Success in the restaurant industry is built on the back of great teams. To build a great team you need dedicated, enthusiastic and reliable employees. Easier said than done in an industry notorious for its high turnover of staff. Evidence suggests that to build a great team you need to motivate. One way to do this is through an incentive scheme for staff. For other ideas check out our blog: 10 ways to motivate employees in hospitality.

Many restaurant owners are big believers in incentive schemes with evidence suggesting their benefits far outweigh costs. Restaurant and Catering Magazine cites a source the claims incentive schemes can boost the quality and quantity of restaurant staff performance by up to 40%. Here's how your restaurant can get on board.

Achievable

A restaurant incentive scheme must be achievable. While at first glance this may be obvious, there are still plenty examples of well-managed restaurant incentive schemes that fail because they are perceived to be unattainable. Staff don't buy into the scheme from the start and the scheme may actually cause staff to become demotivated as it shows a disconnect between staff and management. 

Equitable

A restaurant incentive scheme should be equitable with commensurate reward for effort. This means that the bigger the achievement, timeframe or required effort, then the larger the possible reward. This rule should apply equally across all staff members regardless of seniority.

Clarity

Staff should easily be able to identify what they need to do to qualify for a reward. The incentive scheme should clearly specify those factors with are objective and those open for appraisal and how they will be measured. There then needs to be a balance between these two variables. 

Eligibility

What do staff need to do to qualify for reward under any restaurant incentive that you run? Key things to consider are:

• How long an employee needs to be with the restaurant to be eligible?
  
• What happens when an employee changes roles?
  
• What staff members will be eligible for which incentives?
  

Simple Sales Incentive

Under this restaurant incentive scheme an employee will earn a specific amount for each unit or dollar amount sold. For example $1 for every bottle of wine ordered or $10c for every $1 spent on desserts.

Target Incentive

Staff must reach a certain target to be rewarded under this scheme. This could be in terms of the number or value of items sold. It could also be a percentage increase on items sold versus a base line figure. So for example a $5 bonus when a guest spends over $50 or a $100 bonus if sales for an individual staff member are over $2,000 or 10% more than last month.

Group Incentive

A group incentive is for all staff members and is a great way to encourage team camaraderie. Examples of this incentive could include movie tickets if the kitchen staff meet food cost targets.

Limited Time Incentives

This type of restaurant incentive is a one-off and only lasts a shift, day or week and isn't a regular occurence. For example you might need to sell some cases of slow-moving wine. You could offer a $100 incentive for the staff member who sells the most of the left over stock.

Management Incentives
 
Usually reserved for full-time staff in positions of seniority who have been with the restaurant longer and are likely to stick around. Management incentives are usually based on improving previous performance. For example a manager may earn a bonus if wages are kept below a certain level or sales are a percentage increase on the previous quarter, half or full year results.

In this post we take a look at five key areas of a restaurant business and give you tips on how to increase revenue and cut costs to boost your restaurants profitability.

To boost your restaurants profitability you need to work closely with staff. The first thing you should do is define your role as owner. What will your day-to-day responsibilities be? By having a clearly defined role then your are in a position to empower staff with the tasks that you won't take on. Empowered staff will be more motivated and loyal. 

Another way you can motivate and maintain loyal staff is through training. A lot of hospitality owners baulk at the cost of developing their staff only to see them leave. What happens though if you train staff and they stay?

These two tips can save a restaurant thousands of dollars a year by reducing staff turnover. The time and money you save hiring new staff can boost your bottom line.

Another way to reduce staff turnover is to hire staff based on their attitude and motivation to do the job. This should be a key selection criteria. Potential employees who have the right attitude: a customer focus, adaptable and loyal are more likely to stick around.

One thing your business could consider doing to  increase revenue and cut costs is to implement a monthly meeting of staff to discuss business improvement ideas. For example "What initiatives can we implement to boost the number of guests over the long weekend?" You will find that staff have some great ideas that you can implement. 

