Mastering Restaurant Profit & Leadership with Roger Beaudoin of Restaurant Rockstars

Is your restaurant leaving money on the table? In this episode of Restaurant Leaders Unplugged, I sit down with Roger Beaudoin, founder of Restaurant Rockstars, to uncover proven strategies for boosting restaurant profitability, improving leadership, and creating a winning guest experience.

💡 What you'll learn in this episode:
✔️ The key difference between management vs. leadership – and why it matters
✔️ Menu profit strategies: How to maximize margins without losing customers
✔️ Labor & staffing solutions: The secret to hiring, training, and retaining top talent
✔️ How to create accountability systems that transform restaurant operations
✔️ The biggest marketing mistakes restaurant owners make (and how to fix them)
✔️ Technology in hospitality – what enhances the guest experience vs. what hurts it

With over 30 years of experience, Roger has helped countless restaurants streamline operations, cut costs, and scale profitably. Whether you’re a new restaurateur or a seasoned pro, this episode is packed with actionable insights to help you run a more successful business.

🎧 Tune in now and take your restaurant to the next level!

👇 Connect with Roger Beaudoin:
🔗 LinkedIn: https://www.linkedin.com/in/roger-beaudoin-21590016/
📸 Instagram: https://www.instagram.com/restaurantrockstars/
🌍 Website: https://restaurantrockstars.com/
📺 YouTube: https://www.youtube.com/@RestaurantRockstars

🔔 Enjoyed the episode? Leave a review and subscribe for more expert insights!

#RestaurantLeadership #RestaurantProfit #RestaurantRockstars #HospitalitySuccess #RestaurantMarketing

Restaurant Leaders Unplugged with Sebastian Stahl

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Transcript

(0:00 - 0:24)

We see a lot of things that are trying to replace the human element with labor, because they've recognized that there's sort of a labor challenge out there. So what can we do to reduce the labor? We see these robots flying around on the floor and all this kind of stuff. Whatever it is, does it enhance the guest's experience? Does it make them feel special, unique? There always should be a human personal touch that sets your place apart, because people still appreciate that.

(0:24 - 0:34)

People go out to restaurants for a variety of reasons, but most often it's a special occasion and they want hospitality. They don't just want a good meal. They want an experience.

(0:34 - 0:50)

Welcome to the Restaurant Leaders Unplugged podcast, where real talks with restaurant leaders take center stage. Discover the challenges and victories that define success in the culinary world. Dive into essential strategies from marketing to operations and gain insights that will transform your approach to your restaurant business.

(0:51 - 0:59)

Don't just keep up, lead the way. Join me, your host, Sebastian Stahl, on this journey to excellence. All right, welcome to Restaurant Leaders Unplugged.

(0:59 - 1:22)

We're joined today by Roger Bedouin, a seasoned restaurateur, consultant, and founder of Restaurant Rockstars. With over 25 years in the restaurant industry, Roger has built successful business like a Matterhorn ski bar and how he helps other restaurants navigate challenges and maximize their potential. His book, Rock Your Restaurant, and his popular podcast, Roger shares practical strategies and insights that are transforming the industry.

(1:23 - 1:31)

So anyways, I'm really excited to have Roger on the show. Roger, welcome. Jeez, Sebastian, thank you so much for the kind introduction.

(1:31 - 1:37)

I'm happy to be here. All right, Roger. So this is for the people that don't know you or might not know your background.

(1:37 - 1:49)

Let's start at the beginning. I know you have quite a background and experience. So how did you get involved first in the hospitality industry? How did it all start? Well, you know, it goes way back to my first job in the industry.

(1:49 - 1:59)

In high school, I was a dishwasher at a private country club. And that's not a very glamorous job, as anyone knows. But a lot of people start off in the dish bit and work their way up.

(2:00 - 2:11)

And interestingly, the owners of this club saw something special in me. And within, I'd say, two months of being a dishwasher, they promoted me to be a bartender. And they trained me to deliver hospitality.

(2:12 - 2:28)

And with a private club, of course, we've got professionals, doctors and lawyers and business owners and that sort of thing. And they'd go out and play a round of golf and they'd come in and they had their, they would call it the 19th hole or the lounge, of course. And they'd come in for lunch and I would make their drinks.

(2:28 - 2:39)

And I got to know people personally, just as a point of pride to deliver hospitality. Maybe it was my upbringing. No one really trained me in the hospitality piece, but it was important to me to get to know people by name.

(2:39 - 2:46)

And all of a sudden, people appreciated that. And it was a very lucrative position. And then that skill took me through college.

(2:46 - 2:55)

I made good money. But never did I think I'd actually be in the restaurant business as an owner. That was just a early beginning, but I think that stayed with me.

(2:55 - 3:04)

And then I saw an opportunity. You know, I moved to a small town in Maine to take a job in marketing. And it was a large resort in the community.

(3:05 - 3:18)

But oddly, the town hadn't kept up with the business that came to the resort. And there were so many opportunities for restaurants and bars and retail shops. And the businesses that did exist, although they were few, had lines out the door.

(3:18 - 3:30)

And I tried these different businesses and the service was average and nothing sophisticated about the offerings. And I just said, wow, I think I can do better. So I came up with an idea.

(3:30 - 3:42)

I was really inspired by wood-fired pizza because when I was in graduate school, I lived in Italy, Sebastian, and I ate a lot of pizza. But I was captivated by the history of pizza. You know, it was invented in Naples, Italy.

