Managing a restaurant these days is full of challenges. First, the industry is very competitive — there are over one million restaurant locations in the US, and thousands of new businesses open every year.
Restaurant owners and managers also have to keep up with ever-evolving customer expectations, all while juggling inventory, rising food prices, and staffing needs.
This complexity isn’t exactly a recipe for success. A good portion of new restaurants will fail within the first few years because of issues like poor resource management, insufficient capital, or the wrong location — estimated failure rates range from 30% to 90%.
Many businesses in the industry are leaning more on technology to help streamline operations and gain a competitive advantage. As a result, new technology has become a must-have for restaurant operations.
This article takes a look under the hood and details what a well-functioning restaurant looks like. It also shows how new technology, such as AI and innovative meal delivery methods, are not just trends but essential tools for your operations — whether you’re simply thinking about opening a restaurant or want to improve your current restaurant’s efficiency.
By embracing these technologies as a restaurant owner or manager, you can stay ahead of the curve and prepare for a future where customer satisfaction and innovative technology go hand in hand.
What are restaurant operations?
Restaurant operations encompass the overall management and day-to-day functioning of a dining establishment.
Within operations, a variety of roles and responsibilities work together to deliver great food and memorable experiences to customers. At the core of these operations is the chef-led kitchen staff, who are responsible for menu planning and food preparation.
The front-of-house team, which includes hosts and waitstaff, focuses on welcoming and serving guests.
Restaurant operations are also supported by a behind-the-scenes network of managerial functions, such as personnel management, purchasing and inventory, finance, and marketing.
From the general manager to the kitchen staff, each employee contributes to the goal of running a smooth-functioning, profitable operation.
Restaurant operations breakdown
Restaurants rely on several operational groups working together in harmony. These groups can be broadly categorized into the following areas (note, though, that small and medium-sized operations often place a single individual in charge of more than one area):
Kitchen operations
Job roles:
Chef
Kitchen staff
Dishwashers
Responsibilities:
Menu planning
Food preparation
Inventory management
Quality control
Kitchen staff training
Food safety and adhering to hygiene standards
Front-of-house operations
Job roles:
Host/hostess
Waitstaff
Bartenders
Responsibilities:
Greeting and seating guests
Taking orders
Serving food and beverages
Managing reservations
Handling customer inquiries and complaints
Purchasing and inventory control
Job roles:
Kitchen manager
Purchasing manager
Responsibilities:
Sourcing and purchasing ingredients
Managing supplier relationships
Tracking inventory
Reducing waste
Ensuring cost-effective operations
Human resources and staff management
Job roles:
General manager
Human resources manager
Responsibilities:
Staff hiring
Training
Scheduling
Payroll management
Employee performance evaluations
Ensuring compliance with employment laws
Financial management
Job roles:
General manager
Financial manager
Responsibilities:
Budgeting
Financial reporting
Managing cash flow
Analyzing financial performance
Making decisions on pricing and cost control
Marketing and public relations
Job roles:
Marketing manager
Public relations manager
Responsibilities:
Restaurant marketing and promotion
Managing social media and the restaurant’s online presence
Advertising
Organizing promotional events
Building positive, lasting relationships with customers and the local community
Health and safety compliance
Job roles:
Safety officer
Compliance manager
Responsibilities:
Ensuring the restaurant complies with health and safety regulations
Conducting regular inspections
Employee safety training
Managing legal compliance issues
Facility management
Job roles:
Operations manager
Maintenance manager
Cleaning staff
Maintenance staff
Responsibilities:
Overseeing the physical maintenance of the restaurant, including equipment, utilities, repairs, and renovations.
In large restaurants or chains, this spectrum of functions is typically managed by a general manager assisted by a group of sub-managers or area heads. In small restaurants, on the other hand, several functions are often combined into one position. For instance, the general manager might directly oversee facility management, HR, inventory management, and marketing.
Modern software makes it possible for a small management team to stay on top of a range of responsibilities like this.
Another effective option for small restaurant businesses is outsourcing portions of their operations, such as HR (to an HR service provider), finance (to a CPA or accounting firm), or marketing (to a marketing consultant or agency).
