Restaurant Alley

Top 5 Things to Consider Before Buying Your Next POS

I imagine that in the current economy restaurant owners aren't lined up with cash in hand waiting to spend money on a new POS system, but maybe you are opening a new store or your old system isn't quite giving you what you need. If this is you, then I encourage you to consider a few things while you're shopping around.

1) The Hardware Trap
If you're upgrading your existing POS system and your terminals are in decent shape, you should definitely try to find a POS system that will work on the hardware you already own. There are a few companies out there that force you to buy their hardware. Even if you're buying a brand new system, think carefully before using one of these companies, it's always best to give yourself options.

2) Closed Systems
I can speak as one of many businesses offering third party add-ons and back-office products for restaurants. We spend lots of development time integrating our software with our clients' POS systems. Many POS systems (especially the bigger ones) often make it difficult and expensive for you to use another company's solution with their system. They would rather have you buy their inventory system, scheduling program, or gift card solution and so they put up barriers to keep you from using other solutions. Again, don't limit your options, you never know what new shiny gizmo you'll want to incorporate down the road, wouldn't you rather be with a POS provider that is open to all those new ideas.

*** Free business advice for POS companies: First, if you're not on the web, get on the web. Second, if you're on the web, publish an API and build an app store like Apple has for the iPhone. This would be groundbreaking.

3) Recycle
Unfortunately, restaurants go out of business every day, so there are opportunities for you to pick up a barely used system for a great price. You still need to do your homework about the system so that you can avoid #2 above and also some POS companies require a license that is not transferable should you buy used equipment, so research this to make sure you can use the POS software after the purchase.

4) Help Me
The good news is you're great at operating a restaurant, the bad news is that you're not as skilled at operating a computer system. Well lucky for you, there are lots of companies out there that will help you find a great POS system, and companies to help you set it up and help you fix it when things go wrong. Ask for references and see how they've helped other customers at 3am on a Saturday night.

5) Upgrading
Software companies are always fixing bugs and adding new features so find out how often your prospective POS provider releases upgrades, how much the upgrades cost, and how easy or difficult the process is (i.e. can you do it yourself or do you need a consultant to help).

*** Web-based POS systems usually have a big advantage here, since updates are regular, often free, and can happen without you needing to lift a finger.

It's easy to be near-sighted, but make sure you think long-term before making your POS investment. The wrong choice will definitely haunt you and your staff for a long time.

WhenToManage in QSR Magazine Article

We were fortunate enough to be featured in an article about online scheduling in this month's QSR magazine. It's always fun to talk to someone about our products and our clients.

They even included a screenshot of our brand new scheduling interface.

NRA Show 2009 - Technology Update

This year's show was busier than I anticipated (thought the economy would take a bigger toll). It's pretty much a local show these days, but there were lots of people milling around and many of them spent time in the technology pavilion, though I did notice some tech companies exhibiting out amongst the non-tech companies. (Maybe they wanted to be next to the plentiful food tastings)

The technology companies exhibiting were most of the usual players. There were a few new folks showing off their online ordering software and some others with employee scheduling. (One company was named Monkey something, not sure what they do, but they were giving out bananas and all had monkey t-shirts on, I have to give them an 'A' for effort)

Lots of companies were showing off their new iPhone apps. Congratulations Steve Jobs, Apple has finally penetrated the restaurant business!

I have to say that I was pleasantly surprised with the technology discussions. The panelists were very forthcoming with their experiences and really had some great insights for their audience. It wasn't about shilling for a specific vendor, it was just about educating. If anyone is interested, I do believe that they sell recordings of the presentations and I highly recommend the marketing one to all the operators out there.

So that's a wrap. Nothing too exciting on the technology front, but it's always nice to say "hi" to old friends and hopefully make a few new ones.

Does "free" still work?

Seth Godin has an interesting post about the value of "free" over time.

