How to Rediscover the Spark for Your Restaurant Business

Hey there restaurant pros, it’s David Scott Peters and welcome to episode 57 of the Restaurant Prosperity Formula. I’ve been coaching restaurant owners since 2003 and the Restaurant Prosperity Formula is based on what the most successful restaurant owners I’ve worked with do on a daily basis to achieve their success. The basic premise of the formula centers around achieving prosperity, freedom from your restaurant and the financial freedom you deserve. To achieve prosperity, you have to follow a very specific formula made-up of leadership, systems, training, accountability, and taking action. Today’s topic, I want to focus on how to avoid feeling overwhelmed in your restaurant, all while keeping your passion for the restaurant intact. Let’s get started. Challenges in the restaurant business are a given, but sometimes there’s so many in a month, a week, or even a day that you find yourself feeling jaded.
Challenges ranging from staffing and cost controls to marketing and legal issues can overwhelm your love for the restaurant and make it so you don’t even enjoy going in anymore. Losing that passion, that passion for the restaurant industry is the worst thing can happen to you or your business. Look, you got into this business because you were built for hospitality. True restaurant professionals realize it’s their job to create lasting memories for the guests. They do this when they create a restaurant that’s comfortable, pleasing to the eye, operating basically in a operating room clean environment. You created food and drink recipes that delight your guests and even keep them coming back. You invested in customer service training so you could deliver on your promise of great guest experience.
Ultimately, you do this because you love the restaurant business. But you know what? Sometimes you feel overwhelmed by getting hit by so many challenges. In fact, you can lose your passion for the business quite easily because there are so many challenges that hit us on a routine basis. Now look, if you feel like you’re starting to lose or have already lost your passion for the business, that inner spark that keeps you motivated and able to push through all the challenges that would stop normal people like COVID business restrictions, like the rising cost of food and labor costs, the labor shortage and now high inflation or dare I say recession? Like you need to rediscover your passion.
You need it because it’s that inner spark, that flame that keeps you going. It’s time to make your dream restaurant a reality. One that gives you the life you wanted, full of freedom to do what you want, to go out with your friends and family, to be present at any point in time, not be a prisoner of your business and have it make the money you deserve. You’ll find that everyone around you will feed off this new energy, this newfound energy and your business will catch fire in a good way of course.
So how do you make this dream a reality? it’s simple, really. It’s a very simple answer. It allows you to impose your will without being there, even when you’re there, but especially when you’re not. And that’s by adding systems into your business for everything you do. Systems ultimately allow you to run shifts the way you want them run without you being there so that you can work on your business rather than in it. I’m sure you’ve heard that cliche. Well, it’s not so cliche. It can be a reality.
Now adding systems to your restaurant, will only work if you have these two things in place first. So if you’ve been following me for any length of time, you know that #1 is that you execute on Restaurant 101 right. Hot food hot, cold food cold, clean safe work environment for great guests and employees. Wow customer servicing, incredible product. And now to go or delivery. Like you’ve got to create memories that you are executing a great restaurant in the 1st place.
The second is before all the systems, you’ve got to have cash controls in place and checklists. Cash controls to make sure every penny makes it to the bank. That you care about the penny, which means checklists come in because now you care about clean restaurants, that things are set up for success, that there’s a specific way you want things done to ensure success, creating a culture where the details matter. Once you’ve got Restaurant 101 down and you’ve got cash controls and checklists in place, you are ready for the systems.
Now, these again have to be taken care of before you move on. So now we can implement our systems, right? Now, what do I mean by that? When I say systems, what do I mean when I say they’re systems? A process, a way to doing everything and anything in your business? Well, I mean everything. For example, if you work for me, there’s only one way to count back a cash drawer to $300. My way. I can’t have 5 managers that have five different ways to count it back because I can’t hold anybody accountable to that. I can’t train that and I get different results from time to time. There’s got to be my way. Right or wrong, it’s got to be my way.
Now don’t get me wrong. I’m open to change. I’m open to better ways to doing anything. I don’t know everything as an operator. I learn every single day. So I’m willing to work with my team to improve my systems. The reason I insist that it’s getting done my way is because I can train any new manager my way. So if somebody moves on, I don’t lose the system. It’s my system, my process way, not the way they do it. I can audit my systems and make sure my management team is doing it my way. I’ll set up my restaurant for success because when someone moves on again for good or bad reasons, there’s another person who moves up easily because they’re trained in my way.
