the merrier!

The lower cost with higher guest count might appeal to some because they’ll see it as an opportunity to invite more guests without adding on a ton of additional cost.

If you’re including other fees, like a room set up charge or space rental fee, make sure you factor those into the pricing structure as well and outline them in your contract.

Quick Tip

Always do some research on the competition. Find out how much other restaurants or catering services are charging so you can make sure you’re not priced out of the market and win more business.

In Closing

Incorporating catering into your restaurant offering is a great way to reel in more profit and diversify your business’ offering. Although hosting an event is different than running a restaurant day-today, there are benefits.

When branching out to offer catered events, consider your pricing options, do the math, and figure out what works best for both your restaurant profit and your customers.

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.