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What is inventory management in a restaurant? And I’m sure you know the answers very obvious is the ability to manage your food and the ingredients within your restaurant. But it is also a really good way to manage the cost of not only making the item for also of selling the items, why because a good inventory management system will not only let you figure out what your theoretical food costs are, but also what your actual food costs are. And I know a lot of restaurants have challenges with this because they think it’s something that they could do on Excel, and then continue to use that approximation over time. But here’s the truth. Food is not handled the same every day, you throw in waste things, you don’t prepare things the way you should be in an ideal scenario. So all of these factors and variables affect the cost of food, and a good inventory management makes this really easy for you to track.
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Hey, entrepreneurs, welcome to a brand new episode of the Elevated Entrepreneur podcast. I’m here today to take you through the most important technology system for a f&b business owner. Why? Because technology like I’ve always say, is not a cost. However, it is a revenue generation tool, which is why today’s ultimate guide of the tech that a restaurant business owner can use is going to be super helpful for you and your friends and family that are running f&b businesses. So grab a cup of coffee, grab your headphones, and even maybe a notebook this time around so that you can hear me talk about all of the different technology systems that you need to figure out in your business. So help me cue the music and let’s get started.
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You’re listening to the Elevated Entrepreneur Podcast, a podcast designed to help retailers restaurants, and entrepreneurs simplify business operations and use modern technology to elevate their business. here’s your host, Dhiren Bhatia.
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Okay, so very big welcome to a brand new episode of the Elevated Entrepreneur podcast and this podcast episode is called the Ultimate Guide to Technology within F&B. Now that means quite a lot, doesn’t it? It does, because today’s f&b businesses look very different from the tech f&b businesses, maybe even 10 years ago, maybe even five years ago, maybe even two years ago. Now, thanks to COVID. And technology is only accelerating the growth of certain concepts. And if you’re looking to grow your f&b business, then you need to get tech in your business. And five hoping by listening to this episode, you’re going to get a breakdown of all the different acronyms and the systems that exist in today’s market so that you can grow your business. So let’s get started. There’s a long list for me to cover. So I’m going to start with the first and foremost in this list, which is POS systems. Well, what do POS stands for, POS stands for point of sale. And typically when you think of point of sale, you may think about a cash register, or a simple cash counting machine where you can punch a few buttons, and a spits out a receipt. But today’s POS systems look, feel and behave very differently compared to those systems that I just talked about. Well, firstly, the POS system allows you and your staff to get control over the order taking system. I’ve gone into so many restaurants, where waiters are still taking orders on pen and paper and then running them back to the kitchen. And that I think is outdated, and also time consuming and error prone. With today’s POS systems, waiters and runners are equipped with iPads, iPhones, and even iPods to take orders on your phone right away and have the order go directly to the kitchen right there. And then, as you can imagine, this helps your restaurant number one turn tables faster. Number two, it also gives your customer a better customer experience. And number three, there aren’t any mistakes because if I ordered a truffle fries, I’m not going to get a cheesy fries, because the waiter made a mistake and relaying the order over. And so POS systems that I’m talking about are generally cloud based, which means they work on a subscription basis, and also work on iPads, iPhones or iPods. And this is where the beauty of technology comes right in. You can start using these systems today, at very little cost because you’re not paying for a heavy bloated software. You’re paying for a POS system that is cloud based and easy to get started with. Now, these POS systems also do a lot more behind the scenes. What do I mean? Well, they also help you connect your kitchen display systems, your kitchen printing systems, your customer facing systems, and also your payment systems. And we’re going to get into a lot of that as we go through this list. But that’s what the POS is it basically a gateway to your other restaurant tech. Now what are some of the examples of good restaurant POS systems in the market today, there’s a few. And I will give you a list. And I want you to go and check out these in your own free time. First one is something like Lightspeed. Lightspeed restaurant is a phenomenal