(3:42 - 3:57)

And if you were to walk into any pizzeria in Naples or literally in Italy, most of the ovens are right in the middle of the floor on display because they're works of art and they're covered with beautiful mosaic tiles. And it's all about show. And the pizza makers are throwing the doughs in the air.

(3:57 - 4:02)

And it's this real experience. And I remembered that. And here I am in this small town.

(4:02 - 4:12)

And suddenly I'm like, wow, this place would really could use a business like that. It's a more sophisticated offering. And so I kind of went to the banks.

(4:12 - 4:26)

I wrote a business plan and I wanted to run before I could walk. And I think that's the interesting part of the story. My business plan was literally asking for a million dollar loan because I wanted to buy land and I wanted to build a building in a great location.

(4:26 - 4:44)

And I wanted to go all the way right off the bat. And as you can imagine, the first question that the bankers asked, how many restaurants have you ever owned or managed before? And I'm like, you know, I was a bartender when I was in high school, but I had to be honest, of course. And I got laughed at a lot of offices.

(4:44 - 4:53)

They're like, yeah, see you later, kid. We're not going to give you a million dollar loan kind of thing. But then I got fortunate after maybe the 10th or 11th banker meeting.

(4:53 - 5:05)

I met a senior loan officer for a large major New England bank that actually visited this resort almost every weekend. And he knew the situation. He knew I had a master's degree in business.

(5:05 - 5:11)

He's like, I know you can run a business. You're right. There's a huge opportunity here, but I'm still not going to give you a million dollars.

(5:11 - 5:26)

He's like, if you scale this project way back, I can give you about 150,000 bucks. So now I got to walk. And so you got to find a lease space on the wrong side of town with a leaky roof and no parking that had four failed restaurants before I got there.

(5:26 - 5:40)

And I really didn't know the ins and outs of running the business. I knew how to run a business, but I didn't know the restaurant business per se. So I had to fill in a lot of missing pieces and literally it was an overnight success, but we kept it simple.

(5:40 - 5:44)

It was just the wood fired pizza. It was one salad. It was one dessert.

(5:44 - 5:56)

It was beer and wine, only soft jazz music in the background. And we had lines out the door and we offered a more sophisticated experience. And also service was exemplary.

(5:56 - 6:19)

I really trained my team every single day and outstanding guest service. So then to make the long story short, two years later, after proving I could do what I said I could do, I got the million dollar loan, bought the land, built the building and the place just grew from there. And then that led to other restaurants that I bought or started from scratch and been in the business now 30 years, no longer own those restaurants, sold them all.

(6:19 - 6:26)

But that's kind of the story, how I got into hospitality. Man, that's an interesting story for sure. Then like all of us, I mean, we start with these.

(6:26 - 6:54)

Well, many of us, like I did also, like I wanted a million dollar restaurant and that wouldn't fly. So what led you, Roger, to after you sold your restaurants and everything to get into consulting and really looking to help other restaurant owners? What really motivated you? Well, you know, selling the restaurants was really an exit strategy, but that I had spent such a large part of my life. And I have to credit my wife for this because she's like, you've got all this restaurant operations knowledge in your head.

(6:54 - 7:04)

You had super successful properties. You had more than double the net profit of the average restaurant and you really could help other people. And that's really where it all started.

(7:04 - 7:32)

So she suggested that we start another business and that we put together online training systems that other restaurants could use that were turnkey, that would teach them all the things that made us successful. And so we came up with this name, Restaurant Rockstars, and it became diversified because not only do we sell the online courses, but I also consulted in what I consider to be the fundamentals of this business. There's three major foundational fundamentals.

(7:32 - 7:53)

It's cost controls and maximizing profit. It's training your team in service and salesmanship because sales are the lifeblood of your business. And then marketing and affinity and getting new and repeat business and also trackable, knowing where the business is coming from and if it's even working and delivering an ROI.

(7:54 - 8:16)

So I really consult on those things, but I've also branched out in a couple other areas because so many restaurants with inflation and with higher labor costs are struggling to make a decent living. And if you're an owner, you've got labor challenges and you've got rising costs. And I noticed that a lot of restaurants just don't cost out their menus or do that regularly.

(8:16 - 8:34)

And in many cases, I find out that they're losing money selling certain items and that lower profit items are taking sales away from higher profit items that they could be selling. They might be filling their seats on their busy days, but they're kind of wondering why the bank account's not growing because the menu just isn't profitable. So I specialize in that.

(8:35 - 8:51)

And then leadership is a big thing, Sebastian, because I'm sort of on a one man mission to change the term from management to leadership and delegation to empowerment. Those are two completely different things when we're talking about both of those concepts. Yeah.

(8:51 - 9:13)

Just because someone holds the title of manager or is promoted to be a manager doesn't mean that they're experienced, they're competent to lead or that they inspire and motivate others to top performance. And that's the difference. But a leader recognizes talent, nurtures and develops that talent, recognizes and rewards and incentivize people for taking on additional responsibility.

(9:13 - 9:41)

There's really accountability I think is the missing piece. So many people ask me, why don't people show up on time or why do they come in sometimes and they call in three times a week and sometimes their performance is okay and then they're just not consistent. And my first question is, well, do you have a way to track accountability? Do you have career descriptions that crystal clear set out what your expectations are and they understand those and they signed off that I understand what you expect in each of these jobs.