10 tips to improve your restaurant operations
Even in the best restaurants, there’s always room to improve operations. Imagine how streamlining workflows, reducing costs, and taking your customers’ dining experience to the next level could drive business growth.
Here are 10 practical strategies and tips for ongoing improvement that will generate a significant return on your investment of time and energy:
1. Create comprehensive reference materials
Detailed reference materials can help you achieve greater consistency and efficiency in the services you provide. Examples of helpful documentation include the following:
A daily restaurant opening checklist
Standard operating procedures (SOPs) for kitchen practices
Customer service guidelines
Recipes
Compliance requirements
Emergency response protocols
It pays off to make these documents accessible to your staff as electronic documents, too. It’s far easier to update files when they’re online — it’s also helpful to frontline staff to have access to the recipe database on their phones when customers ask about ingredients.
Periodically update your reference guides and review them with the appropriate staff members so that everyone stays on the same page when it comes to the restaurant’s operations.
2. Practice efficient waste management
Restaurants tend to produce large amounts of waste. In fact, according to the National Restaurant Association, “commercial kitchens typically waste 4% to 10% of purchased food before it reaches the customer’s plate.”
This waste translates into good money going down the drain, so effective waste management is a must for cost control. Plus, it helps with environmental sustainability.
Waste management involves analyzing waste patterns to identify areas of excess, such as food spoilage or over-ordering.
To reduce waste, implement practices like portion control, proper storage techniques, and donating unused food items to local homeless or animal shelters. Creatively repurposing left-over ingredients can also help. For instance, you can use veggie scraps to make soup stock.
Implementing inventory tracking is also beneficial for maintaining optimal stock levels and minimizing waste. As your restaurant team might have limited access to laptops, they should be able to log inventory details on their phones instead. This is particularly useful when they’re checking inventory in the storage room.
3. Improve cost management
Strategic cost management helps minimize expenses and maximize profits. Here are a few ways to do this:
Negotiate with suppliers for better prices to lower food costs.
Control labor costs through efficient scheduling with workflow software.
Regularly review and adjust menu prices.
Monitor utility usage and adjust use patterns as needed.
Invest in energy-efficient appliances to save on energy costs.
4. Use technology for operational efficiency
You can simplify various aspects of running a restaurant by using project management technology.
For instance, Lark can streamline most of your restaurant’s operations, including tracking inventory, scheduling staff for their shifts, and employee communications. Lark allows frontline employees across restaurants to get their routine work done easily and helps track daily revenue on mobile devices. In addition, it enables restaurant managers to arrange shifts and calculate labor costs conveniently all in one place.
And in terms of financial management, Lark offers solutions such as finance templates that make record-keeping and budgeting easier.
The more restaurant managers automate these processes, the more they can focus on customer service and business growth.
5. Invest in employee training and development
Since unskilled staff — like an untrained cashier — can throw a wrench into your restaurant operations, it pays off to invest in employee training.
For instance, regular training sessions on customer service, food safety, and operational efficiency can improve the quality of service. As a bonus, they can also improve employee morale and retention. Take the time to record your training sessions and put them online so that they’re readily accessible to all who need them.
Another helpful practice is to cross-train employees in different roles. This will give you more scheduling flexibility and reduce stress related to personnel needs. It’ll be comforting to know that if a waiter suddenly falls ill, one of the hosts can step in right away.
6. Focus on customer experience
Continuously improving the customer experience is another key to a successful restaurant.
Use surveys or comment cards to gather customer feedback on areas like the restaurant’s food quality, customer service, and overall atmosphere. Then, act on that feedback, whether it’s constructive or critical. Your customers will appreciate that you’ve taken their opinions seriously.
7. Regularly evaluate and innovate your menu
Regular customers visit your restaurant to savor their favorite dishes, but they may be interested in some new culinary experiences as well. So, regularly update the menu to keep the restaurant fresh, exciting, and relevant.
For a good balance between old and new offerings, consider seasonal updates and occasionally introducing innovative dishes that can attract new customers.
To help you decide how to update your menu, regularly analyze your sales data to identify popular dishes and remove underperforming items.