When everyone is trained my way, which becomes your way, I no longer lose years of experience and knowledge when a seasoned professional leaves my business. This is huge. In fact, this is why chain restaurants are able to sometimes have thousands of locations around the world and have 0 owners in them. They have a system, a process, a way to doing anything and everything in their restaurants, their way. Now with that said, what’s next? Right, we took care of our checklists and our cash controls. We’ve got those ready to go. We know we need systems. What’s next?
So when I say systems, what do I mean? I mean there’s a system, a process, a way to doing anything and everything in your business. I’ve said that now probably a half dozen times because it’s true. It means the systems are trainable. It means the systems allow you to hold people accountable. It means that things are being done your way. Here’s a sample, just a sample list of the systems you need to have in place when we start talking about systems.
Let’s start off with kitchen systems. I need a waste tracker, a clipboard system, make sure ******* mistakes aren’t made from day after day after day. When I find that we’re over ordering tomatoes because we’re throwing away, I can change my production. When I find out that one of my cooks is burning steaks, I can reposition that cook. have him or her retrained, repositioned, or fired, that we stop losing hundreds of dollars every single night. So waste trackers are very important, a key item tracker to prevent theft, counting 5 to 15 items every shift to make sure they’re not stolen. Now you can imagine if I reduce waste and I stop certain theft, I can reduce my food costs. It’s fantastic. Plus it’s my way of doing things. I need receiving procedures with a receiving checklist that this I want you to check temperatures, dented cans, you get the picture. I need a food and supply ordering system with par levels that anybody can count the product on the shelf based on the day that I’m ordering it.
See how much I have on hand, what I need to have in order to make it through the next three, four days until my next order. This is critical. This means anybody can count, anybody can order. I need purchase orders to make sure when the product comes in, I get exactly what I ordered at the right price, the right pounds, the right eaches. I need a daily prep system. I need a cook prep system. This way people are prepared every single day based on the needs of the business, not what they think is in their head.
How about cost of goods sold systems? Well, I need food and beverage software. If you’ve been following me for any length of time, you know that it is a must. I will mention it again when we talk about other systems. But with that said, why do I need it? So I can take weekly inventories. So I know what my food cost is in a moment’s notice and be able to take inventory in under an hour. FIFO pricing, which means I need a system to update my prices, whether it’s taking a picture of the invoice and sending it up to your software and magically happening, or you manually making the change. I need to be making sure that we are Doing our cost of goods sold calculation, beginning inventory plus purchases minus ending is a use, use divided by sales, food cost percentage. But if I don’t want to stop there, I need to add the four calculations I can guarantee put more money in the bank account. Things like inventory turns, average inventory, budget variance reports, change in inventory. I need recipe costing cards, right?
Two most important systems any restaurant should have are budgets and recipe costing cards. They’re proactive tools. How can you complain you’re not making the money you deserve if you don’t have recipe costing cards for food and beverage? I need routine yield tests. I need to implement the restaurant checkbook Guardian along with the key item tracker and waste tracker. This is a budgeting system that I can tell my managers how much they can order on their next order to stay within budget to proactively order instead of ordering whatever I think I need. and taking the money out of my bank and putting it on the shelf to be at risk to be stolen, wasted, spoiled. I need to be using my POS system, the item by item sales mix report, PLU report, velocity report. What am I actually selling so I can analyze my menu and come up with my ideal food cost? If there was no waste, no theft, no spoilage, perfect restaurant, along with my recipe cost cards, I can tell you what your food cost should be, not some national average.
And then when I have that, I can compare my ideal to actual to budgeted food cost, poor cost by target. And that tells a huge story, allows me proactively change my business. I need to be gathering my descending case report to see what I’m actually selling and what I can do to reduce my costs if I can get a better contract on certain items. And ultimately, with the software, I’m going to do menu engineering. I created a spreadsheet called the menu profitability monitor that often we take the data from the spreadsheet because it doesn’t allow you to manipulate it, put it in there, and now I can raise prices, reduce costs. I can change my mix. I can engineer my menu to profitability.
How about bar systems? again, I need food and beverage software, right? Whether it’s food specific or bar specific. That’s why I said I was going to say it again. I need a system on teaching my managers to visually check in orders, to look at the invoice and touch each bottle to make sure they were delivered. I need to stock by the six pack to prevent theft that when I walk in a walk-in cooler, I see sixes all everywhere. That if I see A5, A3, A2, I know I have theft. I need to stack and remove all my beers, kegs, and bottles outside of my cooler to make sure my vendors aren’t stealing from me. I need a waste tracker, aka spill sheet, same exact thing behind the bar, a comp sheet, so my… my managers and my bartenders know what they’re giving away and it’s within the realm of what my rules are. I need key item tracker so that bottled beer and certain things are not stolen. I need a liquor ordering system with par levels just like food systems.
