Restaurant Operations Management: What You Need to Know

All tasks in a restaurant are interconnected. For example, kitchen managers rely on software to let them know how much expected inventory they have in stock. Inventory was ordered based on par levels, which are set based on sales forecasts, which are in turn determined by how many guests you’ll serve and what they’ll order.

The list goes on and on, but the point is that if something goes wrong in a restaurant’s plan, it might only be a matter of time before the domino effect kicks in and has an impact on your guests, your staff, and your bottom line.

That’s why restaurateurs rely on restaurant operations. With clearly defined and enforced restaurant operations, restaurants achieve maximum efficiency and profitability. With this efficiency, staff knows exactly what to do and when to do it, and guests enjoy a delightful experience with your brand.

But the term itself is broad enough to impose a simple yet essential question: what exactly is the concept of restaurant operations?

This post will help you understand what restaurant operations can do for your establishment, the circumstances when focusing on this area can be the most impactful, and how you can improve your restaurant’s operations.

What Does Restaurant Operations Mean?

The term ‘restaurant operations’ refers to the process by which a restaurant is run. Any time there is a set way of doing something in the restaurant, it falls under the category of restaurant operations. The term can refer to the logistics of any and all tasks in a restaurant, including its finances, its kitchen, its staff, and its service model. For successful implementation of these processes, restaurants often rely on tools for accountability and optimization, including technology, templates, systems, and planners.

Areas of restaurant operations

While restaurant operations touch every corner of running a restaurant, here are the areas where having restaurant standard operating procedures can make your job a lot easier.

Finances

Ultimately, every decision made in a restaurant boils down to finances.

Portion control in the kitchen saves on inventory, which helps keep the restaurant profitable. On the other hand, skimping on ingredients increases the likelihood that a guest won’t come back – and may even tell others not to do the same. Regardless, this situation would result in a negative impact on the restaurant’s finances.

More concretely, a restaurant should have a financial plan in place, and be prepared to address the following questions:

• How and where is the restaurant’s profitability and revenue recorded?
• Does the restaurant outsource any financing or accounting work?
• How is the restaurant’s budget broken down between key expenses like food costs, labor, and fixed costs?

Some tools that help out in this area include restaurant accounting software, as well as processes that restrict profit loss like portion control and employee scheduling software that promotes time clocking integrity.

Recommended Reading: The Ultimate Guide to Restaurant Costs

Purchasing & Ordering

Nestled under the umbrella of restaurant financing are the practices of purchasing and ordering. For a restaurant to operate efficiently, it needs to be stocked up with the right amount of inventory – however, it can’t be so stocked up that food waste becomes an issue.

Regarding operations, restaurants tend to utilize sales forecasts to polish their purchasing and ordering processes. By relying on historical sales data, you can get a better grasp on how many of which menu items might be sold in a given day, month, holiday, or season.

Operations Management

Adhering to restaurant operations is paramount when handling time-sensitive tasks – which often means the physical work it takes to keep the restaurant efficient. For example, restaurant accounting can largely be delegated to software with some extra manual work from the manager and/or owner, but every single day in the restaurant:

• Inventory arrives and needs to be put in the right place by the right people.
• Food stations, dining room tables, and counters need to be functional and sanitary at the beginning of each shift.
• Tables and surfaces need to be cleaned frequently so customers don’t have to wait too long (and can feel safe when dining at your restaurant).

These are the areas where standard operating procedures (SOPs) are essential. Below are some of the more common areas of restaurant operations management that should be mastered as soon as possible.

Receiving & Storage

Once the inventory levels are set during the purchasing and ordering stage, restaurants need a plan in place for receiving and storing food before it’s prepped for guests. Managers need to have a process for getting needed inventory into the restaurant, and must know:

• Where the food is coming from, as in which vendors and inventory suppliers.
• When inventory shipments will arrive, as in which days of the week and which time of the day.
• Who is responsible for moving the inventory to the right storage and preservation space in the back-of-house when it arrives.

Employees should also be briefed on all storage matters. For example, when new batches of perishables arrive, should they be placed behind any older deliveries to ensure the restaurant follows the first-in, first-out inventory method?

Tools used by restaurants to develop this process include inventory software and checklists for when deliveries arrive.

Preparation & Cleanup

Each shift tends to be bookended with cleanup from the previous shift and preparation for the next one. Restaurant operators need to plan out which tasks need to be done, when they should be done, and who the best people to do them are.