8. Practice effective inventory management
Proper food inventory management prevents overstocking and waste. It’s helpful to use a first-in, first-out (FIFO) system so that older stock is always used first.
Regularly auditing your inventory with inventory management software like Lark will allow you to better track stock levels, reduce losses, and ensure that fresh ingredients are always available. Lark also has a template that can help restaurants manage their inventories with ease.
9. Build a strong online presence
A strong online presence is essential for any dining establishment in the digital age. Online marketing can attract new customers and help to keep the restaurant engaged with the community.
In addition to an up-to-date website, consider setting up social media profiles and posting on them regularly. Another productive avenue is establishing a presence on review sites where potential new customers can read about your restaurant.
10. Analyze your financial performance
Stay on top of how the restaurant performs financially over time. Think of reviewing profit-and-loss statements, knowing your revenue streams in detail, and monitoring key performance indicators (KPIs) or objectives and key results (OKRs).
Regular, detailed analyses of your financial performance will help you better identify trends and set informed goals for the restaurant’s future.
Done regularly and well, the tips discussed above will strengthen your operations and lead to increased profitability and customer satisfaction.
Predicting the future of restaurant operations
As we look toward the future of restaurant operations, it’s easy to see that major changes are on the horizon. These coming transformations will primarily be driven by technological advancements.
Let’s explore how these changes are likely to shape the future of the restaurant industry.
1. Emerging technological trends
AI is set to revolutionize restaurant operations in lots of ways. It can be used for predictive analytics in inventory management, forecasting customer preferences, and optimizing menu design based on data-driven insights.
AI-powered chatbots and virtual assistants could streamline customer service by handling reservations and answering questions.
We expect self-service technologies, including ordering and payment kiosks, to become more prevalent. These systems reduce wait times and allow restaurants to operate more efficiently with fewer staff.
Restaurant technology will likely facilitate more personalized dining experiences, as well. For instance, restaurants might use AI to recommend dishes based on a customer’s past preferences or dietary restrictions. This can create a more tailored and satisfying dining experience for customers.
2. Delivery apps and logistics
The popularity of food delivery apps is likely to keep growing. These platforms could offer more options for customers, such as premium or specialty dining experiences delivered to their doors.
The not-too-distant future might see an increase in the use of drones and robots for meal delivery, particularly in urban areas. This would significantly reduce delivery times and costs, so it could become a lucrative option for both restaurants and consumers.
We could also witness a tighter integration between delivery apps and smart home ecosystems. This would allow customers to order food instantly through their connected devices.
3. The impact of technology and economics on employment
Automation in various forms, from kitchen robotics to AI-driven customer service, could lead to a reduction in the need for employees in certain roles.
On the one hand, this will likely mean fewer employees working in restaurants (a number that currently sits at around 12.5 million in the U.S.).
On the other hand, automation might result in lower employee turnover rates since human roles would shift toward positions that require technological know-how. This shift could lead to a demand for upskilling and retraining programs for existing staff.
The broader economic environment will continue to influence restaurant operations, as well. In times of economic downturn, technology can play a key role in minimizing operational costs.
Reversely, in a booming economy, restaurants will likely invest more in innovative technologies that improve the customer experience and operational efficiency.
4. Customer interaction and experience
Future dining experiences may increasingly include interactive tables where customers can use tablets to view menus, place orders, and even entertain themselves while waiting for their food.
Virtual reality (VR) and augmented reality (AR) could offer unique new experiences, such as virtual kitchen tours or AR-enhanced menus that show dishes in 3D before ordering.
Thanks to technology, there’s an exciting future in store for many aspects of restaurant operations.
Embrace the future of restaurant operations with Lark
Like in many industries, technology is poised to reshape the next few years. From AI integration and self-service kiosks to the impact of delivery apps and the potential of automation, these trends will revolutionize how restaurants operate.
As the restaurant business continues to shift toward a tech-centric approach, the need for effective project management platforms will become increasingly apparent.
With its comprehensive business management tools and services, Lark offers an ideal solution for restaurants looking to navigate these changes successfully and continue growing and flourishing.
Want to find out more? Try Lark for free to see how it can propel your restaurant into the future.