point of sale system that we help implement for our clients across the GCC and the Middle East, and even around the world. And Lightspeed isn’t a small software life with a global company with almost 60,000 customers. The other good example of a POS system is something called Revel. Revel is also a phenomenal system. It’s very, very good for businesses that do restaurant and also with a bit of retail or retail with a bit of restaurant. It’s one system that does both. Another good example of such a system is one called Goodtill. Goodtill is relatively newer to the scene, and they have a really good product, but it makes for a great starting point for a small business owner, or maybe even larger business cases. Actually, some of good sales customers include stadiums around Ireland and around London, and even entertainment venues. So you can see the scalability of the software systems is really, really phenomenal. Now So what are some of the features that you need to look for in a good POS system? Well, the first and foremost one is table management. Because like I mentioned earlier, today’s POS systems do so much more than letting you print a check. Firstly, it’s table management, I should be able to get my staff to open tables and close tables in a fraction of a second. Not only that, I should also be able to see which tables are occupied, and how long each one has been occupied. And it can also let the hostess or the attendant at the checkout counter, know which tables are open, and maybe even notify the customers of their wait time estimation and even SMS them when the table is ready. A second good feature of a good POS management is customer management. Yes, you are able to take customer information and track that within your POS systems. So when I walk into a restaurant, if they know me, they can serve me better. And today’s POS systems allow you to do just that with a click of a button. It tells you my favorite dish, how many times I’ve come what’s my bill average. And what do I love most on the menu, not only in food, but also maybe drinks and even coffee. A third good feature is order management. This is obviously one of the more hallmark kinds of features in a good POS system, being able to take and manage orders throughout the restaurant. And also these days, most of these POS systems allow for customer facing order taking systems, which means I could give you a iPad, or even a QR code system, which you could then place your order directly or your customers rather can place orders directly and go straight to the kitchen, which means less investment in time and money from the owners part because less servers or other service focused on a better customer experience. Another good feature is menu management. A good POS system will let you manage your menu within the system very easily. And also then publish the system online so that the customers can use those QR codes that I just talked about. You can also get to know your price points, what is the value of each item based on the ingredients that are used. And obviously we’re going to get into inventory management at a later point. But in its basic form, a POS system will allow you to manage your inventory, which means if a item is not in stock, or it is finished, it will let the waiter know right away. A good example here is I was at a restaurant recently, and something was not available in the kitchen. So the waiter took my order then came back in five minutes and said I’m so sorry, that item that you ordered is just finished. And that could have been avoided if they had this feature turned on or they had a POS that helped them with this feature. Now when we’re talking about POS systems, it’s not only the software that you need to keep in mind, it’s also the hardware and I already refer to some of the hardware earlier iPods, iPads, iPhones. But what about some of the back end hardware, we’re going to need a receipt printer with your receipt, you’re going to need a kitchen printer. A kitchen printer prints what we call in the business, KOT or kitchen tickets or bar tickets. These are basically receipts with the name of the item the way the customer has ordered it any special orders and then given directly into the kitchen or the drinks area so that the staff knows what they need to prepare. And good POS systems will let you split the order and it will help you route the order so that the bar gets all the drinks tickets and the kitchen, get all the food tickets. You could actually even take this a step forward within the kitchen. There are many stations, a salad station, a dessert station on TradeStation. A good POS system will help you manage this much more easily. Again, just to repeat some of the examples like a Lightspeed restaurant, Revel, Goodtill and a couple more to add on. TouchBistro, Kounta that’s KOUNTA Kounta some really good examples of modern POS management system and there’s so much more. I’m just scratching the surface. But please feel free to look around and keep an open mind. Because each one has an advantage. Each one has something special. And if you need help with any of these, you can always give us a call over at Cloudscape and my team and I will be happy to help you.
