Sign Up to Find Out "How To Select A POS System For Your Restaurant" Webinar

As a leader in your organization, you’re expected to make smart business decisions to stay ahead of your competition. Your team looks to you for strategy, ideas, and leadership.

We know it’s not easy to stay on top of emerging technologies and new business strategies. There never seems to be enough time in the day to learn what strategies the elite restaurant and hospitality organizations are implementing to thrive in this challenging economy.

Join us on August 5 for our Thought Leader webinar series as we present, How To Select A POS System For Your Restaurant

You’re an expert in the restaurant and food service business, but do you know how to select a Point of Sale (POS) system that fits your business today and will grow with your business in the future?

In this webinar, you’ll learn:

The differences between a general POS system and restaurant POS system

How certain technologies can speed up service

Which POS features are must-haves for restaurant owners

How to select a POS system that fits your business today and will grow with you in the future

When you stop learning, you stop growing. Register Now >>

9 Ways Restaurants Can Use Facebook

Should your restaurant be on Facebook? Well, Facebook has over 400 million users, and it claims that 50% of its active users log in at least once per day. It’s a great way to promote your restaurant and its going on and best of all, it’s free. So the question is really why you wouldn’t be on Facebook. To help get you started or to help you get the most out of your restaurant’s current Facebook page, we bring you 9 ways restaurants can use Facebook.

1.Create a Facebook Page
This one seems obvious. Creating a Facebook page is simple: Just sign up and fill out the basic information about your business. Click here to sign your restaurant up for its own business page. You can also designate yourself as a local restaurant under the “Local” option. Many smaller restaurants have abandoned their own website in favor of their Facebook page. Some restaurants have both and link them together.

2.Use Updates to Convert Fans to Your Marketing Goals
Posting simple status updates about your business — or really, anything you think is relevant — will be seen by users in their homepage news feeds. This is a great way to keep your “fans” updated with your goings on as well as to stay top of mind when your fans are thinking about dining out.

3.Interact with Your Fans as Much as Possible
When a customer approaches you in real life to tell you what they think of your business, you’ll listen. So why not on Facebook? You might hear some useful criticism, or some timely compliments. Also, when you respond, you’re more likely to get them to respond — this additional activity further increases the chance your fans’ friends will see and learn about you.

4.Create and promote events online and offline
Let people know about a special Mother’s Day brunch or a regular Friday Happy Hour by sending invitations and ask people to RSVP on Facebook. This can be a great way to increase viral marketing as information about Facebook Events travels through news feeds from your network of friends and family outwards to create a greater social media footprint.

5.Use Multimedia to Show Off your Food and Dining Experiences
Photos and videos say a lot about food, if not the overall style of your establishment. Make sure to let your fans see what you offer by posting your latest or most prized dishes. Also, photos and videos of events and happy hours can be great PR.

6.Integrate Your Page with Other Marketing Efforts
Are you also running some sort of contest or special on another site? Make sure your Facebook fans know about it. Integrate all your marketing channels. The more touch points you have with your customers and potential customers the better chance of success you have.

7.Use Existing Applications to Promote Your Story
Polls, quizzes and other types of applications are readily available within the admin section for page owners, and they just take a few clicks to install. Start off modestly, try a few, and see what works.

8.Make your Page engaging with applications
Show your restaurant’s great ratings by displaying the Zagat application or add a reservations widget through Open Table on your main page; display a video of the chefs making the house’s special; allow users to click through an interactive menu. The possibilities are endless.

9.Create an App Just for Facebook Fans
A little more advanced and this is for restaurants with larger marketing budgets, but it’s worth exploring whether or not an app would make sense for your users.

Are You Ready for IRS Audits?

Over the past several years, the IRS examination of small businesses, which it defines as those with assets less than $10 million, has significantly increased. In fact, a recent report by Syracuse University’s Transactional Records Access Clearinghouse (“TRAC”) shows that IRS audits of small businesses has increased by 30% over the last five years. Surprisingly, that same report showed that the audit of large businesses, defined as those with assets greater than $250 million, have actually decreased by 33% over the last five years. With this increase in IRS scrutiny, small businesses must be ever mindful of maintaining internal controls and excellent books and records to support their tax filings.

In its review of total revenues, the IRS will often begin by comparing daily POS system information and the related bank deposits. This procedure should provide the examiner adequate comfort that revenues have been properly recorded. However, if the examiner has difficulty using this procedure to tie out total revenues, other indirect methods may be used to estimate food sales.

Those techniques may include, for instance, ingredient mark-up calculation: The IRS agent may test the restaurant’s reported pizza sales, for example, by reference to the amount of ingredients, such as flour, cheese and sauce, purchased during the year. The agent would also need specific pizza recipe information, such as the amount of ounces of flour, cheese and sauce that are used in making a large cheese pizza. Based on this information, the examiner may attempt to approximate the number of pizzas sold during the year, and estimate the total revenues from pizza sales accordingly.