(9:41 - 9:59)

And do you hold them accountable for those things? Do you have performance reviews? Do you have disciplinary procedures for minor and major infractions? All these things are missing in a lot of the restaurants that I've worked with. So I really enjoy the leadership piece because I think that's a real needle mover as is the menu costing piece as well. No, definitely.

(9:59 - 10:06)

And we're going to get into leadership in a second. Those are a few questions I have about that for you. For the restaurant owners that are listening, I know you can provide a lot of value with that.

(10:06 - 10:37)

My next question is about challenges. You already brushed them, some of these things that are happening right now, but from your perspective, when you start working with restaurant clients, what are the biggest challenges that they face? Is that a pattern? Is that a common denominator? Well, labor for sure is the most common thing since the pandemic, because I think we've identified that lots of people have left this industry, but now people still get into the restaurant business and some think of it as a way to get somewhere else. It's a temporary job.

(10:37 - 10:48)

It can be lucrative. And that's why turnover has been so prevalent in our industry. But what we need to demonstrate is a path forward, whether you're a server or a bartender or a host or a cook, it doesn't matter.

(10:48 - 11:06)

It's like some people are going to thrive in a position. They're going to be perfectly happy. And as long as there's leadership in place and recognition rewards, and we create a company culture that they really feel like they're a part of, that we give them a voice, it's perfectly fine if someone just wants to be a stellar line cook or a bartender or whatever it is.

(11:06 - 11:19)

But there are also people that are looking to grow a career and to really move forward. And we are teaching life skills in this business. We're teaching people skills and we can train people to become leaders in our organization.

(11:19 - 11:29)

And I love this word, intrapreneur, Sebastian. Everyone's heard that word entrepreneur. It's someone who takes a risk to start a business in the hopes of making a profit.

(11:29 - 11:38)

And that's a very simple definition, of course. But an intrapreneur is someone who works for your business, who just has something special in them. They have initiative.

(11:38 - 11:48)

They go above and beyond. And if you recognize this, and if you can give them a path to more responsibility, they're going to continue to thrive in your business. They're going to help you run that business.

(11:48 - 11:56)

They're going to help you grow that business as long as there's an incentive to do so. And that is very, very powerful. And I witnessed this.

(11:56 - 12:12)

I created these types of people in all my restaurants. And that in itself is an exit strategy because so many restaurants today, Sebastian, so many owners and general managers are tied to those properties. They're really missing their kids grow up, the soccer games, the graduations.

(12:12 - 12:16)

It's like the holidays. And that's a drudgery. There's no passion in that.

(12:16 - 12:23)

Or you've got that mindset. If I want something done right, I got to do it myself. I got to be there or else the place will fall apart.

(12:23 - 12:39)

And that's where you need true leadership and you need to empower and not delegate and create people that take that initiative that you can trust because they've got good judgment. They've got good skill sets and that they take pride in helping run that business. And that's when you can step away.

(12:39 - 12:43)

And that's a system. So I'm a big believer in that. But labor is the number one challenge.

(12:43 - 12:59)

But let's take that a little deeper. Everyone still is in the habit of putting the sign in the window or the sign on the road that says now hiring. And that is a huge mistake because there are three types of employees in any business, but we're talking about hospitality here.

(12:59 - 13:11)

So let's just, we'll stick with hospitality, but it doesn't matter. You've got A players, B players and C players in any business, ours included. And the A players are those people that have great personalities.

(13:11 - 13:26)

They have a passion for serving the public or being in the kitchen and putting out amazing products. They really enjoy the team spirit and the camaraderie of restaurants and bars because they're fun places to work. And they really apply their unique personalities.

(13:26 - 13:30)

They have team spirit. They help each other out. You wish you had 20 more people like this.

(13:31 - 13:46)

Now B players have all those similar attributes, except maybe one thing. Maybe they've never worked in a restaurant before or in hospitality, and all they need is a little practice and a little experience, but they bring the right attributes to the table every day. And that's why you use mentoring and shadowing.

(13:46 - 14:06)

If you can assign a B player to A players more than one, because people have different styles and ways of doing things, but you're going to pick up something from any of them in best practices. And then suddenly the B player is an A player. Now the C players, this may sound harsh, but these people are not doing your business any favors.

(14:06 - 14:12)

They don't care about quality. They don't care about guest service. They just show up for the paycheck when they show up.

(14:12 - 14:21)

And that's what you get when you put the sign out there. If you get anyone at all, you're going to get someone else's C player. The alternative to that is recruiting.

(14:22 - 14:41)

If you've got one or two or three A or B players, or even the whole team, I would ask them, who do you know that is looking for a difference in their job or is looking for a real way that they can move up in their career? And we have incentives in place. Now this goes back 30 years. I'll tell you a story.

(14:41 - 14:58)

I'm starting that first wood fired pizzeria in this small town. And at the very same time, there's a hotel going up in town and they're having job fairs and they need to hire valet parkers and concierges and housekeepers and servers and bartenders. And I'm like, Oh my gosh, how am I possibly going to compete? I need 15 people.

(14:58 - 15:02)

They need like 200 people. And it was all about recruiting. I had one A player.