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Okay, item number two on this ultimate guide for tech within f&b is something called K.D.S. You heard me throw a few acronyms earlier on. I’m going to break them down for you. One of them is something called KDS which stands for Kitchen Display System. What is the kitchen display system? Kitchen display systems are systems that are used in the kitchen to display what orders are coming in and what is the status of that order. I mentioned already KOT or kitchen tickets well KDS can be complementing KOTs or they can be used as a standalone system. And a good KDS system is something that makes it very easy for the staff in the kitchen or the bar to manage orders and prepare orders faster, more efficiently, and without errors. KDS systems are not new, they’re very old. A very good example of a business that has been using KDS systems for a while is McDonald’s. The Golden Arches Yes, McDonald’s has been using KDS for many years, and is basically a system that tells them servers or the staff in the kitchen on what to prepare next. A good KDS system also will help them understand how long an order has been waiting for. And the colors will change based on the duration of the order. So again, it helps them prioritize orders based on delay based on waiting time or maybe there is a high priority ticket that needs more attention can be managed through a KDS, this is typically more difficult, using a kitchen printer or KOT much much more easier with the KDS system. What are some of the features you need to look for a good KDS? Firstly, something that has a timer. Usually a good KDS will have a ticking clock across all of the tickets that are standing in the system so that your staff knows how long the customer has been waiting. Color coding is another good example. A good KDS system will allow for the tickets to be color coded so that the staff knows where the order stands. Maybe even instant communication. Again, a lot of these modern KDS systems allow your staff in the kitchen to communicate with the staff outside so back of house to front of house communication is much more easier and more effective. Because now they know when the order is ready, the serving staff can come and get it. Special nodes is another good example of such a nice feature. If I’m taking orders, I can very quickly include a note that will go flash right on the KDS And my staff in the kitchen knows what to avoid putting into this order. Also, order routing similar to POS systems, I can route orders much better, depending on the KDS whether it needs to go into the patio, or the bar or the kitchen. Like we said those possibilities are limitless. So what are some of the examples of a good kitchen display system? Typically KDS systems are baked into the POS. A lot of these modern POS systems already have KDSs built into them. A couple of good examples of KDS systems are something like Lightspeed KDS. So you heard me mentioned Lightspeed restaurant as a POS, actually, Lightspeed restaurant is much more than a POS it also has many additional value apps, like KDS, so a KDS is already baked into Lightspeed restaurant. A really good example of a KDS system is a brand called Annoncer, A N N O N C E R, you can head on over to elevatedentrepreneur.fm at any point during this episode, to go grab a list of all of the different technology systems that I have mentioned. In fact, you’ll also find a really handy guide that you can download for future reference. So head on over to elevatedentrepreneur.fm.31 to get access to this amazing download that I’ve created just for you for this particular episode. Okay, the next item on this list that I’m taking you through today is something called CFDs ,or Customer Facing Displays. Now you can have multiple examples of customer facing displays. In its most basic form. A customer facing display allows your customer to see what he’s being charged for. Or he could potentially even enter his email address while you’re cashing him out. But today CFDs actually do so much more. Today CFDs can also allow your customer to place their orders directly. So they could be given an iPad, or even a large scale kiosk placed in and around the restaurant where a customer can walk up and place an order directly and even pay through that interactive screen and then get their order handed to them again. McDonald’s is a really good example of this. I know Starbucks is trying this out recently. But if you walk into any of these restaurants that you can actually walk up over to this amazingly large display. Stand in front of it, place your order, pay for it and then walk away with your order. Really, really easy way for you and your customers to manage their orders. A good couple things that you need to look into CFDs is not more than tech, but does it fit into your kind of restaurant. Again, the examples that I gave were very quick serve fast