I would break "free" into two groups:

Free Trial - this is a marketing strategy to get someone to try your product or service. People in general like to try new things, especially if they're free. There are two potential issues however. How much does it cost you to give it away? Are you giving it away to the right people? This has been very effective for us, but it doesn't really cost us anything to give away a month of our web app.

Free Bonus - this one is giving away something in addition to the purchased product or service. The first few times I get a "free" dessert with my meal I have a thrill that I'm getting something for nothing, but I  quickly get conditioned to expect it and the added benefit I previously perceived dissipates.

So what's the answer? Does "free" still work?

Yes, free trials usually work if you can afford them.

Free bonuses tend to lose their effectiveness and are probably best offered for a limited time. I imagine  there is a tendency to want to match a competitor's "free" offering, but this can be a losing battle that results in a reduced bottom line for everyone. Just make sure any free bonus strategy is exactly that... a strategy... not a response to the guy across the street or from what you "think" your guests expect.

How do you use "free"? Is it working?

3 Simple Ways to Hook Up Your Restaurant to the Web-Twitter-Blog-Facebook-Thingy

 Okay, okay, you've finally broken down and decided to get in on the social media train. I welcome you and you can relax because it's not too late, and it's not too hard. Each of these technologies are unique, but they all have the common goal of connecting people. In your case, it's connecting you and your restaurant to your guests. So let's get started...

#1 - Twitter

• Set up time - 15 minutes
• What is it? - Twitter is the newest kid on the block and the easiest to use. It's very simple, you enter messages of 140 characters or less and they appear on your page for the world to see. Other users can "follow" you to stay up-to-date on your updates or "tweets".
• What should I use it for? - This is the million dollar question and where your creativity comes into play. Businesses are using it for all kinds of things. From customer service to promotions, the choice is yours.
• How do I start? - https://twitter.com/signup

#2 - Facebook

• Set up time - 15 minutes
• What is it? - Almost everyone has at least heard of facebook by now. It's a "social networking" site that allows its users to connect and communicate with each other. They have a special feature that allows a business to create an account (or page).
  
• What should I use it for? - Once you set it up, let your guests know about it. You can then post pictures, share stories, and list upcoming events for all of your new "facebook friends"
  
• How do I start? - http://www.facebook.com/pages/create.php
  

#3 - Blog

• Set up time - 45 minutes
• What is it? - A web log or "blog" for short is a place for you to post your thoughts, stories, or ideas about your business or anything else you find relevant.
  
• What should I use it for? - While users can comment on your posts, blogs tend to be more of a one-way conversation. The nice thing about a blog is that you can customize the look and feel to match your brand and several companies use their blog as their official web site.
• How do I start? - http://en.wordpress.com/signup/ (there are others, I just happen to like this one)

Extra Credit - Google Search Alerts

• Set up time - 5 minutes
• What is it? - Google has a tool that allows you to enter a search term and then have any results that come up for that search sent to your email on a daily basis.
  
• What should I use it for? - This is a great way for you to see what others are saying about your business.
• How do I start? - http://www.google.com/alerts

With any of these things it's very easy to use them for a week or so and then let them die off from neglect. For any of these tools to work you need to commit about 60 minutes a week. An hour a week is not much time when you consider the potential benefit. I promise you, you have some guests out there that would love to hear what you have to say and will be all the more loyal if you will only reach out to them.

Global Warming or Global Marketing?

I saw this on NRN this morning.

The World Wildlife Fund is asking individuals, businesses, governments and organizations around the world to turn off all electric lights for “Earth Hour” from 8:30 p.m. to 9:30 p.m. local time on Saturday. The largely symbolic gesture is designed as a way to show support for efforts toward environmental sustainability and planetary good health.

So my first thought was... do restaurants really care about global warming or do restaurants care about their guests who care about global warming? The tough thing about the restaurant industry is that it's hyper-local. The people eating in your dining room are your neighbors in most cases. Large chains have a challenge to be both local and widespread in appealing to their guests, but at the end of the day it's all about attracting your neighbors.