(15:02 - 15:12)

And I said to that person, who do you know that might be looking for something different? We're going to be unique and different here. We're going to care about people. We're going to have recognition rewards programs.

(15:12 - 15:15)

We're going to have team building. We're going to have fun. We're going to pay well.

(15:15 - 15:34)

And I said, if you bring me any of those people, I'm going to give you a hundred dollars. Now, 30 years ago, that was a lot of money, right? A hundred bucks. And then I said, if that person that you bring in stays 60 days and does a great job, assimilates our culture and our training, and we create a real great person and they're still there 60 days later, I'm going to pay that person 200 bucks.

(15:34 - 15:56)

So now it just costs me $300, but suddenly I filled the place with great people and those people stayed and the turnover was very low. And that philosophy stayed with me. And I believe when I sold my biggest restaurant in 2014, and this happened in all of them, I had a 97% retention rate and there were very few, very little turnover.

(15:56 - 16:16)

And it was all about incentives, recruiting, recognition, rewards, team spirit, company culture, all those things made the difference. And unfortunately, I don't see that a lot with the restaurants I'm working with, but that's what I love working on. Helping them change that whole mindset and culture and approach to the business.

(16:16 - 16:22)

It's not about running a restaurant. It's about running a business. And that's just one foundational element that's so important.

(16:22 - 16:47)

That's fantastic, Roger. But you actually mentioned something very important there, Roger, with this whole thing about careers and the lack, or I would say the misperception that being in the restaurant industry can't be a career. Why do you think that people never associate being in the restaurant industry as a career? You talk about a path forward, right? And we've experienced that also in our restaurants.

(16:47 - 17:27)

And we're always trying to figure out how can we do this? Changing that perception, it can happen at your restaurant level, your restaurant or the owner's restaurant, but at least that's a bigger change, a bigger challenge, right? For the industry itself, you know what I mean? Because of just the perception of the jobs. So what is your take on that? And how would you go about changing that perception? I mean, you've mentioned a lot of things here now about everything he just talked about, but is there anything else that you would think of that could help change that perception on a bigger scale? Yeah, that's very interesting because again, it goes back to, well, in Europe, right? This business is considered a career. If you go to France or if you go to Italy or Spain, it's like these people are career people.

(17:27 - 17:40)

And here in America, I think it's because we hire a lot of young people and they really don't know what they want to do. And they just get a job in a restaurant and it's like, okay, they go back to college or something and then they leave and then they do something else. And that's a little bit of it.

(17:40 - 18:09)

We're over-reliant on seasonality of people because you hire someone in the fall or in the summer, and then you're going to lose them weeks later if they go back to school or they find that this isn't for me, or it's really about fit. You have to find people that really fit your organization, that have the right approach. And then when you find them, you need to give them lots of reasons to stay and paint a big picture that if you stay, and if we get a lot of people like yourself that stay, we can grow this business.

(18:09 - 18:17)

We can open other locations. We can make you a leader and you can run two or three restaurants. You can become a district leader.

(18:17 - 18:28)

You can go places in my business, or you can help me run this one. Not everyone, again, wants additional responsibility, but that's one way of keeping people. And then I think I mentioned also giving people a voice.

(18:28 - 18:54)

People need to know that their contribution matters, that their talents are recognized, and that it's not just work in exchange for a paycheck and the boss just barks orders at people, tells them what to do, has expectations, but doesn't go the extra mile to nurture and develop the talent and to treat people like they're valued versus expendable resources. And I think that's the way people approach things before the pandemic. And then suddenly everything went sideways.

(18:54 - 19:02)

And now that approach doesn't work anymore. You can't just be the boss that's in the office, that's a figurehead. You've got to be actively involved.

(19:03 - 19:16)

And then again, the exit strategy is giving people responsibility and trusting them to perform for you and then giving them positive feedback. And it's okay when people make mistakes. We just don't want to set them up for failure.

(19:16 - 19:26)

And that's where what I believe career descriptions fit in. And most people call them job descriptions, but I never did. I always called them career descriptions because I wanted to show people this is a career.

(19:26 - 19:40)

It's not just a job. And if you like us, and if you like our company, and if you want to move forward, we're going to give you opportunities to do that. And the accountability piece I talked about, Sebastian, let me give you a brief framework of a career description.

(19:40 - 19:53)

It's three pieces. And this is a very simple template, but starts at the top of what I call key success factors. And that's a series of words or phrases that you would expect in any job, or I should say position in the restaurant.

(19:53 - 20:10)

And it varies by position, but this is what you expect the person to come in the door and just bring to the table. And maybe that's personality, service, detail oriented, eyes wide open, hustle, accurate cash handling. It could be a number of things like that, but that's the basics.

(20:10 - 20:34)

The meat of the career description is primary responsibilities. And it's a list in very explicit detail of all the things you would expect this person to achieve within that position. And when you sit down with a person that's been working for you a while, if you don't have these in place or a brand new hire, every single primary responsibility has a blank line next to it.

(20:34 - 21:14)

I used to read, you know, you give the person a copy of the career description and I used to read it and ask that person, do you understand what I expect in this responsibility? And then two, can, and will you do it to the best of your ability? And sometimes there's a little training involved and yes, we're going to train you, but once the training is done, can you do this? And will you do it to the best of your ability? And if they say yes, of course they're going to say yes. They initial that line. And now you as the expert, knowing what those expectations are in each position and every job in the restaurant, whenever you notice something going sideways, you immediately bring that person in the office.