When it comes to food you should spend your money wisely. One way to lower your food costs is to only use fruits and vegetables that are in season. Not only are you buying fruits that costs less but it can also be used as a selling point to market your business.

Food wastage is a big challenge for restaurants. By regularly tracking sales of your menu items you can trim that aren't selling well and cut down on food spoilage. A hospitality POS system will help you gather that data.

Another tip is to consider group buying. While you may only save 2-3% on some items, the savings can add up. Especially in an industry with low margins. A word of caution though, chefs can feel compromised if they are forced to buy certain ingredients. A voluntary system can work well. 

Investing in assets that are user friendly, efficient and well maintained can save your business money. Equipment should be safe to use and fully operational. When things like fridges have cracked seals or a mixing appliance is missing a part then they cost more to run and you lower productivity. Now might be the right time to think of investing in assets for your business given the small business tax incentives announced in the 2015 budget. 

In our last post we outlined what the 2015 budget meant for small business owners of cafes and restaurants. We specifically took a look at the instant asset write off and why it could be time to invest in a new POS. Today we take a further look at the range of other small business incentives announced in the 2015 budget and how your hospitality business can benefit.

The instant asset write off wasn't the only tax concession announced in the 2015 budget. If you are restaurant and cafe owner and your business has an annual turnover of less than $2 million then you will receive a tax cut from next financial year.

If your restaurant or cafe is registered in a company structure then from July 1, 2015 your tax rate will reduce from 30% to 28.5%. 

If you're an unincorporated business then you will receive a 5% tax discount from July 1, 2015. This means that any income you earn from your cafe or restaurant is eligible for a 5% discount on your tax bill. This concession is capped at $1,000. 

The government also announced a range of measure in the 2015 budget aimed at reducing red tape for small business.

One of these was a change to the Fringe Benefits Tax (FBT). For businesses whose annual turnover is less than $2 million then any portable electronic device you provide to employees from July 1, 2016 will no longer attract FBT. A portable electronic device covers things such as mobile phones, laptops and tablets.

Another measure announced in the budget was Capital Gains Tax (CGT) relief for small businesses who decide to change legal structure and incorporate their business. 

Currently CGT relief is only available for individuals who decide to incorporate, its is not available to businesses in any other structure, for example a partnership or trust. The new rules apply from July 1, 2016 and are aimed at small business who decide that their initial business structure may no longer be appropriate once they have begun operating and are more established.

The third aspect of the governments small business package that is set to benefit the hospitality industry in particular is assistance when hiring employees. There are three ways operators of cafes and restaurants could benefit:

1. Under a new National Work Experience Programme, the government will provide opportunities for employers to offer work experience for unemployed job seekers. This will come into effect from January 2016
2. Flexible wage subsidies will be available to employers under the Restart, Youth and Long Term Unemployed wage subsidies program.
3. Changes to the Restart Programme from January 2016 will make it easier to get government support when small business hire older workers.

Small business were a big focus of the 2015 budget and we have outlined three areas where owners of cafes and restaurants can benefit. The tax cuts, in combination with the instant asset write off, cuts to red tape and employer incentives gives the hospitality industry an incentive to invest in productive assets for their business and look to hire new workers.

One of the big announcements from last week's budget was the range of incentives for small business to go out and invest. The one incentive that attracted the most headlines was the $20,000 instant asset write off. So what does it mean for us in the hospitality industry? How does this incentive work and is now the time to look at purchasing new assets like a POS system?

While the instant asset write off covers most asset purchases there are restrictions:

1. Horticultural plants and software developed in-house cannot be claimed (software purchased for the business like the ViViMobile App can be claimed though)
2. Assets must be physical items
3. To claim the deduction the asset must be purchased outright. Any assets acquired through hire-purchase or leasing are not deductible.
4. If you purchase an asset that is worth more than $20,000 then it is not eligible for the tax deduction straight away. Instead it will be depreciated over a number of years, 15% in the first year and 30% for every year thereafter.

