In the past few blog posts, we’ve discussed the improving Restaurant industry and the general good feeling operators have about the future. Recently, we saw first hand what the good vibes were all about. The National Restaurant show was last week in Chicago. Thousands of restauranteurs walked the halls of the McCormick Center to check out the latest software innovations, inventory solutions, hardware and cookware. Needless to say, there were a lot of amazing technologies. But most importantly was the feeling we got from operators as they visted our booth.

There seemed to be a sense of anticipation about the future, instead of dread. The franchisees, owners, managers and chefs meeting with us talked about improving operations to account for changes to the their menus and growth strategies. There was a “we can do this” glow on their faces. And we weren’t the only ones who thought this… As we researched new ideas while meeting with partners, the same was said. So here’s to 2012 and the good vibes to come! Thank you to all who visited our booth…

It’s hard making ends meet in uncertain times. We often question whether the effort to keep a business afloat is worthwhile if all we’re going to keep getting is bad news. To a certain extent, the constant forward momentum of the restaurant business serves as a distraction; serving customers is more important at times than worrying how to get them in. Whether or not the news is good or bad, it may not have any real effect on which restaurants die, and which ones survive in the end, perhaps it just lengthens the timeline. One thing is certain however: good news can bolster our spirits, and give us the drive to survive. We all know that restaurateuring is much more sustainable when it comes from passion, and not the need to bring home a paycheck.

That’s why a recent NRA jobs report, seen here in an article from the Huffington Post may fuel the fire of an optimistic recovery. According to our friends at the National Restaurant Association, 560,000 new restaurant jobs have been created in the last year, with almost 200,000 coming in the last six months. If the cynic in you says “Yes, but that’s only in restaurants, a small fraction of the jobs market”, think again! Tilman Fertitta, CEO of Landry’s Inc (Bubba Gump, Claimjumper, Crab House, Landry’s and Simm’s Steakhouses, and more) claims their operation can’t fill positions fast enough in their corporate offices. The lesson being that restaurant jobs beget administrative jobs, beget production and distribution and so on…

This good news comes amidst some indications that the overall economic recovery is a notch above stale, but let’s keep things in perspective: remember when you were to young or too busy to care what the idiots on Bloomberg TV had to say? Economic Armageddon does not ride in on a monthly jobs report. We’ve lived high on the hog in this country for quite a while now. Conversely, we’ve survived worse than a “recession” in this country (though not many of us were around for the “Depression”). Its okay to prosper on the support that our loyal customers, friends and family provide and laugh at the unpredictability of a financial system that doesn’t really make any sense to the best-groomed talking heads, despite their conviction. Your passion as a restaurateur, and my appetite can get us through just about anything!

As a restaurateur, entrepreneur or business owner for that matter, how do you weigh the value of the services you purchase? I ask because I’m faced with proving value, whether qualitative or quantitative, virtually every day. I’ve followed the herd in terms of considering ROI (return on investment) as the Holy Grail by which we grade all goods and services. But that’s left me wanting.

ROI is golden because it claims a metric value return based on the money you put into something, but it can be misleading. When you bought your new iPhone, did you consider ROI? I suspect on an emotional level, you did, but that’s not really ROI, that’s gratification.

Let’s not reflexively discard the inherent value of a product because we purchased it based on sexiness; items like smartphones do provide more and more streamlined operating systems, efficient communication tools, entertainment, ergonomics and “wow” factor. Let’s go back to that sentence and look a little deeper: streamlined operating systems. When I bought my phone, did the salesman have to tell me it was going to make me more efficient? Not likely. I knew it intuitively. A cleaner interface, more text, data, email and web capability in the same screen? No-brainer. Did he have to show me a spreadsheet quantifying how quickly my girlfriend would laugh, or find offense at the last text I sent her, and respond in kind? Nope. I knew it would work well, and also improve my communication experience.

And that brings me to what I consider the oft-neglected brother of ROI, something we call ROO, or Return On Operations. Don’t worry, its got numbers too, but it also takes into account the enormous qualitative value that comes with an a system that’s pleasurable to use, makes communication easier, has an appealing interface, and represents the professionalism we hope to convey through our brand as restaurateurs. Notice, every adjective and adverb I used in that last paragraph referred to a “qualitative” instance. But I can’t deny their value. Good systems honor the metric processes we all depend on, while embracing the aesthetics made so popular with the Apple brand or, let’s get real, virtually everything from every brand we purchase. Back office software seems to be the only place where we make the dubious connection that the uglier it is, the better it must be!

In summary, do your due diligence certainly, but don’t assume that the guy selling you the system that looks like a 90’s era calculator has a leg up because of his sensibility and pragmatism; those are buzzwords for “behind the times.” You deserve the whole package.