(21:14 - 21:38)

But instead of being the boss and saying, get out there and do it the right way, you simply ask them, you said that you could do this and I'm seeing you do that. And instead of saying, get out there and do it the right way, you say, what can you do to get your performance back on track to meet that expectation? And then you wait for the answer and they have to tell you what they're going to do to change the behavior. And then when they walk out that door, they know you're watching.

(21:39 - 21:49)

They don't want to be called on the carpet again. So the behavior immediately changes for the positive. And then there's got to be recognition rewards when they do a great job, of course.

(21:49 - 21:55)

And I can talk about some of those simple programs. So that's the meat of it. You got primary responsibilities, depending on the position.

(21:55 - 22:01)

It might be five things. It might be 10 things, but always with the blank line, they sign off. Yes, I will do that.

(22:01 - 22:18)

The third piece is if you do a stellar job with all those primary responsibilities, where can I go from here? Where can I move up if I want to move up? And what's the incentive to do so? And then that's the goal that they're working for. Okay. So that's the career description.

(22:18 - 22:30)

That's fantastic, Roger. I mean, there's so much right into what you teach and accountability was or us also in our restaurants when I was in it as well. That was the biggest part because that's what moves things forward.

(22:30 - 22:40)

The accountability, we always talked about accountability because it was such a big thing, but thank you for clarifying. That is super helpful. Roger, you're talking about systems, right? And you emphasize systems in your book.

(22:40 - 22:56)

You emphasize systems in what you teach and everything. Can you walk us through just basically the main parts of a system and how you help other restaurant owners build these? Okay. So financial controls are very important and it goes down to, well, there's some elements to it.

(22:56 - 23:12)

I would say the most important would be starting with inventory. I can't tell you how many restaurants think that taking inventory is figuring out next week's order when it's actually calculating the value of your goods on hand at any given time. So you need an inventory system.

(23:12 - 23:24)

You need to be able to take accurate physical counts of everything on hand, both in the kitchen and behind the bar in your beverage program. So that's a system unto itself. It's not as hard as it seems.

(23:24 - 23:40)

I have all the templates for this stuff, but just the basics. Imagine to do something efficiently, you arrange everything to make it as simple as possible to count. And there's so many different places that people store food in the restaurants is obviously a big walk-in.

(23:40 - 23:49)

In most cases, there's freezers or multiple freezers. There's on the line, there might be little refrigerators or sandwich fridges or whatever. We got dry goods for the things that aren't perishable.

(23:49 - 24:02)

They're in cans, but you got to list everything. I use spreadsheets because I believe it's very important to understand this from a fundamental standpoint, so you can do it with pen and paper. And then if you want software, sure, there's software out there.

(24:03 - 24:20)

I haven't found any that really work well, that are really accurate, that aren't onerous to use, but nonetheless, you take your physical counts. I believe you should do this once a week until you reach what I call your sweet spot. So let's just say you count the merchandise behind the bar, in the walk-ins, in the food.

(24:20 - 24:33)

These are two separate directions. First, we're going to do food, then you're going to do beverage, but let's just concentrate on food for now. You walk around, you take all your physical counts, and then the template is going to calculate a total value the first time you do it.

(24:33 - 24:44)

Maybe it's $5,000, maybe it's $10,000 worth of food. You're going to do the very same exercise a week later, and then you're going to get a whole different number. Maybe it's more, maybe it's less.

(24:44 - 25:09)

There are two steps to taking inventory. Once you've got your physical counts and your spreadsheet automatically calculates the value, whether it's 5,000, 10,000, doesn't matter, and you take it a week later, there's another step, and that is a formula to calculate your cost of goods, your food cost percentage, and it's this. The very first time you take that inventory, let's just say it's $5,000, that's your beginning inventory.

(25:09 - 25:24)

That's the very first time you take the physical counts. During the week following that count, you're getting purchases that come in the door, maybe from one supplier, maybe from a variety of suppliers. You list the date and the amount, and this is food only.

(25:24 - 25:34)

Don't make the mistake of counting mop heads and rubber gloves and all this kind of stuff. We're talking about food only. If you sell it and serve it on a plate or out the door, it's food, and that's all you're counting.

(25:35 - 25:56)

All right, so purchases of food only, and then you have an ending inventory, which is one week later when you take those counts again, and then there is what is called usage, and then you have your sales. Here's the formula. Beginning inventory plus your purchases minus that ending inventory number, week two, equals usage.

(25:56 - 26:26)

Now, what is usage? Usage is everything that you sold to a customer, anything that you sold to staff at a discount, anything you comped off the check, voided, threw in the trash, got spoiled or wasted. That is your food cost, and that's the number that is calculated on this spreadsheet, and then you divide by food sales only. Don't make the mistake of including beverage sales because that was a separate calculation, but when you divide by food sales for that weekly period, it's going to give you your cost of goods percentage.

(26:26 - 26:53)

Now, the best time to take inventory is when your inventory levels are at the absolute lowest, and for most of us, that's at the end of a busy weekend. You bring in food all week, your Friday, your Saturday, your Sunday blows through all that stuff. You got very little left, and then it becomes very easy to count, so it's very important to always count it at the end of that period when you're at the very lowest point, but before the first delivery truck comes in and starts bringing stuff in.

