Jeremy Julian
Jeremy Julian
Minimum wage increases are all the rage today in places like Seattle and Los Angeles, where local governments are phasing in a $15-an-hour minimum for labor over the next few years. While some can look forward to a slightly bigger paycheck, restaurant owners and employees alike are concerned about what these increases will do to their industry.
In June, the Wall Street Journal estimated that profit margins for restaurants in cities or states with rising minimum wages could shrink by one to four percentage points, based on a study by Moody’s Investors Service.
Now, minimum wage staff typically don’t make up most of a restaurant’s team. So why the lost profits? Moody’s says that employers will probably introduce across-the-board raises to keep veteran workers happy and maintain the salary gap between experienced and entry-level employees. This could end up being the biggest cost of a minimum wage increase.
“Casual dining chains such as Olive Garden or Applebee’s, which provide table service, are likely to feel the biggest impact because they generally require more servers than fast-food restaurants. For casual dining companies with 20% of their labor pool affected by the minimum wage, for example, Moody’s said operating margins could narrow by 2.3 percentage points, to an average of 9.7% from 12%, if the [federal] minimum wage rose to $10.10…
“The restaurant industry is already struggling with soft sales as consumers choose to eat at home, so restaurants risk losing more customers if they raise menu prices too much in an effort to offset higher labor costs.”
Moody’s analysis was based on President Obama’s proposal to raise the federal minimum wage to from $7.25 to $10.10 per hour, which failed to pass Congress. If more local governments follow Los Angeles and Seattle’s lead, however, restaurant companies could face even larger declines in profit.
Whatever your opinion is on the minimum wage (and we’re sure you have one), lawmakers are expected to continue pushing for increases. To preserve the bottom line, restaurateurs will either raise prices for customers or find ways to make their operations more efficient, if not both.
While we can’t tell you what the price du jour should be for your soup du jour, the Restaurant Technology Guys know a thing or two about making restaurants more efficient. These tips and “hacks” can provide a little more breathing room for your restaurant’s profit margins.
Upgrading your restaurant with interactive tabletop menus or a mobile ordering system can work wonders, and not just because customers typically order more when given digital opportunities to do so. Linking each table directly to the kitchen via app-based orders also reduces the workload for servers, who can focus on improving customer experience and other tasks.
The initial cost might be intimidating, but by adding these improvements now, you’ll be able to move your restaurant toward more efficient operations, including quicker turnover times and a better customer experience. Also, you’ll have a head start when your competition eventually does the same.
Software based labor management programs like HotSchedules and POSitouch help restaurants manage employee hours by staffing based on budgets and historical data for a particular day and time, and by making it easy to trade shifts.
The software also monitors hours to keep part-time employees under 30 hours a week, so your restaurant doesn’t violate rules that would classify those workers as full-time and eligible for health benefits.
Innovations like a cloud-based POS, real-time labor reporting and analysis, and enhanced video systems can also help managers operate more efficiently. Restaurateurs in areas affected by minimum wage increases can also use these programs to prepare and model operations in the future.
At this point, almost every restaurant owner has heard of online ordering. And for thousands of business owners around the world, online ordering systems have already boosted revenue, increased ticket prices, streamlined ordering, and added a host of other benefits. But that doesn’t mean that some restaurant owners aren’t wary of adopting the new technologies and practices associated with online ordering. Every business owner has a right to choose how to run their business, and lots of restaurant owners simply don’t choose to look into an online ordering solution.
However, for many restaurant owners, the choice not to sign up for an online ordering system is based on some persistent myths about the technology. Every business owner should be able to make whatever choices they see as being best for their business, but it’s best when those choices are based on solid facts rather than myths and misconceptions.
So, for all of the restaurant owners out there still on the fence about a service like Orders2Me, here are the 3 most persistent myths about online ordering.
For many restaurant owners, it seems like common sense that a service as new and revolutionary as online ordering would come along with a huge price tag. But for most business owners, adopting an online ordering system will actually lead to big net profits.