food, fast, casual kind of restaurants. Typically, you’re not going to find something like this made available in a more sit down kind of place. You could also think about CFDs as a device, like I mentioned earlier given to the customer at the table. Some all you can eat sushi restaurants in North America, do this, even today, they will actually give you at your table, a device that you can keep there for the duration of your visit, and continue to order your food directly from the device. So again, really good ways to think about how you can bring these sets of technologies into your restaurant. So what are some of the good examples of this system? Once again, Lightspeed Restaurant, Revel, Goodtill, all of these POS systems also have CFDs baked into them, or as an optional add on. So as you can see, POS systems already are proven to be so much more important than your traditional systems. Because these days, they have so much built into them. So I hope this has given you some thoughts and help you understand what CFD is, or what customer facing displays can do for your restaurant business. Okay, moving this along, the next item on this list is something that is really, really important to your business, which is inventory management. So all of the things that we’ve talked about so far, are great to have but an inventory management is a must have. And a lot of restaurants are still figuring their way around inventory management. But let’s break this down a little bit. What is inventory management in a restaurant? And I’m sure you know, the answer is very obvious, is the ability to manage your food and the ingredients within your restaurant. But it is also a really good way to manage the cost of not only making the item, but also of selling the item. Why? Because a good inventory management system will not only let you figure out what your theoretical food costs are, but also what your actual food costs are. And I know a lot of restaurants have challenges with this because they think it’s something that they can do on Excel, and then continue to use that approximation over time. But here’s the truth. Food is not handled the same every day, you throw in waste things, you don’t prepare things the way you should be in an ideal scenario. So all of these factors and variables affect the cost of food. And a good inventory management makes this really easy for you to track. Now, there’s a couple of caveats here. Number one, a good inventory management system requires a person or a staff member that is dedicated to this system. It is not a system that you want to be run by your servers, your waiters, maybe your assistant chef, or maybe even your chef because a chef is really got other things on his plate. So typically in a restaurant, or a chain of restaurants, you’re going to find a position created specifically for this which is called a food cost controller. A food cost controllers sole responsibility is to control the cost of food and use this system as his primary data management system. Having said what I’ve just said about inventory management, remember, there are ways to do this in simpler steps. You could start with just tracking inventory. Rather than trying to manage all your inventory. Just start by tracking what do I mean by that? Track the number of bottles of wine, your bottles of water, Coke, Pepsi, and so on and so forth. This gives you a place to start, you could then layer on recipe management, manage and create all of your recipes within this system. And then take it even further by calculating actual food cost, food wastages preparations, sub preparations, all of that can be managed within a good inventory management system. But you could roll this out in phases. Another good feature of a good inventory management is alerts and notifications, which means that when you are running low of a certain item, this system can actually send a notification to you your chef your food cost controller and letting them know that they need to start ordering. You can also manage bar quantities what apart quantities quantities that you need to have in an ideal scenario. So when you’re ordering, you can literally click a button that says order to part or filter part. And this system will go and look at your PowerPoint and create a purchase order, right with the power quantity so much easier when you’re creating an order list full of 5060 items. You don’t have to worry about managing quantity individually. And finally, profitability analysis. A good inventory management system obviously does everything that I’ve just mentioned but also helps you manage your profit because it helps you manage your cost. And by virtue of that it can also help you manage your profitability. It allows you to know the cost of each meal. The profit that you’re making on each menu item, which menu item is more profitable than the other and which are some of the dishes you need to keep a unit to skip.