For small business that are already operating or those that are thinking about starting, there hasn't been a better time to purchase a new asset like a POS System.

The ViViPOS system is designed especially for those small business running a cafe, restaurant or retail outlet. It has a range of customisable features, over 20 different kind of reports to ensure your business is tracking how you want it to be as well as an intuitive interface and systems that will make you a more efficient business operator.

We are happy to provide an onsite visit to assess your needs or you can get in contact via our website and we will be in touch.

There has been plenty of talk recently around whether restaurants offering BYO is a thing of the past. In this post we look at the history of BYO in Australia as well as the arguments for and against offering it in your restaurant.

Their appears to be a numbers of factors that contributed to the development of the BYO culture in Australian restaurants. In the past liquor licences have been more expensive and difficult to obtain, making BYO the default position for many restaurant. Going out for a meal on a regular basis was never as common as it is today. In the past eating out was seen as an expensive indulgence. Today some people decide never to cook at home. Wine matching is also a relatively new phenomenon. Not as much thought was given to matching wine with menu items. If wine was available it was usually a choice between red and white wine usually from a cask. In this environment it is easy to see how bringing your own wine became quite widespread. Given the changing times is it still something that should be offered today?

Is BYO dead? That's the question people have been asking of late. Let's look at the reasons against offering BYO in your restaurant:

• The industry's slim margins in Australia with high labour costs makes BYO unviable. Even charging corkage means your more reliant on food to make money.
• Diners miss out on the full experience of dining at your restaurant if they bring their own bottle of wine. Much thought is given to matching wines with menu items by restaurants. BYO doesn't allow for this.
• It has become quicker, easier and more affordable to apply for and obtain a liquor licence. In Victoria for example it costs $429.50 to apply for a full licence In NSW the cost is $700.

Does the choice have to be between offering BYO or forgoing it all together? Some restaurants are having a bet each way and offering BYO on some nights of the week. For example you might wish to offer BYO from Sunday through to Thursday when there are fewer customers. On the weekend you offer a licensed only service. Hospitality Magazine provides the example of Barrel Bar and Dining in Sydney's suburb of Cremorne as an example of a restaurant who has done just that. During the week when the restaurant offers BYO, diners are encouraged to bring along their own wine with the food then matched accordingly at the suggestion of staff.

The decision about whether to offer BYO at your establishment depends on what type of restaurant you want to be. BYO is more common in smaller eateries, offering an affordable meal out that want to attract a regular customer base. Those not offering BYO are usually larger, full service restaurants that diners would eat at less often. Think about your restaurants offering before deciding what the best option is for your business.

To build customer loyalty for your restaurant, diners want to feel that you care about them. One strategy to do this is to put in place a system to ensure new dinners feel welcome and returning guests are recognised. This kind of attention makes diners feel special and increases the likelihood that they will return.

One tip when greeting new patrons is to share your name with them straight away. Ensure all your staff are trained to do the same. People feel a greater sense of connection when they know each others name. It also shows diners that you're prepared to be accountable. This small step can be the first step in building a loyal customer for your restaurant.

For returning customers it is important you and your staff remember names. If you have a system in place to remember when and what they last ate at your restaurant you are able to offer a more personalised service which they will appreciate. For example "Welcome back Jane and Jim, I remember last month when you ate with us you particularly enjoyed our seafood dish, well we've since updated our menu and I'm really keen for you to try out our new seafood pasta!"

You can build customer loyalty for your restaurant by paying attention to customer feedback.  Consider these tips to ensure your getting the feedback you need to consistently improve your business.

• Ask new customers why they have chosen you
• Ask existing customer what you do well and what can be improved.
• Review and respond to reviews left by diners online
• Encourage and make it easy for diners to provide feedback

By paying attention to customer feedback you have an opportunity to resolve any issues and improve your customer service. Customers both new and returning will see (with the help of some self-promotion) that you have listened and have improved. This will set you up to build long term customer loyalty.

