Your management is the core of your business. If your core is NOT capable, then your restaurant business is at jeopardy.
But how do you know they are not capable?
Well I’m going to go over 3 big red flags that tell you it’s time to fire your restaurant management and staff. And if you spot them…it means your restaurant management or staff are hurting your business than helping it.
And once you pinpoint the problem person, how do you actually fire them? Kicking someone off your team is never an enjoyable experience, but I’ve put together some tips to make sure it goes as smoothly as possible.
Let’s dive right in.
1: Increased Food Costs
Let’s say you’re restaurant has been up and running for a couple years, with a 20% cost of goods sold (COGS). A couple weeks ago you hire a new cook and notice that your COGS has skyrocketed to 40%!
This is a definite red flag.
Most likely the cook is not handling your ingredients properly, wasting a lot of food, and messing up the inventory. If you don’t document your processes in detail there’s no consistency, leading to these kinds of discrepancies. Usually this issue can be fixed with better training.
Free Food Isn’t Free For Your Business
Another possibility is that a staff member keeps giving out free food.
They could be eating this food themselves, giving it to other staff members, or even to your customers.
This is why it’s super important for you to know AND understand your numbers. When you’re actually tracking your numbers, you will immediately notice these spikes.
Let’s say you hired a new manager instead of a chef and notice that your COGS is suddenly really high. It’s likely that the manager is giving away lots of food to customers. Even if their intentions are good and they’re trying to keep customers happy, you’re still loosing money.
For every meal that you serve, your revenue should go up proportionally.
Worst case scenario, your staff is actually stealing money from you. The only way to know is by tracking your numbers so you can catch it early.
Another number you need to know is your labor costs.
Say you hire a manager to handle the scheduling for you and your labor cost suddenly goes up from 20% to 25%, then to 30% – this means they’re not utilizing your staff properly.
Usually, your staff has too much idle time, or there’s too many employees in your restaurant all at once!
In this case, it’s your manager’s job and duty to maintain a certain level of labor costs. This could either be a teaching moment or a disciplinary one depending on the circumstances.
Regardless, these are all red flags. Knowing your numbers is something that you absolutely must do when running a business.
2: Increase Of Bad Reviews
The second red flag indicating that you may need to fire a staff member is an increase in negative reviews.
We’re talking about in-person AND online reviews on sites like Google, Yelp, and Facebook. It’s very important to monitor and maintain your business’ positive public image.
Stay in the Loop
Because I’m not always at my restaurant, I keep a very close eye on all the reviews that we receive.
I need to verify that my staff is managing the shop properly, and if I see a lot of negative reviews about the service being provided, it’s time to intervene.
You can’t fix a problem you don’t know about.
Even beyond solving staffing issues, your online reviews are very important to your businesses success as 80% of people check them before deciding where to dine at.
Communication Is Key
So often as restaurant owners we fail to talk to our customers, because we think we don’t want (or need) the outside opinions, or are even afraid of what they may say.
Regardless, their insight is the only one that truly matters.
At the end of the day, it’s not about what product or service you think you’re providing, it’s about what product they receive and how they feel they’re being served.
If more than one customer has singled out a staff member for having a bad attitude or providing poor service you know that this is someone that you should A) consider firing, B) give proper training, or C) sit down with to make your values and expectations clear.
3: Increased Turnover Rate
The third red flag to look out for is a sudden change or increase in staff turnover rate.
If a lot of staff are quitting all of a sudden for no apparent reason, you know they’re not happy and that something is wrong.
In most cases, people will STAY longer at an working environment because they enjoy the people they work with. If the people they are surrounded with isn’t a reason they stick around…you know things are bad.
Who’s The Bad Apple?
Often, it’s just one bad apple who’s poisoning the rest. It’s up to you to investigate and not just take resignation letters as is.
Never accept that it’s just a symptom of the industry, because if everything was going perfectly, you would have a low turnover rate and committed team.
Have an exit interview with every single staff member that quits. Try and truly understand why they’re quitting.
When someone is quitting, they’re going to give it to you straight. They have nothing to lose so they’re going to tell you if something is going on.
It could be that another staff member is making a scene, causing conflict, or even harassing others. Or it could be that your manager is not treating them unfairly, not giving enough shifts or being rude.
Any of these could be reasons why they don’t feel safe and don’t want to work there anymore.
You’re the Detective
At the end of the day it’s up to you to investigate what is truly going on.
Don’t overlook the possibility that YOU could be the problem. This is just another reason to conduct exit interviews, to receive perspective and the honest truth.
There you have the 3 Red Flags: Increased COGS, Bad Reviews, and Increased Turnover Rate. Now that you know what to look out for and how to find the problem person, it’s time to have those tough conversations.
I’ve Found The Person: Now What?
You’ve learned that the your manager of five years hasn’t been treating your staff fairly. You’ve talked with them, but the situation doesn’t seem to be improving.
How do you fire them?
It’s human nature to avoid conflict. We don’t like having these difficult conversations which is why so many people struggle to fire people.
However, if you laid out your expectations properly in the beginning, firing someone becomes surprisingly easy.
Realign Your Values
When you first onboard a new staff member, clearly lay out your expectations.
Determine and communicate your values as explicitly as possible. How do you want to manage your staff? How is it that you want to run your business?
Make sure both of your values are aligned. This way you know that whoever you’re bringing on board either desires to do things the same way, or understands how you expect things to be done.
This eliminates the potential for conflict in advance.
Unfortunately, sometimes the situation is outside of your control. If and when things don’t align, you know for sure that they’re not a right fit for your organization because you made your expectations clear from the start.
Hopefully, they will understand this as well, making the decision much easier.
It’s A Conversation
Remember that it’s just a conversation.
You can say: “Hey, you know what? I was pretty clear when I brought you on as a manager that my expectations were for you to treat staff fairly with respect, and give 200% in customer service. Unfortunately, I’ve heard from multiple team members and customers that your behavior doesn’t reflect those values, so I’ve decided it’s best at this time to part ways”
It becomes a simple conversation, because the expectations were set right from the beginning.
BUT this can go both ways.
If you tell your staff that you’re going to pay them above minimum wage and a week of holiday time, but don’t provide that, they have the right to quit on you because you didn’t live up to your end of the bargain.
Expectations weren’t honestly set, so your values are misaligned.
You’re The Boss
But at the end of the day, you’re the boss.
Know these three red flags and take action quickly, because if you don’t, you’re the one who loses.
If you’re in the beginning stages of starting your dream restaurant, cafe or food business and want to do your best to avoid costly mistakes or waste a ton of money…my free masterclass will give you an in-depth look at my ACE formula – the same formula that I used to build my 7 store ice cream chain and how my students were able to get more clarity in their food business. Sign up for the masterclass here.