Handling the finances, maintaining supplier relationships, ensuring product quality, keeping an eye on inventory and the kitchen, guiding the team, delivering a great customer experience.
Restaurant management involves all of that and then some. And with so much to handle, it's common to make mistakes that can hurt the business. In this piece, we've gathered the main ones and brought along some tips to avoid them. Check it out!
Also check out: 6 restaurant spreadsheet templates to download for free
9 common restaurant management mistakes and how to avoid them
Running a restaurant is a big challenge and mistakes of all kinds happen. To keep the business from failing, it's crucial to stay up to date and keep improving. See below how to avoid the most common ones.
Lack of working capital, lack of financing and lack of money are among the main reasons companies close. In other words: without good financial management, no business survives.
1. Mixing personal finances with business finances
On that note, a very common mistake in restaurant management is mixing personal finances with the company's. Paying your household bills with the restaurant's revenue? Don't even think about it!
If you're doing this, it's time to rethink the practice. The right approach is to subtract expenses, taxes and your own salary from revenue. Whatever is left, invest in growing the company.
To really turn a profit, a restaurant manager has to be an expert at Pricing products. And that's not as simple as it may seem at first. A classic mistake is to consider only the cost of the ingredients.
Learn more: Accounting for restaurants: understand how it works
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2. Calculating prices considering only the cost of ingredients
So let's get to it! To get this calculation right, also include:
- Ingredient cost, taking into account the recipe card for the product
- Custos fixos such as rent, salaries, electricity and water bills, marketing, software and so on.
- Custos variáveis such as packaging, commissions, credit card fees and so on.
- Profit margin you want
Add all that up and you'll have the selling price. Then use the markup calculation to price your products.
3. Losing control of your inventory
Although it's essential, inventory control is one of the most complex processes in restaurant management. That's because supplies have to be monitored constantly, taking into account both expiration dates and sales.
Lack of inventory control creates several problems, including:
- Bad customer experience: a customer may place an order that can't be filled because supplies ran out. That creates frustration and damages the company's image.
- Waste: supplies go unused and spoil — in other words: the restaurant throws food and money in the trash.
- High cost: without proper tracking, restocking orders get placed only when you're already out or in a rush. That makes it hard to negotiate and get better prices from suppliers.
For efficient inventory control, the best option is to automate this process using a restaurant system.
In it, you register your supplies and product recipe cards and the control is automatic. So whenever an order goes out, the inventory is deducted right away.
The manager can follow everything easily and even run analyses to map out improvement strategies — identifying, for example, the best- and worst-selling products.
4. Forgetting about quality standards
Quality standards are what build your restaurant's name, but managers often forget that. Defining and maintaining quality processes can be laborious, but it's essential to build a good reputation and keep customers coming back.
The biggest challenge is ensuring quality in every sense: ingredient selection, dish preparation, presentation, service and so on.
That's why, in restaurant management, you need to set a high quality standard, create Standard Operating Procedures (SOPs) for your processes, follow an inspection routine and train your staff.
The manager should also encourage the team to take ownership, making everyone feel responsible. Building a culture of quality is the path to guaranteeing a high standard.
5. Not knowing your supplier
And since we're talking about quality… As a restaurant manager, you probably already know that having good suppliers is crucial. But have you ever gone to visit one of them? Do you know what their production looks like? Have you run a vendor approval process?
A supplier selection is often done without the proper care — and that can hurt your business!
Don't make decisions based on ease, convenience or friendship. Be rational and think like a manager: choose what's best for your restaurant. Look into your suppliers, know where the products come from, build relationships based on trust.
That will make all the difference not only in quality, but also in your finances.
6. Investing too little in marketing
There's no point in having your operation running perfectly and everything ready to welcome customers if you just stand at the door waiting for them to show up, right?
A manager who doesn't invest in restaurant marketing is making a serious mistake.
That's because, even if business is good and customers are happy, coming back and recommending your place to other people, not investing in marketing means missing chances to increase sales and grow your business.
Here are a few examples:
- Running campaigns for holidays and special dates is a way to drive spending.
- Promoting deals can help keep sales up even during a slow season.
- Having custom packaging for delivery helps build brand recognition.
- Setting up your Google Business Profile helps customers find your business and learn more about it.
- Keeping social media active generates engagement and strengthens your relationship with customers.
So don't forget about marketing! Set aside a budget and plan campaigns to be even more successful.
7. Not keeping up with the market
You don't want to fall behind, right? Not keeping up with the market is a failure in restaurant management. After all, in the rush of the day-to-day, this task ends up forgotten.
It's really important to understand the market you're operating in and to act according to its changes, always staying up to date. To do that, you need to keep an eye on at least three things:
- Customer preferences and consumption habits: by analyzing inventory movements, for example, you get a good idea of what's most popular with your customers.
- Best practices from the competition: list your competitors and understand what sets them apart and what prices they charge.
- Industry trends: follow market news, get closer to industry associations, join social media groups and always stay in the loop.
8. Lack of innovation
In a competitive market that's constantly reinventing itself, you need to innovate to stand out. Managers who are afraid to implement changes put the business at risk. After all, those who don't innovate end up losing relevance.
Look for software that helps with restaurant management. Adopt technology trends that add to your customers' experience, such as totens de autoatendimento, QR Code menus e digital tabs.
And don't forget that innovation is much more than technology!
Adapt to your customers' new consumption demands. Think up new products and different ways to present your dishes, invest in distinctive decor, bet on special service.
9. Being a boss instead of a leader
A restaurant's team should always be motivated to deliver good service. Being that boss who only demands and pressures employees is one of the biggest mistakes in restaurant management.
A good manager exercises leadership by:
- training the team well;
- providing proper working conditions;
- acting with respect;
- encouraging collaboration;
- delegating responsibilities;
- recognizing a job well done;
- inspiring and leading by example.
By doing this, you create a more pleasant environment, avoid high employee turnover and ensure great service for your customers.
Learn more: How to deal with a lack of engagement among your staff?
Follow our tips to get restaurant management right
So, are you making any of the mistakes on this list? Don't worry! Now you know what to do to avoid them. And if you want to learn more, here on the EPOC blog you'll find plenty of other content to help you manage your restaurant.
Frequently Asked Questions
How does managing a restaurant work?
1. Operations (service, sales, production, delivery processes, etc.)
2. Team (hiring, training, motivation)
3. Administrative and financial (inventory control, purchasing and suppliers, sales control, finance and tax, marketing, etc.)