As you can imagine, each of these methods can result in an unreliable estimation of total revenues by the IRS examiner. For example, factors such as food spoilage are often not considered within these calculations. As a result, such indirect methods of estimating revenues could lead to a proposed adjustment by the IRS examiner, and additional income taxes assessed. Unfortunately, such an assessment could have possibly been avoided if the restaurant owner had maintained a more reliable set of records to support its sales activities.

For larger restaurants that tend to have more internal controls in place, an IRS agent may be able to verify total revenues without having to use any indirect methods in the process. In that situation, the agent may focus more on the deductions and income tax incentives claimed, including:

Costs of intangible items: There are many intangible costs unique to the restaurant industry, such as franchise costs and liquor license costs, which must be spread over 15 years, even though the useful period of such costs may be considerably less. Restaurants that either immediately deduct such costs or amortize them over shorter periods may find themselves with disallowed tax deductions upon examination.

Employment related tax credits: Restaurants are eligible for several tax incentives related to its workforce, most commonly including the Work Opportunity Tax Credit (WOTC) and the FICA Tip Tax Credit. Since recent legislation has made these credits even more beneficial for restaurant owners, IRS agents approach these credits with even greater scrutiny. Accordingly, restaurants should be certain to properly maintain the related documentation, including certified employment forms, that are often required to claim such credits.

The overall IRS examination rate for small and mid-size businesses is still relatively low, even considering the recent increases. However, restaurant owners should remain focused on maintaining proper internal controls and reliable books and records. Doing so will not only make an IRS examination less painful, but will allow the restaurant to maximize its long-term profitability and growth.

Every Restaurateurs Number 1 Priority Should Be Backing Up the POS Server

You are the owner or manager of a restaurant. You come into your store on Monday and the computers are missing. You were robbed.

You are a student and just completed your history term paper. You turn on your printer and a power surge fries your computer. It won't turn on.

You have over 2,500 baby pictures of your newly born child (now 3 months old). You boot your computer and get a blue screen.

You spent three weeks getting your checkbook up to date, turn on your computer and get a virus notification. You can no longer get to your checkbook.

You illegally downloaded over 10,000 songs from Lime Wire and your computer hard drive no longer spins.

No matter what you use your computer for, just imagine what will be lost should your computer be gone (lost, stolen, fried, or just plain broken). You have just lost all of your important data, files, photos, music or whatever else you may have stored on your computer.

Backing up your POS server is YOUR responsibility. If you are the owner or manager of a restaurant, you need to know how your POS server gets backed up. You also need a written plan to get your business up and running due to the loss of one or more of your POS terminals via computer failure or theft.

Understand, a broken or stolen computer can be replaced. The inventory, other data, photos, music, and other lost items can never be replaced. That's why, you need to make sure you backup all of your data.

The way you back up your data depends on the importance of the data.

If you own or manage a restaurant, you may want to backup your data on a daily basis. Should you lose your data, you will only be losing one day's worth of data which may not be catastrophic.

Profit Tip: How Do I Handle Separate Checks

If You Dread Hearing "SEPARATE CHECKS PLEASE"

Many servers cringe inside when they hear the request for 'separate checks.' It can add several extra steps to the settlement process, takes more time and can leave guests frustrated, especially when they're in a hurry to leave.

Most operators wouldn't think of refusing separate check requests so here are some ways to help servers better deal with them.

Train servers to tactfully ask, when appropriate, up front, who is on what check. Don't wait until the end of the meal to find out when it will take more time to separate the tabs. Most POS systems will allow entering separate tabs and can assign them all to the same table.

If you use a cash register, servers can write checks separately and record the entire order on one of the kitchen copies or write the table number boldly on both copies.

Identifying separate checks and creating separate tabs at the beginning of the meal can definitely help speed settlement but another factor to keep in mind is how many POS and credit card terminals you have. Regardless of how you process separate checks you run the risk of gaining a reputation for slow service if you don't have enough.

A reliable rule of thumb is to have one terminal for every 4 to 5 servers on the floor. Anything less may result in bottlenecks and slow downs at the POS terminals when it's busy.

Separate check requests aren't going to go away. A few adjustments could help your servers deal with them much more efficiently.

6 Common Dining Room Floor Plan Mistakes

Did you know that people sitting at a good table will purchase 15% more than people sitting at a bad table.

People sitting in a booth will buy more than people sitting at any other type of table.

Stephani Robson is a Ph.D. and an expert in consumer seating behavior. She's also the author of Seating Charts That Work (6 Common Dining Room Floor Plan Mistakes and How to Avoid Them) that appears in the July 2010 issue of Restaurant Startup & Growth.