Unless your POS comes natively with online ordering (like NorthStar Order Entry), there are two main pricing models for online ordering systems. Most big vendors like Eat24 and GrubHub take a percentage of every ticket that you process with their systems, essentially cutting down on your profits per dish. And for these types of online ordering systems, prices can indeed be prohibitive; your dishes probably already have a narrow profit margin, and the percentage that Eat24 or another big company skims off of the top can mean that your orders barely make you anything after labor costs, or even result in a small loss per order.
But there is a second type of online ordering pricing system, which vendors like Orders2Me think is a little more realistic. Using a pre-built, user-friendly portal, restaurant operators pay a small monthly fee for as many orders as they can process. With a pricing model like that, restaurant owners can quickly get ahead, since the more orders you sell to online customers, the smaller per dish fee you really pay. If a restaurant owner chooses the right system for their goals, utilizes a service with a small monthly fee and brings in even a humble number of orders, online ordering can end up being very profitable. It’s no myth that some systems are too expensive, but choose the right one, and expense concerns are squashed.
Restaurants can be chaotic, and for the business owners that manage them, it can seem like a daunting idea to throw in any variable that will shake things up. Specifically, restaurant owners often shy away from adopting an online ordering system because they think that online ordering systems will take a lot of training to adopt.
For most online ordering systems though, there is very little impact on restaurant staff, and very little training required for adoption. From the server and front of house staff’s perspective, there are really no big changes. In fact, your server staff may not have to field as many phone orders, giving them time to focus on their guests in the dining room. As for the back of house staff like chefs and cooks, there isn’t too much change either if you choose the right system. Eat24 integrates with your existing order printing system, and allows your kitchen staff to process online orders in stride with the ones that come in from servers. Generally, there’s little to train your staff on when implementing online ordering.
It’s obvious how much online ordering does for customers, but for many restaurant owners, it doesn’t seem like online ordering will do much for their business. This is a big myth, and a hard one to unpack. But restaurant owners should know that if they pick the right online ordering system, they will see some immediate benefits to their business. From increased ticket prices to more take-out and delivery orders, you’re putting your menu in front of hungry internet users who are just waiting for you to satisfy their hunger pangs in a hurry. This ultimately means more profit for your restaurant and a much more efficient restaurant to boot. If you want more info about why this myth is false, browse the rest of our blog.
Is online ordering for every restaurant owner? Not always. But for those that want to put their menu to work online to help feed hungry browsers, the benefits should very much outweigh the myths. And when clear decisions are marred by misconceptions, your business may be missing out on a major slice of the pie!
Rafi Cohen, a graduate of Baruch College & Brooklyn native is the Co-Founder at Orders2Me, an online ordering platform that gives restaurant owners all the features they need to grow their business in the digital age.
The Restaurant Technology Guys are honored to announce that we made Zipscene’s Top 20 ‘People We Follow on Twitter’ List!
Zipscene is pretty much THE authority on effective, targeted restaurant marketing nationwide. We are honored that they follow the Guys on Twitter. We certainly learn a lot from Zipscene as well!
Here’s what Zipscene said about us:
@RestTechGuys: Restaurant Tech Guys: Put simply, these guys keep you on the forefront of what restaurants need to embrace in technology (and what they don’t.)
We always strive to provide valuable information to restaurateurs nationwide, from the reasons why they should incorporate certain technologies into their stores (i.e., what will make their lives much easier and their restaurants run more efficiently) to what’s not worth the cost and hassle. We invite you to follow us on Twitter as well, and as always, please let us know how we can help you!
That’s the simple yet profound concept behind the process known as tokenization.
If you haven’t considered credit card tokenization for your restaurant, you are missing out on one of the most effective and affordable ways to protect yourself and your customers.
More technology? You might be thinking that’s the last thing you need to deal with. But you’re already doing electronic payments, so adding credit card tokenization functionality won’t complicate matters – it will make them much simpler and more secure.