Troy Davis, Owner of The Melthouse Bistro

“The Digital Dining Dashboard was a Godsend! Let me put it bluntly… We had been operating without the web-based reporting tool and as soon as the implementation was completed, we found thousands of dollars of fraudulent discounts. I’m an owner with a lot on my plate, but it took me only a few seconds to see the report and take action.” Said Troy Davis, who along with his wife Susan, are owners of Melthouse Bistro. And it is with this quote that we wanted to start our blog post today, but before we go further, let’s look at the concept to define what our folks did to help reach resolution on this issue, which impacts a lot of new restaurants.

Located in Milwaukee, WI in the heart of the revamped Kenilworth Apartment complex, the Melthouse Bistro brings to light a different kind of fare. Separate from the normal, Melthouse offers Wisconsinites gourmet grilled cheese sandwiches containing fresh Wisconsin cheeses on a wide selection of artisan breads. “We wanted to offer a more upscale grilled cheese sandwich than what you would find in other restaurants. A creative taste to your grilled cheese with ingredients like gouda, thick-cut Pecanwood Smoked Bacon, Apple Butter, and Country Buttertop Buns.” Said Davis. The Melthouse Bistro also offers a wide selection of premium craft brews and wines, many produced in the state of Wisconsin!

The Melthouse Bistro has been using the Digital Dining Dashboard for only a few weeks and achieved ROI almost instantly. Using the web-based reporting tools and labor scheduling solution, Davis and his team was able to manage operations above-the-store all from a web-browser. The data contained in their Digital Dining POS is polled and sent to the reporting dashboard and reporting functionality. Next, Davis wanted to better account for scheduling and labor costs. The company also purchased the labor scheduling solution to push schedules into the POS and create a faster way to manage labor. Finally, the Melthouse Bistro is also just starting to implement the Digital Dining Dashboard inventory management solution which will help control food costs by creating an accountability stream on purchases, food waste, recipes and more.

“We have been very pleased with the solution. I’d say that we’ve recorded an ROI of about 300% (in just three months of usage). I say this by calculating what we’ve spent, what we identified via fraud and what we anticipate improving via the inventory module.” Said Davis.

This week we had the opportunity to sit down with one of our industry’s social media experts. Michael Atkinson, www.fohboh.com, gave us about 30 minutes of his day to talk about what it takes to succeed in today’s social media environment! We’ve enhanced our podcast with a screencast, so you can watch along as we go through the conversation. Thank you Michael!

Click here to view the embedded video.

If you’re interested in joining one of our podcasts, please contact Walker at wthompson@whentomanage.com.

I read an interesting article today about the Great Harvest Bread Co., headquartered in Dillon, MT; it covered the franchises’ overarching philosophy which is to set its franchisees free after a one-year apprenticeship to run their stores in the time-honored mom-and-pop way — but with “handrails,” as former CEO Tom McMakin called the help that’s available if wanted. And, most importantly its “learning community” aka collaboration.

Furthermore, the article covered several points we at WhenToManage stress to new/current clients alike about developing processes that drive growth, increase collaboration and promote a hands-off managerial approach.

While most franchisors dictate everything about their franchisees’ operations in order to ensure a predictable experience for customers everywhere, Great Harvest doesn’t even require that its franchisees use the same bread recipes. In other words, Great Harvest says to its bakery owners, do whatever you want. Except in one respect, which makes all the difference: Every owner in the chain is encouraged to be part of Great Harvest’s “learning community.” Those who join (and most have) must share information, financial results, observations, and ideas. If asked questions, they must give answers. They must keep no secrets. They must, as McMakin described it, “let things go.” The result is what academics would call an intentionally created “complex adaptive system.” A learning organization.

At its simplest, the idea is to let people “create their own enterprises but stand on the shoulders of existing owners,” as McMakin put it. To that end, Great Harvest both facilitates the casual swapping of ideas and maintains formal mechanisms that steer owners to the best sources of help.

For instance, Great Harvest staffers provide franchisees with a top 10 list, a rundown of the 10 best-performing bakeries in 14 statistical and financial categories — from total sales (the biggest Great Harvest shop tops $1.3 million), net profits, and payroll, to costs for ingredients, utilities, promotions, and “continuing education.” If a franchisee has a problem controlling labor expenses at their store, Great Harvest staffers tell the owner to call up the bakery owners who’ve got that figured out and get their advice.

Sounds great, right?! But where does a multi-unit operator start — there are so many factors to take into account 1) various POS Systems, 2) a myriad of SKUs or Recipes and 3) the range of Manager/Employee Capabilities to name a few…turns out, we have the most appropriate solution available on the market, called Enterprise Management.

When packaged with our restaurant management solutions (Employee Scheduling, Inventory Management and POS Intelligence), Enterprise Management facilitates the exchange of information like Great Harvest does by accumulating, processing and distributing insightful data from a variety of sources, while giving the super-user one place to manage the entire operation. Simply put, it streamlines operations and opens the door to a “learning community” that can promote growth.

If you are interested in learning more about our web-based Enterprise Management solution (featuring a flexible API), ending the need to sift through manually generated reports faxed in by franchisees or switching platforms to compare data, contact us today! (888) 316-8861 or click the Support button on the left – we would love to show you how we can help you create a self-managing restaurant.