What better way to attract your neighbor than clinging on to an issue that your neighbor cares about? But then you have to figure out a way to let your neighbor know you're supporting it.

It's easy for the big chains...

McDonald’s restaurants around the world, for example, are participating in various ways, such as turning off their road signs, roof beam lights and other non-essential lighting, both inside and outside units. The giant McDonald’s advertising sign in London’s Piccadilly Circus will be switched off for the hour, which will be preceded with a countdown timer to Earth Hour promoting the event.

But even the independents can get in on it...

The Pyramid Restaurant at The Fairmont Dallas, for example, is featuring a special four-course menu by candlelight for $45 including cane-sugar gravlax made with sustainable farm-raised Scottish salmon, grapefruit-lacquered quail, a wild boar chop with Texas Winery Cabernet Sauvignon veal glaze, and limoncello cheesecake.

Taking a public stance or featuring a promotion on any issue can be risky, it has to be sincere and can't be too gimmicky.

Guests can look at it two ways, they can be cynical and see the restaurant promotion as a typical marketing ploy, but I think most will appreciate the fact that their neighborhood restaurant is bringing attention to a cause they support. But the ultimate success of any campaign will be determined by how well a restaurant knows its neighbors.

Does your staff have ideas? Are you listening?

I was speaking to one of our clients a while back and we were talking about a contest he did. He asked employees for suggestions and would reward any ideas that were implemented with a cash prize. He  posted the details for the contest in all five of his restaurants and employees could email in their suggestions any time over the course of four weeks.

I believe he told me that he got about 5 suggestions (none of which were usable). With about 80 employees at each restaurant, he has approximately 400 employees, which means that only 1% of his staff participated in the contest. What happened? Did the staff not have any ideas? Did they not hear about the contest? Did they decide to keep their ideas to themselves? I am curious to find out, but I applaud the effort on the part of management.

An organization is wise to actively pursue ideas and suggestions from everyone in the company. This needs be done in some organized manner otherwise you may have chaos, but you might be surprised by the tremendous amount of collective wisdom available for you to tap into.

One of my first jobs in New York City many years ago was at a very large and popular cafe in midtown. I worked behind the counter making coffee and getting pastries for guests. It was extremely busy in the morning and at lunch. After my first few weeks on the job, I realized that the coffee station could be better arranged to allow for an improved traffic flow for workers. I approached the fairly new day manager after my shift and explained my idea. He thought it was terrific and told me that we could try it out next week. The next day I came in to work my shift and after I was done, I was called into the general manager's office. I was fired. I was told that the company didn't need any ideas and that things work much better when people just do what they're told. He said he could give me a good recommendation, but that I just wasn't a good fit for his place.

To this day it still baffles me that a general manager would be so afraid of even discussing change, that his first instinct is to get rid of the person suggesting it. Regardless, they still ended up using my idea and I am happy to report that my ideas and suggestions have taken me quite far ever since.

So the moral of the story is listen to your employees. Create a culture that respects and encourages everyone's thoughts and suggestions.

Listening to your employees leads to a few things:

• Better general attitudes - everyone likes to feel heard
• Increased feeling of ownership among staff - results in better job performance
• New ideas for saving money and making money - your staff touches your food and your guests more than you do and can always provide new insights

"I remind myself every morning: Nothing I say this day will teach me anything. So if I'm going to learn, I must do it by listening."

— Larry King

If anyone has any stories (successful or not) about listening to employee suggestions, I would love to hear them.

Can your restaurant benefit from "Business Intelligence (BI)"?

What is business intelligence anyway? According to wikipedia:

Business intelligence (BI) refers to skills, technologies, applications and practices used to help a business acquire a better understanding of its commercial context. Business intelligence may also refer to the collected information itself.

