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Basic Restaurant Business Facts Your Employees Should Understand

They say that the key to getting the most out of our employees is motivation. Motivation, respect, involvement, empowerment and a few more big words. But there’s one thing that’s also as important as these concepts, something a bit more on the practical side: knowledge about the business they’re in.

Sure, orientations do that—give the staff enough overview of what the company sells, and a few more product knowledge. But does your employee really know how your restaurant actually works? No, we’re not talking about the entire operations that include financials—we know that it is not quite a wise idea to let employees in on that—we’re talking about a few business fundamentals that restaurant employees should know so that they will understand the basis of some of your policies. They will recognize the reasons why you are insistent on a certain rule that you have imposed, and upon knowing the reasons, they will exert efforts to abide by it.

Some of these facts include:

Profit is the difference between sales and expenses. This is a simple starting point—making them realize that if your expenses turn out higher than your sales, the only way for the company to continue operating is if there’s someone who is willing to shell out extra money to cover the difference. If the cash runs out, you’ll be closing shop.

Expenses are two kinds—the fixed and the variable. Your staff needs to understand that there are expenses that they can control—the variable ones, such as labor costs and the ingredients that your chefs in superior chef apparel use in preparing a cocktail or a pizza. While there are expenses that they cannot control, such as fixed costs, which include rent, new equipments and insurance, the profit that the restaurant makes on the products they sell (the cocktail and pizza) are expected to pay for the fixed expenses.

Liquor and food stock are considered cash. Your employees need to understand the value of your food and liquor inventory –they are good as cash.

Small items can surprisingly cost a lot. Demonstrate to them how much is the total cost of a teaspoon, a napkin, strawberry, a spoonful of ground coffee and an olive. They’ll be surprised how much money is lost when these things are wasted or lost every week.

It’s more profitable to boost sales than cut costs. When faced with some profit dilemma, many restaurants resort to cutting costs rather than increasing sales—something which is not considered as the wisest of moves. Smart restaurant management means being able to handle both, making sure to keep a balance between the two. When you have employees who enjoy selling, find ways to keep them.

The biggest expense in a restaurant is the staff. That’s the reason why the bosses take a closer watch on the roster, and insists on productivity all the time. It’s the explanation why it is very challenging for a restaurateur to continually give wage increases, unless that increase is justified with an equal growth in productivity.

Staffing costs do not end with wages. There are the workers’ uniforms (aprons, chef apparel, restaurant uniforms and the like), costs of training, staff meals and leave credits, which are called on-costs or extras, all adding an extra 30% to the total staff expense.

While there would be employees who would only shrug this off after your restaurant training, many will still feel better knowing that you have trusted them enough to let them in on your other concerns—making them partners instead of mere employees. And as your business partners, they will now walk with you in finding ways to improve the company’s performance. They will strive to follow the policies you have imposed, this time with full knowledge of the consequences that their action brings.