It is important to remain in contact with customers to promote the fact that you care about their patronage. You could choose a number of methods by which to do this:

• Phone
  
• Email newsletter
  
• Social media

Whatever tool you use to reach your customers you should make sure they are aware of how your helping them through better customer service. If you fail to promote the fact that you have taken their feedback on board and have acted, then they may not notice. You could promote the fact that your now accepting online reservations or that you have introduced a special set menu following customer feedback.

Set up the mechanisms to reach out to existing diners and dedicate the time to maintain a database with which to contact them. This is especially the case on social media. If you're going to have a presence on social media platforms, ensure that when people visit they are greeted with up to date information.

What should be clear from these tips is that technology should play a central component in building customer loyalty. Technology can help make your processes more efficient. 

A POS system like ViViPOS can help maintain a customer loyalty program. This will help you record, organise and plan your contact with existing customers.

Sources: Inc.; Marketing Donut; Entrepreneur; All Business.

Restaurant no shows have reached 4% in Australia according to a recent article that appeared in Hospitality Magazine. With restaurant profit margins sitting at between 3-5% it pays to have a plan in place to reduce this figure.

Here are some way your restaurant can reduce the amount no shows.

Clearly the best way to avoid restaurant no shows is to do away with reservations all together. Generally it is more popular restaurants with a number of sittings per evening that can do away reservations all together, it doesn't work for all restaurants. If your establishment doesn't have a high table turnover then you could consider a partial reservation system whereby you allow bookings at certain times of the day.

Offering tickets to a restaurant is one method that almost entirely eliminates restaurant no shows. Even if a party fails to show up, the restaurant has their money in advance. 

When Dimmi spoke to Hospitality Magazine they pointed out that in most other service industries payment is required in advance. Why shouldn't restaurants be the same? 

The system works similar to a cinema. You pay upfront for a set menu and then drinks are paid for on the night. 

Some restaurants have even began to experiment with time-of-day pricing. Customers willing to eat earlier or later in the evening pay less than those wanting a table during the restaurants busy period. The advantage of this is that you even out demand across the day and during the week. You also know ahead of time how many diners you are expecting and can organise staffing arrangements accordingly. 

The disadvantage though is that very few restaurants currently use this system and diners could baulk at having to pay for their meal upfront and decide on a competitor who doesn't require this.

Confirming bookings is a proven method to reduce restaurant no shows. Restaurant & Catering Magazine cites the example of the Heritage in Perth that was able to reduce its no shows by 80% by using technology to confirm bookings with diners. The establishment used SMS technology linked to their POS system to prompt diners to reconfirm their booking.

SMS technology linked to a POS system is not the only option. Using email and the phone can be just as effective.


One of the keys is to make it easy for diners to cancel their booking. If you implement a technology friendly solution then reservations can be cancelled when it's most convenient for the diner. It makes it easier for diners to do the right thing and can give you the chance to replace the booking. 

The National Restaurant Association recommends having a policy in place in the instant of a no show. 

For example what is your reservation policy, do you charge a no show fee? What criteria must be met for this fee to be charged?

How long will you hold a table before it's given away? Most restaurants will hold a table for 15 minutes before seating another diner. If the guests calls to notify they will be late then some restaurants will hold the table longer.

How will you keep tack of diners that are no-shows? Often your online dining application or POS system will be able to record this data. Will you decide to ban diners who are consistent no-shows?

If you're going to have a no show policy then be sure to fulfil your end of the bargain. Most guests do turn up and they expect to be seated promptly. 

There are a range of different insurance options that particularly apply to hospitality businesses. This post will give you a run down of the different types available and what they cover.

Firstly though, you might be wondering why take out insurance for your hospitality business? Here are 5 good reasons why:

• Increase credibility with customers
• Protect your clients
• Protect your employees
• Protect against the unknown
• Avoid financial ruin

The bottom line is that hospitality businesses can't take the risk of forgoing insurance. Let's explore the insurance options that could be applicable to your cafe or restaurant.