(26:53 - 27:06)

So, that's either Sunday night at the close of business or early Monday morning, and always do it at the same time. Now, I mentioned you do this four weeks in a row because you want to find what I call your sweet spot. So, let's just say you do this exercise for the first week.

(27:07 - 27:14)

You take two physical counts, the beginning of the week, the end of the week. You figure out that your food cost was 32%. That might be good.

(27:14 - 27:24)

That might be your sweet spot. Maybe you're happy with that depending on the concept of your restaurant. You take inventory a week later, you do the exercise again, and suddenly get a 36%.

(27:24 - 27:34)

You do it again after that, and it's 33 and a half. You do it again one week later, and it's a 34. You don't know what your food cost is because it's all over the place.

(27:34 - 27:45)

It's not 32, 32 and a quarter, 32, 32. Once you reach that sweet spot with consistency, you no longer have to do it weekly. Then you can go to 30 days.

(27:45 - 27:58)

As long as it doesn't spike, then you've got a system now. But you really need to find that sweet spot and try to stay in it. And if it spikes, then you can go investigate what happened, what threw things off.

(27:58 - 28:12)

That's one important piece, calculating your food and beverage cost. Then labor cost is something that no one really monitors also. Your payroll from week to week and what percentage the payroll cost is of sales.

(28:12 - 28:24)

And you want to stay in that sweet spot too. And it's just a simple system, but maybe 30% is a really solid labor cost for you. And one week you get a 30, and the next week you get a 38.

(28:24 - 28:40)

It's like you're losing money unless you dial this in and you have accurate scheduling. You make sure that your people punch out because if they forget to punch out, then that system automatically adds hours and hours to their time. And if you don't catch it, that's going to cost you extra money.

(28:40 - 28:58)

There's certain labor abuses. I can go into real deep detail about how to make money, but essentially we're talking about prime costs here. Just to summarize, prime cost is the term we use for the sum total of our food, beverage, and labor costs expressed as a percentage.

(28:58 - 29:29)

And the benchmark they say in order to make money in this business is somewhere between 50 to 60%. And simple math will tell us that compared to sales for every dollar of sales, if 50 or 60 cents goes to food and labor, you only have for say 40 cents left to pay all the other expenses in your restaurant, the lease on the property or the mortgage and the insurance. And it goes on and on, the dumpster in the parking lot, you name it, and take money for yourself.

(29:29 - 29:38)

So these are very simple calculations that a lot of restaurants are missing. Those are important cost controls and how to maximize profit. Absolutely.

(29:38 - 29:46)

Thank you, Roger. That's super, super helpful. And Roger, but in this current climate, we're talking about high labor costs, high food costs, inflation, all that stuff.

(29:46 - 29:59)

What are you seeing in terms of prime cost and what are restaurant owners really doing to address this to still remain profitable? Of course, increasing prices is one way, right? But many people are afraid that they will price themselves out. Yep. You're hitting a really, really important topic now, Sebastian.

(30:18 - 30:26)

So thank you for doing that. OK, so with inflation and rising costs, we cannot really control that. Labor is at its highest point ever, especially in the kitchen.

(30:27 - 30:34)

And that's really hard. And that's why margins are shrinking. But the only thing we can control is the profitability of that menu.

(30:34 - 30:49)

And yes, you said something about there's a ceiling. There's only so much you can charge for your menu items without people suddenly saying there's no value here anymore. But the biggest thing that I see that I also specialize in is a menu profit analysis.

(30:50 - 30:56)

So let's take a deep dive into that. Imagine that any menu has different categories. We've got appetizers.

(30:56 - 31:01)

Some restaurants call them starters. There's soups and salads. There's burgers and sandwiches.

(31:01 - 31:04)

In some cases, there's pizzas. There's entrees. There's desserts.

(31:04 - 31:11)

Those are all categories. Now, I mentioned earlier that restaurants aren't costing out their menus. And that's the very first step.

(31:11 - 31:28)

You need to know exactly what it costs you to serve any menu item to a customer. What does it cost you in terms of ingredients only? Not labor, just ingredients. Now, you can figure this out by getting your invoices from your suppliers or some of the bigger suppliers.

(31:28 - 31:45)

You know, the big three suppliers will give you what is called an order guide, which is a list of every single item that comes in the door that you buy from them. How it comes in, whether it's in the case of the number 10 can or whatever it is, how much you pay for that item. And now here's where the fun part begins.

(31:45 - 32:01)

You sort of reverse engineer all the ingredients that go from the large case into how many of that goes into one entree or one appetizer. All the different ingredients that go into anything. And you've got to do the simple math of the calculator and figure it out.

(32:01 - 32:08)

And then you add up all those things. I've got a template for this too, that automatically calculates it. And it's going to tell you a couple of things.

(32:08 - 32:20)

It's going to tell you what your plate cost is. And that's just the sum total of the ingredient costs. And then you're going to type in on this template, what the price you charge on the menu to the customer is.

(32:20 - 32:35)

And then the simple math is going to calculate your food costs. So it's the plate cost divided by the menu price equals the food cost for that dish. And then the menu price subtracting the plate cost is the profit per item.

(32:35 - 32:57)

So let's just say you've got, I don't care if it's in a three ring binder or in the cloud on your computer, but you've got a cost sheet for every single category, every single menu item. I compare one category at a time, the profitability of number one, number two, number three. If you've got five or six appetizers, I ranked them in terms of most profitable to least profitable.