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One last thing before we move on integrations, inventory manager system these days are not only going to work as a system, but also combining horsepower with other things. A POS system is a good example of a good integration. But there are many other things that it could integrate with, for example, a accounting system. So if your POS system is showing you all of your sales, your inventory management system can then be showing you all of your cost of goods, and plug all of that directly into your accounting system. So look for inventory management systems that have integrations for the future as well. And what are some of the examples of this? Well, there are some really good brand name software here that I can give you some examples of one is a software called Market Man. Another one is called Kitchen Cut. A third one’s called Growzer, G R O W Z E R, and don’t forget, you can head on over to elevated entrepreneur.fm/31 at any point to get a full list. And finaly, even something called Apic Base, A P I C B A S E, all of these systems do one thing and they do really, really well and that is inventory management. They are no frills, but very very utilitarian, and very easy to get started with. Now, the next few systems are not directly part of the f&b system, but can add a lot of value. And the first one on that list is a good accounting system. Now, you heard me just talk about this in the point earlier, which is managing your cost of goods, and cost of goods is not only made up by food costs, there are other costs, like salaries, rent, your utility bills, and all of these can be tracked, not in your POS system, not in your inventory management system, but a good accounting system. A good accounting system will obviously help you manage all of your revenue, your p&l, your balance sheet, and all of that. And some examples of a good accounting system are Xero, which is X E R O , QuickBooks, Sage, and so on and so forth. Some of these systems actually QuickBooks and Xero, integrate directly into your POS system, and integrate directly into your inventory management system. So you don’t have to worry about plugging these numbers in manually, or maybe even employing a person to do this full time. And believe me, there are so many brands that still do that, they have a person whose sole job is to plug numbers from one system into another, and as you can imagine, this is not only time heavy, but it’s also resource heavy, and it’s prone to errors, because just a single fat finger mistake could alter the forecast of your business. And so just before we wrap up this conversation about accounting systems, think about systems that integrate with these systems and vice versa. So look for a good accounting system that integrate with your POS system, and your inventory management system. Another really good add on system is HR and time scheduling apps. Now, I know because of my retail experience that rostering and shift management is the bane of a retail and f&b business owner, why because this takes time. And this is typically done in Excel, and then disseminated to your staff using copies of Excel or maybe pasting the schedule on the back of the door of the office, and that may be an OK way to do it. But there are much nicer and more modern ways to do this. A good HR scheduling app will allow you to not only roster and schedule your staff with the click of a button, but will also push out messages to the staff on their devices. So they know when their next shift is scheduled. Also, they can actually swap shifts, again, which is very common in this space for retail f&b brands is staff can swap their shift at the click of a button, which means that you the business owner, or the manager can take a deep breath and relax because this is not your headache anymore. So when two staff members need to swap shifts, they can do this through the app, and you get a notification to approve. Super nice and done.
23:59
So what are some of the features you need to look into for a good HR and scheduling system? Firstly, time clock and time management. Most of these modern systems will allow you and your staff to use these systems on an iPad or iPhone, any browser, PC or Mac make it really easy to manage. Another good example of a feature is staff communication. Also a lot of these tools will allow you to communicate with your staff directly from the application. So if you need to push out a very important staff update about the next team meeting or about the team lunch. This is a great way to manage those communications. And also the staff can share a base with each other. So if someone is celebrating a victory or a win, or something that they’re really proud of, they can actually put it on the app wall almost like a Facebook for your internal communications. Task management is another good feature of some of these applications. They allow you and your staff to hand out tasks to themselves and to other members of the team so you know that the task will get done, and it is all recorded so that you can go back in time and see what was asked to be done and what was not done. And finally, one of the more powerful features of a good HR and scheduling application is Auto Scheduling. Imagine if you didn’t have to spend time on a weekly or have monthly basis to schedule staff, the system can build this for you because it learns through Machine Learning and Predictive Analysis of who can work when they can work, and then automatically build out a roster that you can then approve and push out to your team. Amazing stuff, I wish I had this when I was a retailer, because it would make my life so much easier. Now, let me give you some examples of these applications so that you can go looking and figure out which one’s the right one for you. Deputy is a really, really good system. It’s something that we recommend over at Cloudscape. There are some others Planday, Zoom Shift, and lots of those. But this is just the start, take a look at these systems, and figure out which one helps you the best.