I need a perpetual inventory form so that every bottle in bottle out is recorded into my liquor storage area. How about standard drink recipes just like food I need to have recipe costing cards. I need to implement a mid-shift bar draw audit to make sure that I can prevent theft, but if you’re dumb enough to steal, I will catch you in the middle of a shift. These systems are powerful. How about labor? Especially in today’s day and age where we have a labor shortage, which means we’ve got to become leaner, but really what it means is we’ve got to become more efficient to use the people we have today and not overuse them.
So I need to keep track of systems to allow anybody to schedule. So it starts off with a team availability sheet. What people can and cannot work, how many shifts they wish to work. I need staffing guides or better yet, with scheduling software, I need to create templates, $40,000 a week, $50,000 a week, $60,000 a week, $100,000 a week. You get the picture. You can literally say when people come in and out of every position, how many cooks, how many servers, how many cashiers you need, you name it. Now training somebody to write a schedule is much easier. It’s your system, your process, your way. I need to use the restaurant payroll guardian. Like the restaurant checkbook guardian keeps your managers on budget, the restaurant payroll guardian tells your managers not only how many dollars, but how many hours they have to schedule next week to be on budget. Because I have a budget, which we’ll talk about in a moment, I know that I have a moving labor cost, that it’s not month to month the same exact number.
in season all of a lower labor cost, out of season all of a higher labor cost because my salaried managers are chewing up more of my dollars. But I still need minimum staffing. I still need to staff my restaurant. So the restaurant payroll guardian is magic. Coupled with your scheduling software, we can now use the labor discrepancy finder to find out that your kitchen is going into next week because they copied one schedule to the next, used the template, whatever they may have done, but sales are slightly lower in that template, that they’re 14 hours over in the kitchen and you can coach your chef or kitchen manager to reduce those hours before you approve the schedule, proactively running your business. You need to have systems for controlling your labor, from writing a schedule the same way to reducing labor costs that you teach your managers your way, your system, your process way for cutting and you name it. Again, with that scheduling software, we want to go one step further and we want to start to look at our efficiencies.
I’ve got a system I call the Restaurant Labor Efficiency Finder, which is what? Dollars per labor are worked to truly understand whether we are producing what we’re supposed to. How about operating systems? should be pre-shift meetings. That’s an actual sheet that is filled out and used. Yes, that’s a system. Guest policy, that is what? Greet, understand, educate, satisfy, thank. How we can utilize that to train hospitality. I need China and dish order forms with counts, product IDs, who’s responsible for it, civil order forms, glassware order forms, merchandise order forms, a system, a process, a way to ensure those things, well, Never run out. I need manager checklists. I need opening, closing, side work checklists for all positions. I need a manager log to increase communication with my management team. 501 posters to stay within the law if you’re in the United States. I need an I-9 system. I need OSHA posting in place because that’s supposed to be done every year. An 8027 tip report being done every year. Like there’s so much.
And that’s only a partial list. What about employee training systems? Patterned interviews to make sure we’re analyzing each one of our candidates the same way and staying out of, well, legal trouble because we may have discriminated because we asked each person different questions. Employee handbook to make sure people understand what our policies and procedures are. A sexual harassment policy and a sexual harassment prevention training system. I need employee evaluations to make sure I can maintain my people and they know what they need to work on and what they’re doing well, that they feel appreciated.
What about financial systems? I need the sales forecast generator because I need that forecast so I know how much food I can buy, how much booze I can buy, how many people I can schedule. I need to have a budget so I know where those targets are when I use those budgeting systems like the Restaurant Checkbook Guardian, the Restaurant Payroll Guardian, you name it. You got to be able to calculate your break-even point so that you can find out that if I can run more efficiently, that I can start making money sooner and what a great impact that’ll have on your business. You need to make sure you’re being set up on accrual accounting because we have inventories and that when you’re looking at your reporting, it’s not based on a cash basis, but accrual, earn OUs, not collected paid for. I need to be able to calculate my current ratio on my balance sheet to see is my cash health healthy in my business. I need cash flow projections because you know what? Profit and loss, profits if you will, don’t pay your bills, cash does.
So I need to know when I can pay those bills in and out and that truly is a cash basis as I look at those bills. I need monthly and weekly budget variance reports. when I create a budget, I want to go line by line by line and see where I hit or missed. This allows me to say, what systems did my managers not use? I put systems in place for everything. What didn’t they use? What do I need to retrain, hold them accountable, and then change my plan that if I lost, maybe I thought I was supposed to make $14,000 last month, but I made seven. What small changes are going to make the rest of the year in order to make that $7,000 back without giving up Guest satisfaction, cutting product quality, going against my core values. Small changes throughout the rest of the year in order to make that money back because I’m going to make the money I deserve. Proactively manage my business.