More secure = less theft = happy customers = you sleep better at night.
Tokenization is the process of creating a string of random characters, called a token or alias, to substitute for real data – which in most cases is the customer’s credit card number.
When the customer swipes his or her credit card at your establishment, the credit card number is authorized and sent immediately into a centralized and highly secure vault. There it is stored by the payment processor, rendering it virtually irretrievable. (Don’t worry, this requires no additional equipment in your store.) An index in the vault creates a permanent connection between the credit card number and the new token.
Once the credit card number is tokenized, it returns immediately to your point-of-sale (POS) system for use in place of the actual credit card number. In most cases the last four digits of the card number will correspond to the last four digits of the token, so neither you nor the customer will notice a difference on the receipt. It will appear like this:
Note: Tokenization is not the same as encryption. Encryption involves a mathematical process that renders the credit card number unreadable. Though it is secure, if a hacker has the proper algorithm, the number can be decrypted.
On the contrary, with tokenization, once a credit card number is in the vault, there is no key or mathematical formula to restore the number back to its original form. The only way to retrieve the information is to access the vault, which is virtually impossible to do.
There are a number of benefits to credit card tokenization, including the following:
Tokenization is a sure fire way to protect your customers’ credit card information. This includes not only outside hackers, but also staff members who might be ethically challenged.
When your customers’ data is protected, your brand and, consequently your reputation, are protected. You can rest easy knowing you won’t have a security breach scandal on your hands anytime soon.
(Incidentally, if you don’t have tokenization capabilities, here’s what to do in the event your system is breached.)
Tokens cannot be monetized if they are exposed or stolen, so your restaurant can share tokens across multiple applications and even with external partners, franchisees, or service providers without fear of a security breach.
Our friends at Mercury® had this to say. We couldn’t have worded it any better ourselves:
Every merchant who accepts credit cards as a form of payment must adhere to the PCI-DSS (Payment Card Industry Data Security Standards) for the safe handling of payment card data…While there are compliance assistance solutions available on the market that help business owners meet their PCI-DSS requirements, using tokenization is one of the most effective ways to reduce the number of steps it takes to achieve compliance.
With tokenization, your POS system does not store actual card-specific payment data, enabling you to maintain PCI-DSS compliance much more easily.
Tokenization can be directly built into your integrated POS system (such as POSitouch) and tokens can be stored securely for future use.
Because tokens are stored securely in your POS system, you are able to use the data to build customer loyalty programs or create innovative marketing campaigns based upon the buying history of each customer, without the need for phone numbers or sign-ups.
Let’s face it: human beings will seize any opportunity to celebrate, especially when it involves food or drinks.
We live in a country (and day and age) characterized by stress. People are busier than ever; nearly everyone can relate to the pressure to do more and be more, keep up with the Joneses, etc. etc. The truth is, everyone needs an excuse now and then to slow down and enjoy life. Cinco de Mayo is a great day to do that – and your restaurant can help!
Commonly mistaken as the Mexican Independence Day (that’s September 16), Cinco de Mayo commemorates the day of the Mexican army’s unlikely victory over the much larger French army at the Battle of Puebla on May 5, 1862.
Is your restaurant prepared for a Cinco de Mayo celebration? If not, think about it. It’s a great day to improve employee morale, increase customer loyalty and bring in more revenue.
Not a Mexican restaurant? Who cares! Everyone is welcome to celebrate this festive holiday. No matter your culinary genre, you can join the festivities with a few easy changes:
Among other things, Mexico is famous for its beer. Add some Mexican beers to your bar for Cinco de Mayo, as well as some specialty margaritas (get creative!) and tequilas for drink specials.
Be sure to pair your drinks with some great Mexican appetizers to keep guests having fun longer.
2. Comida (Food)Add a couple of traditional Mexican appetizers and dishes to your menu for Cinco de Mayo. Chips and salsa, guacamole, and nachos make great appetizers.