26:04
All right, there is two more systems on my list that I want to take you through, I hope that you’ve had a great time so far, because we’ve covered so much. And I’ve thrown a lot of information your way. So remember, at any given time, head on over to elevatedentrepreneur.fm/31. Appoint your friends and family to that, so they can help you download this list if you need it. Alright, so what are the last two systems that I want to talk to you about? Well, first of them is analytics. Everybody who opens and runs and f&b business understands the value of analytics. And yes, sometimes some of these systems can make it really complicated. But a good analytical system will help you analyze your data and make key decisions. And this is why everything that we’ve talked about so far is great. But it’s almost like the icing on the top. A good analytical system will allow you to plug data from all of these different systems and bring it into one nice dashboard. So whether you’re in the restaurant, or traveling, or maybe even on vacation, and you want to look at what’s happening in the restaurant, and make informed decisions, that a good analytics app will help you make this easy. So typically, all of these analytic apps are able to plug into your POS system, they’re able to plug into your inventory management system. And some of the more modern ones can also fetch data directly from your accounting, HR and scheduling systems. So really, it’s that single pane of glass that we all talk about in the IT space, so that you have only one pane of glass to look at. So what are some of the examples of a good analytics system? Well, a really good example of this is one system called Tenzo, T E N Z O, or something called Zoined, Z O I N E D. Both of these systems specialize in giving you analytics and predictive analysis of your data. They are trying to make your life easy by crunching the numbers for you, and giving them to you as bite sized pieces of information. I love the analytics part of this business because there’s so much data to churn. And it’s not easy to be done in Excel. So why do the hard work yourself? Let the system to the hard work. And the last system in my list to show you and talk to you about is the most popular one, I think these days, a good loyalty system will allow you to grow your customer base, and will allow you to grow your revenue, not by focusing on new business. But by focusing on getting customers to come back again and again. There’s a rule in business that you might have heard for rattles law, the 8020 law, the 8020 law suggests that in a business 80% of the business comes from 20% of the customers. And that’s so true, isn’t it? If you looked at your database, or if you looked at your report, you might start to see some patterns. And a good loyalty system will only encourage this behavior. A good loyalty system, as you can imagine, allows you to do so much more with loyalty. And yes, you could start with the basics about a stamp card or buy one get one. But these days, the creativity is limitless. I’ve seen restaurants do so much with a good loyalty system. You can do discounting, you can do referral benefits, tiered benefits, something that the airline industry has been doing for a very long time. And so like I said, using your imagination and creativity here can be very, very helpful. So what are some of the examples of loyalty systems? A good couple systems that come to mind firstly, are one called Marsello, M A R S E L L O. And the second one is a system called Eber E B E R both of these are very, very focused in what problem they are trying to solve, and that is cross platform loyalty. And that’s really important to imagine, today you may be only using a POS system, but tomorrow you may be using an online ordering system. Or third, you may be using a customer ordering system, all of these systems together can obviously create some havoc in your loyalty system. So systems like Marsello, and Eber can make that very, very easy. And there you have it folks, this is a super long list of the most important tech in the f&b space today. I hope you’ve enjoyed this episode. As much as I have enjoyed telling you about it. Remember, elevatedentrepreneur.fm/31 if you need to get to a handy list or even a downloadable list. Take care. Keep safe, I will see you in the next one.
30:55
Thank you so much for staying with me till the very end of the episode, you’ve done it. I’ve got three specific asks for you only if you think that this podcast is worthy of your support. And if you’ve enjoyed the content, my first request is for you to hit the subscribe button. Actually smash that subscribe button so that you can get notified when new episodes come your way. Or if you haven’t already, head on over to elevatedentrepreneur.fm, and subscribe to the podcast on the website so that new episodes are emailed to you right away. My second request is for you to help me spread the word with your friends and families and business owners that would enjoy this podcast and help elevate them too. You can do that either by leaving a review on your Apple device or just telling your friends how cool this podcast is. And finally, if there’s a question that you’ve been dying to ask me, or this pieces of feedback that you’d like to give me, head on over to elevatedentrepreneur.fm/speak, where you will be able to record a voice message that I can listen to and also maybe feature here on the podcast together with my answer. I’d love to hear from you. Thank you much love and I’ll see you in the next one.