For example, during the 3-5 pm time frame, cleanup might include a thorough cleaning of kitchen areas by the BOH team and a floor sweeping and sanitization of tables in the front of the house. For prep, cooks would restock their work stations and FOH staff might prep tables and utensils for the first dinner guests.

Typically, restaurants rely on checklists to ensure all tasks are complete on a daily or shift-by-shift basis. Checklists come in handy in all phases of restaurant operations, but given the justified sensitivity around food safety, it’s inexcusable to miss the mark on health and cleanliness. Task management apps can also simplify the creating and tracking of checklists.

Customer Service

Customer service can make or break a guest experience. Customers are more likely to speak about their experiences with others when they’re negative, as only about one in four consumers would stay silent about a negative interaction with a business. This word-of-mouth effect could turn people away from your restaurant before they’ve even tried your food.

This means you should have a customer service strategy that focuses on delighting your customers at every turn – and that everyone in your staff should know these best practices.

For instance, do you have a process in place for when a guest demands a refund, even though it appears there is nothing wrong with his order? What about when the server enters the wrong order in the POS and doesn’t realize it until they get to the table? Having a clear, customer-focused resolution to these common problems can create a perfect guest experience with excellent customer service – and safely salvage it if something falls short of expectations.

Service Model

A restaurant’s service model might seem straightforward – after all, how complicated is it to greet guests, take their orders, bring them their food, and drop off the check?

The short answer: this process is extremely variable and based on the restaurant’s concept. A high-end steak house emphasizes a level of formality and professionalism that would seem confusing at a small-town neighborhood diner.

For example, at a casual family restaurant, the service model might look like this:

1. The host greets the party and seats them.
2. Within three minutes of seating, the server acknowledges the party, greets themselves, and then takes a drink order as soon as possible.
3. Upon returning with drinks, servers ask if the party is ready to order. If so, the server takes it and sends it to the kitchen ASAP by entering it into the POS.
4. At least once before the food arrives, the server stops by the table to see if guests need anything, like a refill or more bread.
5. The server or food runner brings the food to the table and asks if the guests need anything for their meals.
6. The server checks in every five-ten minutes to see if the guests need anything while eating.
7. Once everyone appears to be finished, the server asks if they can clear off the table, get to-go boxes, or if anything else is needed before the check.
8. The server drops off the check and returns to the table within five minutes to close the tab.
9. The server returns with the guests’ change or credit card receipt, thanks the guests, and says they look forward to seeing the guests again.

Naturally, this model will vary at a different restaurant concept, and would even differ at this same restaurant for takeout and delivery orders. It’s worth outlining the service model steps for all order types in your restaurant and ensuring your staff is familiar with them. That way, it will be easier to spot opportunities for improving operations in the service process.

Human Resources Management

Recruiting, hiring, onboarding, scheduling, engaging, paying, and losing employees all surface up into restaurant HR management.

The turnover rates in restaurants are infamously high. On average, a given employee stays at a restaurant for less than two months – and it costs nearly $6,000 every time it happens. Restaurants need an operating model in place to ensure the right employees are hired, well-trained, actively engaged, feeling productive, and ultimately retained for as long as possible.

Staffing

Hiring

Having an operations strategy for hiring means developing and sticking to a proactive and proven method for posting job availability, actively recruiting top talent, and making speedy and competitive offers to the right candidates.

To expedite the hiring process, restaurants may decide to:

• Use hiring software or post open roles on restaurant job boards.
• Offer an employee referral bonus program to incentive peer-driven applications.
• Hold frequent walk-in interview days to consistently source interested applicants.

It’s also easy for the actual hiring process to be dragged out – selecting an applicant, making an offer, negotiating pay, and running background checks might take more than a week. Again, restaurant hiring software (or at the very least – an abundance of communication with candidates) tends to make this less of an issue.

Recommended Reading: Restaurant Job Interview Questions

Training

Staff training needs to strike a delicate balance of being welcoming and informative. New hires need to feel that they made the right choice by accepting your offer, but also that they know exactly what is expected of them in the role.

Larger restaurants and groups might have a training class for new hires, while independent businesses might sit down with new hires one-on-one and go over the restaurant’s employee handbook. Either way, restaurants benefit from a documented employee training manual to ensure a universal yet customizable approach to new hire onboarding.

Scheduling

Scheduling work shifts is an often overlooked cog in restaurant operations. If a restaurant is understaffed, guests have to wait longer for service and employees feel overworked. If it is overstaffed, the business wastes money on unnecessary labor.

Either way, the restaurant loses money due to the ramifications of improper scheduling.