Weekly budget variance reports for prime costs that my managers come to the manager meeting telling me about their numbers if they missed, why and what they did to change it and what they’re going to do the next three weeks of the month to get back on budget. So huge. You need to have systems and reconciling your cash on a daily basis to make sure you have the money to pay your bills. Now look, I know this list sounds overwhelming. That’s because it is.
And the crazy part is it’s only a partial list. There are plenty of things for you to do in your restaurant every day that need a system that I didn’t list. Like how to handle poor customer experience in your restaurant versus on social media. Again, not to be a broken record, you need a system, a process, a way to doing anything and everything in your restaurant. This means there are no systems that are too big or too small. By systemizing your business, you’ll be able to have, well, a trainable financial result.
You’ll be able to give up scheduling and ordering without giving up your checkbook. You’ll be able to give up training and day-to-day operations and feel comfortable things are getting done your way. You’ll be able to have managers who know what their job is, how to do it, how well it should be done, more importantly by when. You’ll be able to hold them accountable because now it’s answerable. Instead of a negative, it’s a positive. You’ll be able to do what’s important, such as budgeting, marketing. developing your managers, training your managers, holding them accountable, leading your business forward to success, becoming the leader your restaurant needs.
See, when you have systems in place and managers executing those systems your way, there’s still going to be challenges, but you’re still going to be able to have people make mistakes still deal with labor issues and costs of goods sold, but you have a path to make change. And because you have that positive, proactive path to change, because there is a system, a process, a way to proactively run your business, you’ll be able to keep your passion for the business.
You won’t be taking so many beatings that you go, I don’t want to do this anymore. You’re going to be like, hey, I’ve got a growth mindset. Yeah, there’s challenges, but I can outlearn it. I can outwork it. I can outspend it. I can find my way around this and lead my business to success and this way you’ll never be burned out. You’ll never be in a position where you’re a prisoner of your business. Instead you will have what we call restaurant prosperity, freedom for your restaurant and the financial freedom you deserve.
If this is something that excites you, that you know that this is possible in your business and there’s even more work to be done that we’re really never finished and you want help going down this journey, I can help you. Any number of ways you could buy my book, Restaurant Prosperity Formula, What Successful Restauranteurs Do. You could go to my website, go up to the top, find live seminars, and you could attend my next live two-day seminar, Restaurant Transformation Seminar. Or you could click on the link to schedule your discovery call with my team to eventually get on my calendar to where you could look into my restaurant transformation intensive group coaching program.
Now if I’m not the right person, there are other coaches, there are other systems, there’s other information. There’s nothing new in this business. It’s whether we connect, whether you feel like I can truly help you and you’re ready for the help. Because I’m gonna tell you right now, you need to maintain your passion for the business. There will always be challenges. You’ll never be finished. I suck. I create work. But in the same respect, I can get you the freedom from your restaurant, the freedom you deserve to be present with your family, to never miss out on those opportunities. Whether it’s see your kid in their first sporting event, see them graduate your parents’ 50th wedding anniversary, or just to have dinners home with your family. as well as be able to pay your bills and do whatever you’d like because your restaurant is making you the money you deserve.
See, when you put systems in place, you impose your will without being there. You not only have the freedom from your business, but you have managers who know what to do because they follow your system, your process, your way, which means they are ultimately making you the money you deserve. And oh, by the way, allowing you to keep your passion for the business. So if you want to make change in your life, in your business, and you’re ready for these systems, take me up on any one of the ways I can help you. Book, seminar, or coaching. I’d love to work with you.
Hey, that was an awesome episode. I want to thank you for taking the time to take action on building a better, more prosperous restaurant. Before you go, I want to give you these three thoughts. One, by combining leadership and taking action with systems and training being checked by accountability, you are on your way to creating prosperity for you and your restaurant. Two, I have something I need from you. Please leave a review on Apple Podcasts, Spotify, or wherever you happen to listen to podcasts. By leaving us a review, other restaurant pros seeking out this information are able to find it. I read the reviews and hearing how this information has benefited you does wonders for me.
And three, if you find any of the discussions helpful, share them. The more restaurant pros who have access to them, the better we become as an industry. com. Be passionate about what you’re doing. Be persistent, but more importantly, become better and help everyone around you become better. And your restaurant is going to kick some ***.