Overseeing the dining experience in a restaurant and supervising service staff are only one hat that a manager wears.
Their second hat is administrative, and it’s about running the business:
- Forecasting restaurant sales
- Making an appropriate labor plan
- Communicating the plan with staff
- Executing the plan and making adjustments
- Reviewing the performance ahead of the next plan
This is a time-consuming process that typically involves hours inside spreadsheets crunching numbers. Because managers are spread thin, planning work falls by the wayside. Setting the right labor target and purchasing the right amount of product carries the most complexity because there are so many variables to consider, but this also delivers the highest return on time.
How To Hit The Right Labor Target
There’s a saying that if your only tool is a hammer, everything looks like a nail.
In restaurants, managers may feel like their only lever to hit a desired labor target (i.e. ~15-25% labor as a percentage of sales) is to reduce labor. If it’s better to err on the side of spending less, then it’s understandable why cutting staff is the most common tactic that managers use, especially if managers aren’t able to measure labor performance (spending vs. their plan).
But there’s an opportunity cost to this approach that often goes unnoticed. That is, when restaurants have less labor, they can unintentionally limit their sales if there isn’t enough service staff for the amount of customers. This is what it means to leave money on the table.
Also, when there’s not enough staff to meet demand, it creates stress on the floor. And stress on the floor leads to turnover. Turnover leads to lower average sales per server. It’s a negative cycle.
We created Axial Commerce as a performance management tool with the intention to help restaurants maximize their sales within a labor budget that fits their target.
By automating thousands of calculations into simple feedback, Axial gives managers and owners a real-time look at their actual labor relative to their plan. This feedback is presented relative to historical averages or the manager’s plan.
This information saves managers time and enables them to confidently make informed decisions instead of relying on gut feel or copying patterns that may not apply to the situation. It’s a satisfying feeling to consistently hit labor cost targets and be able to grow sales. These don’t have to be mutually exclusive.