(32:57 - 33:24)

And you know what I find in every category in a lot of restaurants, the difference in profit in each category is many, many dollars. And then if you were to do a product mix report or sales report on your point of sale system and plug in a date range, perhaps a year's worth of data or six months, depending on how often you change your menu. You're going to see how much potential profit you're losing because every time you sell this, you're losing $3 from what you could have sold.

(33:25 - 33:45)

And it's even scarier on the entree side. I see restaurants losing eight, 10, 12, $15 every time this sells versus that. And yes, I know that not everyone is going to buy the most profitable item, but the whole point here is you can design a menu where everything contributes a similar profit that's within a dollar.

(33:45 - 33:56)

But not losing three, five, six, seven, eight, nine, $10. And you simplify the menu. You make sure that anything that's a really popular seller, those are the things that you can raise the price on.

(33:56 - 34:15)

Cause you know, people love it and the market will bear price increase there, but something that sells in big volume, but you're making very little profit. If you don't raise the price, you're losing money selling those items. So this is a whole analysis that moves the needle and this is how you combat those high rising prices and high labor costs and all that.

(34:16 - 34:28)

If you can dial in your menu where everything contributes a similar profit, you don't care what sells as long as you're moving the merchandise and you don't have a waste or a spoilage or a theft issue. And then everybody's happy. That's great.

(34:28 - 34:34)

Yes. And we're seeing that more and more, just the streamlining of menus, right? And operations. Yeah, for sure.

(34:34 - 34:46)

To disdain. So Roger, I know you have an Academy restaurant, Ruckser's Academy, and where you focus on, I mean, you teach about all of this stuff we're talking about, but then you also talk about teams. We've already touched about training.

(34:47 - 35:05)

Why do you believe training is such a vital part of restaurant success and how do you help restaurant owners do that? So let's start with the magic word hospitality, right? That drives our business. Everyone has their own definition of what that means. And I learned a long time ago, maybe I've been learned when I was that dishwasher turned into bartender.

(35:05 - 35:26)

I forget when I heard, but my definition forever has been hospitality is absent. When something happens to your guest, hospitality is present. When something happens for the guests and we trained our people every single day, we believe that pre-shift exercises were important and not 20 minutes, just five or 10 minutes strategy sessions.

(35:26 - 35:34)

We train people in the basics of hospitality. Guests were looking for it to be recognized. They wanted to be acknowledged and they wanted to be served.

(35:35 - 35:45)

And with that service comes product knowledge. Okay. Because if you know your menus inside and out, because customers, I like to call them guests ask questions all the time.

(35:45 - 36:00)

And you can either leave a positive impression by knowing these things and taking your guests on what I call the magical journey of everything that's unique and special and different about your restaurant. Or you can say, I don't know, let me go ask my manager. And that sends a negative impression.

(36:00 - 36:23)

So training is vitally important in both hospitality, product knowledge, restaurant knowledge. What's unique, special, and different about your place that sets you apart from the competition? Because your goal as a front of house person is to make friends with the guests every shift so that they come back, they want to ask for you by name. And then you want to deliver an amazing experience because every restaurant in the world.

(36:23 - 36:30)

We're talking about America here, even in a foreign country. Doesn't matter. Gets new customers in the door every day for a variety of reasons.

(36:30 - 36:37)

Maybe it happened to be lunch or dinner time. They're driving by, they were hungry and they see your place. It looks okay from the outside.

(36:37 - 36:44)

They walk in the door. They don't know the first thing about what makes your place. What are they going to enjoy? What's unique or special about this place? They'll sit down.

(36:45 - 37:05)

So many restaurants, the host gives you a menu, you're sat at a table and now you look at it and these restaurants leave the chips fall where they may. It's like they have order takers on the floor that are either really good at memorizing what the order is, or most of the time they're writing it down. What do you have? They take the order, they bring the food and then they give you the check.

(37:05 - 37:11)

And to me, that is a boring, ordinary, average experience. Anybody can do that. That's being a restaurant, not a business.

(37:12 - 37:27)

But if you're so well trained that you can make suggestions at any stage of the meal and bring these things to life so the guests can see it, smell it, and taste it before it even comes out of the kitchen or the bar. They've made the sale. There's certain techniques that enhance the dining experience.

(37:27 - 37:35)

And this is being a personality and knowing what people are going to enjoy and appreciate. And that's a better experience. So that's where the training comes in.

(37:35 - 37:40)

Let me add one more thing. Most restaurants have very delineated positions. Okay.

(37:40 - 37:54)

The host answers the phone, greets people at the door, walks them to the table, gives them the menu, right? Bussers clear the tables and reset the tables and all that kind of stuff. And we know what servers and bartenders do. In my restaurants, everyone was a salesperson.

(37:54 - 38:26)

Everyone was trained in product and restaurant knowledge. Everyone was quizzed and anybody, this was a training ground so that they can move up to become servers and bartenders. But wasn't it amazing when the server for a table is in the kitchen getting someone else's food and this table, the busser notices the lady's glass of wine is empty and is so knowledgeable that he or she can ask that lady, did you enjoy that glass of wine? Would you like me to get you another? Can I make another suggestion? And no, the wine list, we train them in this.