Dining Room Mistake No. 1. Having the Wrong Table Mix.
Many restaurants have too many tables for four ("four-tops) because it allows you to seat parties of one, two, three or four at any of these tables. If your restaurant is quiet, it doesn't matter. In a busy restaurant, you are wasting 50% of your space when you seat a party of two at a table for four. Analyze your restaurant statistics. What proportion of your guests are deuces? Do you need more tables for your parties of two? If you have too many deuces, you can easily combine two of these tables and make it suitable for a party of four. You can't divide a table designed for four people in half.

Dining Room Mistake No. 2. Putting Your Two-Tops in the Wrong Place.
In almost every case, guests strongly prefer to sit with at least one side of their table "anchored" by walls or other impermeable structures, especially when they are in a party of two. So put your deuces along walls or partitions, next to some kind of design element that helps your guests define their personal space.

A bad idea is to place deuces down the center of the dining room.

Dining Room Mistake No. 3. Ignoring Breezes and Blasts.
A cold, wind-blown guest is a miserable guest. It is not going to help your guests stay longer and buy more.

Dining Room Mistake No. 4. Forcing Guests to See What They Don't Want to See.
Guests want to see four things when they dine at your restaurant: What's on the table in front of them, the people they are dining with, the view (if you have one), and at least some of the rest of the dining room. People feel more comfortable when they have some idea of what is happening in the space around them, so don't make booth backs too high. Guests don't want to see things like wait stations, restroom doors and storage areas.

Dining Room Mistake No. 5. Keeping Staff From Seeing What They Need To See.
Great servers always know what needs to be done on their tables. Having partitions, high walls, and odd configurations make it more difficult for a server to properly serve their tables.

Dining Room Mistake No. 6. Hobbling Your Staff With Bad Service Area Design.
In many restaurants, service areas aren't so much designed as plopped into the dining room almost as an afterthought. Staff may have to walk too far to get an extra fork or refill water or coffee. Put your service areas no father than 25 feet from any table. As a rule of thumb, no table should be more than 60 feet from the food pickup area.

Tips on Selecting the Best Restaurant Lease Term (or Length)

The term (or length) of your restaurant commercial lease is an important part of your business plan and ensuing lease negotiations. However, most restaurant tenants do not take enough time to consider that one day they will eventually want to sell the restaurant. Alternatively, they may want to expand/downsize, relocate or close and so do not give the term of the lease the attention and consideration it truly deserves.

The industry standard lease term for a restaurant tenant can be either five, seven or 10 years, but often not shorter). We all know how restaurants are expensive to set up and, therefore, a 10-year amortization period is normally required on the initial term to justify that initial capital investment cost. Another point of consideration is that many restaurateurs can gain certain tax advantages by entering into consecutive shorter lease terms (for example, an initial term of four years followed by two renewals - of one and five years - and pre-exercised for a continual 10-year term). Your accountant can best explain this for you, but this effectively serves the same purpose for the restaurant tenant and the landlord, while benefitting the restaurant tenant.

Lease renewal options represent part of the overall term of the lease agreement and therefore should be negotiated at this time as well. The renewal option term is defined as the period of time which follows the initial lease term. This longer term protects the tenant so that the landlord cannot either take the space back or offer it to another tenant. Renewal options can benefit the restaurant tenant and, therefore, one to two five-year renewal option periods are common place if the landlord will agree to this.

In the real world, 10-year restaurant leases are attractive to both the landlords and the brokers who represent them. The landlord is assured of a long-term tenant while the broker, who works for the landlord, earns a commission for the term of the lease agreement. The longer the term you sign for, the more commission a broker is likely to earn. Overall, this should give the tenant increased negotiating power since the landlord is gaining the security of a 10-year term and the landlord's broker is earning up to twice the commission he/she would normally have expected from signing a five-year tenant.

Suppose you come to the end of your initial lease term and you do not have a new agreement, renewal or extension agreement in place. You will enter into what is called the overholding/holding over period. In itself, the overholding period is not a problem; however, many lease agreements contain a clause that states the restaurant tenant's rent will substantially increase during the overholding period. I have reviewed leases with built-in increases of up to 300 per cent for the overholding period. A 50 to 100 per cent increase is the industry standard. Why does the landlord charge so much? The landlord wants certainty. This is the landlord's way of preventing you from sitting back, stalling or remaining uncommitted about signing a renewal or going month-to-month.

If you wish to sell your restaurant business before your lease ends - for instance, during year four of a five-year term - the renewal option and terms will be critical to the purchaser. It is absolutely essential that the buyer be approved by the landlord and the option is transferrable to him/her (and not personal to you).

You should also know that the lease renewal term does not need to be made in five-year increments. A restaurant tenant can renew his/her lease agreement for any length of time the landlord will agree to. Alternatively, a right of termination could be negotiated if you need flexibility in the term. A right of termination is a special clause in the lease agreement which gives the tenant the right to cancel the lease. This is a one-time event … if things are not going well for you into a five-year lease renewal term, you can negotiate to leave earlier at 24 months.