BI applications provide historical, current, and predictive views of business operations. Common functions of business intelligence applications are reporting, OLAP, analytics, data mining, business performance management, benchmarks, and predictive analysis.

Business intelligence often aims to support better business decision-making. Thus a BI system can be called a decision support system (DSS).

You may have read about BI tools and are maybe even using some. Typically, business intelligence software has been looked at as something for a large enterprise. Big company = lots of stores = lots of data, and so they invest lots of money in a software system to crunch all of their data to tell them things like their burgers can be priced higher or that they are wasting labor dollars due to inefficient scheduling or where in the country to open the next 10 stores.

I am here to tell you that things have changed.

1. It's Easier - with the growth of the Internet, it's much easier to move your POS data from each store to a centralized place for processing.
   
   
2. It's Cheaper - the Internet has also allowed web-based companies to build less expensive infrastructures and methods for collecting and processing the data. They require no large up front investment and you just pay as you go.
   
   
3. Size Doesn't Matter - now that business intelligence tools are easier and cheaper, there's a high return on investment for independent restaurant owners to load up their sales data and finally get some assistance with business decisions.

As an example, the company I'm affiliated with offers a product that fetches your POS data and gives you multiple reporting tools for analysis of your data for less than $3 a day and there are other great BI tools out there as well.

Even a well-designed spreadsheet can do the job, but the point is that your restaurant generates a large amount of very useful data. This data can tell you about the past and just as importantly tell you about the future.

As the old saying goes, "if you can't measure it, you can't manage it," and in a recession, you'd better be measuring.

The Owner vs. The Entrepreneur

If you are starting or already running a business and you haven't had the pleasure of reading any of Michael Gerber's E-Myth books, I would highly recommend that you grab one. E-Myth stands for the "Entrepreneurial Myth." In his books, Michael dispels many myths about being an entrepreneur and talks about working on your business vs. working in your business.

It's fairly common to see a struggling restaurant that was started by a chef or just someone with a passion for food. They own the restaurant, they run the restaurant, and they work at the restaurant. They have created a job for themselves that they can't easily walk away from. They are the restaurant. Now if you just want a job, there are better and less stressful ways of going about it, but if you want to build a company, then you need to work on it and not just in it.

What does it mean to "work on your business"? Basically, you need to spend some time outside of the kitchen and outside of the dining room and think. The goal is come up with a manual for how to run your company. Pretend that someone wants to franchise your restaurant, how would you tell them to do it?

What is the brand? How should the place look? What food should they serve? How should it be prepared? What kind of people should they hire? What kind of service should they give? What should their guests expect? What should their staff expect? How do they increase sales? How do they cut costs?

After you've taken the time to write down the answers to these kinds of questions, you'll have created a manual of what you do, how you do it, and why you do it. This manual, filled with all your systems and processes, creates tremendous value for your business. As you implement these systems, you become replaceable. The restaurant knows how to run itself. You can spend more time planning for the future and less time being the "key" employee.

It's easy to forget the "what", the "how", and the "why", when you're working 6-7 days a week, but it's time to step back and look at the big picture.

I look at it like this... It takes passion to start a business, but it takes process to build one.

FSTEC Day #1 Update

Day 1 at FSTEC was fairly quiet, but I did meet some good folks and had some good conversation. As I walked around the show floor, I was a bit uninspired. It's many of the same old companies pushing the same old things promising the same old results.

Where is the new technology? There was a great presentation on Web 2.0, but it's hard for me to imagine that 20% of the exhibitors just 20 feet away could tell you what "Twitter" is.

Unfortunately, I don't know how to fix it, but something needs to change. They need to lure more exhibitors doing new and interesting things, and let the attendees know about these new things. If it were me, I would find new ways to create social and educational opportunities. It should be a celebration of the future for the industry we all love, instead, it feels like a reunion of the past.

I'm sure the current economic climate is partly to blame, but I'm not sure there is an incentive to change for the same old companies that sponsor the event.