Tacos and tortilla soup are super easy and can be customized to fit your restaurant’s unique flair.
Make it a party! Keep guests having a great time at your restaurant longer with live music. Have your servers wear something colorful, and add a few Mexican decorations to your restaurant to enhance the atmosphere.
Get creative – have a special drawing to win prizes, do some giveaways, have games – whatever would add to the fun of the night!
Rather than just the 5th of May, why not make it the “Week of May”! If not the whole week, how about extending it to the weekend, or at least on Cinco de Mayo Eve. That will provide more opportunities for people to celebrate according to their schedules. And if they don’t feel like battling the crowds all over town, or celebrate on a weeknight, they can celebrate on an “off-night”.
Make sure you provide ample notice to your customer base for the upcoming Cinco de Mayo celebrations so they can make plans to be there. Promote your festivities on all your social media outlets and be sure to encourage people to invite their friends and family!
Don’t miss out on your chance to create a fun, happy environment for your guests AND bring in more revenue. So don’t go loco on Cinco de Mayo – celebrate!
If you’ve ever dined at a restaurant, chances are you’ve experienced sub-par service at least once. That may have been the result of a poorly trained or apathetic server, or it may have been due to the inefficiencies of the “old way” of doing things (i.e., absent modern technology).
If you don’t have a mobile point of sale (POS) system in your restaurant, you are truly missing out on a much more efficient, streamlined process for seating, ordering, managing inventory and other back office tasks, customer satisfaction, and customer loyalty programs. With the recent advances in technology and security, this investment ought to be a no-brainer.
With a mobile POS system, you will be able to:
In the market for a mobile POS system? Check out the many features of POSitouch!
More specifically, read below to learn about some of the benefits you can expect from a mobile POS system.
Nobody wants to eat at a restaurant and not be able to locate their server to place more orders, make changes to their order, switch tables, or get their check. As a restaurateur, you know how busy your hosts, servers, bartenders, and kitchen staff can get. Why not make their jobs easier – and the customers happier – by minimizing extra work?
Servers take orders, then drop them off at the kitchen, right? Well, not so fast. On a busy night, a server may be interrupted several times on his or her way to the kitchen to place an order, setting back the ordering process by several minutes. A mobile POS system will allow the server (or customer, in the case of tabletop POS systems) to place the order and send it immediately to the bar or kitchen. That way servers can be available to the customers, creating a more pleasant experience for them.
Guests can also place additional orders and pay their bills without having to flag down a server.
Need to make changes to an order? No problem. With servers being more available to customers on the floor, changes can easily be made on the mobile POS system and immediately sent to the kitchen.
If a guest wishes to switch tables, the server can re-seat the guest and alert the host/hostess station with the touch of a button, ensuring the seating chart is up to date and avoiding any confusion with seating.
And of course, menus are easily updated for seasonal changes or specials – across one or multiple locations, you choose.
Ever see a crowd of servers hanging around the register on a busy night, waiting for their turn? There won’t be any need for that – with your POS, guests can view their checks and pay whenever they are ready, right there from the convenience of their table, no server intervention required.
A mobile POS will also allow management to access real-time data like the seating chart and inventory.
Finally, a mobile POS system makes upselling easier. Your servers will have all the daily drink and meal specials directly in front of them, so if they don’t have the list memorized, it will be readily accessible, making them (and you) look good. And if you have a tableside POS, guests can view the specials themselves, increasing the irresistibility of those delectable delights.
With a mobile POS system, guests can place additional orders at the touch of a button, without having to flag down a server. Want dessert? Another cocktail? How about a mid-dinner appetizer? There’s no etiquette here – customers can order what they want, when they want.
And having information in a database on your mobile POS system makes integrating customer loyalty programs a snap. You now have access to customers for coupons, special deals and discounts, and more – with the goal to increase customer satisfaction, retention, and recommendations.