That’s why many restaurant operators rely on restaurant scheduling software to build demand-based schedules and allow employees to submit availability and trade approved shifts, keeping the restaurant optimally staffed at all times.

Restaurant Operations Improvement Tips

Restaurant operations should be in a state of constant analysis and improvement – but changes should never prohibit employees from doing their jobs or guests from enjoying their dining experience.

Here are a few ways to ensure restaurant operations are monitored, analyzed, and improved upon in a purposeful and productive way.

Use Restaurant Technology

Restaurants continue to benefit from innovative technology built specifically for the industry. Tools such as restaurant task management software and automated manager log books allow you to delegate tasks and record notes about the most important duties in the business.

From a broader standpoint, restaurants use advanced dashboards to measure the organizational health of the business with real-time labor and sales reporting, which inform future decisions and strategies on hiring, scheduling, and inventory ordering.

And that’s just the beginning – POS software streamlines the ordering process, scheduling software empowers employees, and inventory management software keeps the kitchen stocked for guests’ favorite dishes.

With better technology, restaurants cut back on wasteful spending and activities, become more efficient, and create a world-class guest experience.

Build a Restaurant Operations Manual

Chances are, your restaurant has an operations plan in place. Everytime you find yourself following a habitual way of doing things – from cooking a specific dish to interacting with guests in a certain way – you’re adhering to your restaurant operations.

Ideally, your restaurant would have these processes outlined in a restaurant operating manual, which is periodically revisited to consider which approaches, technologies, or systems could be adjusted or added to improve the status quo of the business.

Improve Employee Communication

A more cohesive staff works better together, but to get to that place, you’ll need to emphasize employee communication. The line of communication can be opened through a restaurant team communication tool, but supplemental best practices should be implemented as well.

For example, consider:

• Integrating pre-shift meetings for the FOH and BOH crews to interact with each other before each shift.
• Offering continuous training and education to employees, or partnering up newer hires with an experienced staff mentor.
• Encouraging shift swaps (when approved) for employees to collaborate with teams from different shifts.

Engage Your Staff

Put simply, an engaged workforce equates to a more productive workforce. Highly engaged employees will generate 147% more profit than employees who are not as engaged. This happens because motivated employees are more likely to feel appreciated, take pride in their work, and feel incentivized to provide an optimal experience for customers.

Employee engagement can be improved in a myriad of ways – from practices employee gamification, to offering professional development opportunities, to utilizing employee engagement software. By investing in these areas, your employees will pay you back with a highly efficient operation.

Reduce Food Waste

Restaurants in the United States spend an estimated $162 billion on wasted food annually – and anything that your restaurant is contributing to that amount is already too much.

By reducing food waste, you’ll see a direct impact on your bottom line due to more accurate menu pricing, inventory purchasing, and ingredient portioning. This ensures that as much inventory as possible ends up on a customer’s plate.

Again, restaurants can use an inventory management software to keep track of expected versus actual inventory levels to see where variance and spillage are the most severe, then put guardrails in place to reduce waste.

Frequently Asked Questions

What is a restaurant operations manager?

A restaurant operations manager is the individual most responsible for ensuring the restaurant operates at maximum efficiency – specifically for all aspects of the business that have set rules and processes. While larger restaurants and multi-location businesses might have a dedicated individual or team for restaurant operations management, the responsibilities tend to fall to the shift manager, general manager, or even the owner in small restaurants, who must perform operations management work on top of their normal duties.

Why is a control system important for a restaurant operation?

A control system is a process that yields a desired outcome – such as always having a certain ingredient stocked in the kitchen. Usually automated through software and technology, a control system either takes action (or alerts someone to take action) to reach that outcome. For example, an inventory control system might alert you when a popular item is running low to ensure there’s enough of it for an upcoming shift. Control systems are outcome-focused and ensure the restaurant’s operations strategy remains results-oriented.

How do I make a checklist for a restaurant?

A restaurant operations checklist can be made by typing out all of the categories where a restaurant task may fall (finances, staffing, customer service) in a document or spreadsheet. From there, individual tasks in each of these areas should be listed out under these categories. Optionally, the person/team responsible for the task, the time it should be completed, and how often it should be done can also be listed out. To get you started, we’ve included a restaurant operations overview checklist for free download here.

In Closing

Restaurant operations might seem like a bigger concept than you had initially thought – and that’s true. The process of optimizing restaurant operations has a positive impact on every single aspect of your restaurant, so get to work on choosing the right technology and implementing the best processes to improve your restaurant operations.