Public liability insurance covers you when a customer or member of the public suffers a loss or injury because of your business operation. For example someone slips on your floor.

Product liability insurance covers your business when customers are affected by one of your products. In the case of a hospitality business this is most likely to occur when a customer gets ill because of something they ate or drunk on your premises. 

Workers compensation covers the cost of benefits paid to an employee if they suffer an injury at work. Workers compensation is compulsory in Australia if you employ staff and pay wages (over $7,5000 in the case of NSW & VIC). It is levied by individual state governments so different rules, regulations and costs apply according to the location of your hospitality venue.

Money insurance covers your hospitality business for the loss of money, cheques, credit cards, vouchers and cab charges that are held on your premises or while they are in transit. This type of insurance is a good option if your regularly carry money to the bank.

You've protect the freezer with your equipment insurance but what about the stock in it? Deterioration of stock works side-by-side with equipment insurance. It will cover you against food spoilage when equipment fails.

Additional Sources: AAMI, Alianz, GIO, Connect Insurance.

Here are the tangible benefits to hospitality businesses offering free WiFi:

Attract new customers

Offering free WiFi can attract solo dinners by removing the discomfort some people feel when they eat alone. myplaceconnect.com reports on a survey that found 53% of customers would be happy to sit by themselves in a restaurant or cafe if there was free WiFi. The survey also highlighted that tourists were another customer segment attracted to a hospitality venue offering free WiFi.

Attract more customers 

cio.com reports on a study that found offering free WiFi would attract more customers at times when hospitality business have fewer customers. Busting the myth that offering free WiFi would lead to customers hogging tables during busy breakfast or lunch periods, the study found that hospitality venues experienced a spike in free internet usage during the afternoon when they were least busy.

Increase average customer spend

smallbiztrends.com reports that over half of those hospitality businesses that installed free WiFi experience an increase in the average amount spent per patron, only a very small amount said customers spent less.


Helps differentiate your business

Offering free WiFi can be a point of difference if your competitors aren't offering the same service.

Meet customers expectations

With the availability of free WiFi rapidly increasing, customers are starting to expect it as the norm. myplaceconnect.com reports that one in every ten patrons left a venue because it didn't offer free WiFi. 

Offering free WiFi to customers doesn't have to be a cost to your business. Here are a number of ideas that will mean offering free WiFi can pay for itself:

Offer a free service and a premium service

You could offer customers a free service that is capped at a certain length of time and speed and then offer a premium service for those willing to pay for faster speeds and bigger downloads.

Tie WiFi access to purchases

The system could work along these lines: offer free WiFi capped at fifteen minutes. You could then offer thirty minutes for those who bought a coffee and an hour for those who bought a meal.

Use free WiFi as a marketing tool

We came across an example of a dutch cafe that offered free WiFi but regularly changed their network password to things like:

BuyALargeCoffeeGetAFreeBrownie

Another option is to ties access to your WiFi to social media. Make a "like," "share," or "follow" a condition of accessing your network. This ensures you can remain connected to the customer after they have left and encourage them to return through your social media profiles.

One of the best ways to get value out of offering free WiFi is to collect customer demographic data when they access your network and then use this to send targeted marketing communication messages via email.

We'd love to hear your thoughts on offering free WiFi. Do you offer it? Would you consider it? What's been your experience with free WiFi in hospitality venues?

Via: cafeculture.com; myplaceconnect.com; smallbiztrends.com; wireless-social.com; freakonomics.com; cio.com.

Providing feedback is a great way to motivate employees and serves to strengthen relationships. Feedback should be given as often as possible. Rather than waiting for formal reviews give feedback straight away. This goes for either positive or negative feedback. Providing feedback right away encourages repeat performance in the case of positive feedback or corrective action in the case of negative feedback. 

Via: AboutMoney.com; Academia.edu; eskill; Hospitality Guild; Restaurant & Catering Magazine.Incentives for Rewarding Good Performance: Employees’Perception in Luxury Hotel Industry