(38:26 - 38:39)

And isn't it amazing that that person could take an order, go to the point of sales system, order the glass of wine, get it from the bar and deliver it to the table while the server is still in the kitchen. That's like choreographed service. Anybody could do that.

(38:39 - 38:46)

Anyone was making suggestions to enhance the guest's experience. And that's what made us different. That's a beautiful experience.

(38:46 - 38:53)

Every time when I see that, Roger, I don't see that too often, but I don't either. But that's training. That's where the training comes in.

(38:53 - 39:01)

You know, a hundred percent. One place that comes to mind with that. It's the, that they have this system is they come to mind just popular chains where Houston's the only place that I've seen.

(39:01 - 39:07)

It's like everybody's trained. They just kind of flow through the floor and it doesn't matter who it is. They're bringing your food.

(39:07 - 39:10)

They're talking to you. Their knowledge about everything. And you're like, wow.

(39:10 - 39:13)

It's a better experience. Yep. Yeah, absolutely.

(39:13 - 39:20)

And that's what you're talking about. So Roger, tell me a little bit about nightcap. There's, you have a digital training application to help restaurant owners with these types of things.

(39:21 - 39:39)

Yeah, that's brand new and that's a partnership. Well, I should say it's about a year and a half old, but it's been mostly development, but it is a hospitality training application, a digital app that is customized to a restaurant's menus. And it trains people in salesmanship and product knowledge and skills.

(39:39 - 39:58)

And it's loaded with video training and it's loaded with skills to up level the hospitality experience in restaurants and resorts and hotels and bars and clubs. And it's called nightcap. And the website for that is nightcap.com N I T E C A P P because app is at the end of nightcap.

(39:59 - 40:10)

So yeah, it's at nightcap.com, but yeah, we've been working on that for about a year and a half and yeah, that's being tested in hotels literally around the world right now. And we're launching it in restaurants as well. Restaurants and bars right now.

(40:10 - 40:15)

Very cool. So Roger, let's make a switch here really quickly to marketing. I know you're also big on marketing.

(40:15 - 40:20)

We're talking about marketing and it's part of the restaurant systems also. Like everything needs to be working together. Absolutely.

(40:20 - 40:47)

What are some of the biggest mistakes you see restaurant owners making when it comes to marketing? Throwing money at things that are experiments versus knowing that I can actually track this. If I spend $10 on this, what's the return on investment? And that's just a random number, but you get the idea. And one of the biggest challenges or pet peeves I think I had as a restaurant owner is this is one business where people just walk in the back door with no appointment into the kitchen.

(40:47 - 40:58)

Oh, can I see the owner of the manager? Blah, blah, blah. And you're in the middle of whatever you're in the middle of, and people just, or the phone rings off the hook all day. And if you happen to answer it, someone's trying to sell you something.

(40:58 - 41:15)

And most of the time it's something we think we don't need, oh, I got this, whatever, because we're in the middle of service or we're in the middle of doing what we're doing. But every now and again, somebody says something intriguing, like, oh, if I put you on the radio, everyone driving to work is going to hear about Joe's restaurant. And they're going to come.

(41:15 - 41:17)

Yeah. Blah, blah, blah. Gee, that's interesting.

(41:17 - 41:30)

Really? And you give it a listen and you think about it and then we'll custom create a commercial for you and blah, blah, blah. And you pay them a lot of money. And then you wait for people to walk in the door and say, Hey, I heard you on the radio, but no one ever says that.

(41:30 - 41:46)

And you'll never find out if it's actually working. That's an example of a non trackable marketing idea. Something that sounds good on paper or in your mind, but then you really don't know if it's working and you keep throwing money at something because consistency with marketing is very important.

(41:47 - 41:59)

Frequency and consistency of message. I mean, that's brand building or positioning one-on-one, but yeah, if you can't track it, chances are you're not going to make money off of it. So I'm a big believer in finding things that are trackable.

(41:59 - 42:05)

Yeah, a hundred percent. It's been our experience as well, Roger. You know, that's what we do, but it's having the systems in place where you're able to track those things.

(42:06 - 42:21)

I think that's super important. Like you teach, there's some stuff that you can't, you know, just because of the nature of the restaurant. But that brings me to my next question about technology, right? You know, there's more tech available now for restaurants than ever, right? And that operations for marketing, whatever it is.

(42:21 - 42:38)

And now it's becoming more integrated from your perspective. How can restaurant owners embrace this tech and not get lost in the shiny object syndrome of like, okay, this is good and they don't even know what to implement? There is, and there's new tech being delivered every single day. And again, people are calling on the phone and trying to sell you their latest tech.

(42:38 - 42:48)

Some of the most popular things, first of all, let's start with point of sale systems. Everyone needs a good point of sale system. Hopefully it's integrated with online ordering because since the pandemic, that's absolutely essential.

(42:49 - 43:37)

Some restaurants are finding scheduling programs really, really helpful. There's marketing systems, but my benchmark is, does it enhance the guest experience either in convenience or in hospitality or guest service, or does it take away from it? And I don't want to slam any particular technology, but we see a lot of things that are trying to replace the human element with labor because they've recognized that there's sort of a labor challenge out there. So what can we do to reduce the labor? We see these robots flying around on the floor and all this kind of stuff, whatever it is, does it enhance the guest experience? Does it make them feel special, unique? There always should be a human personal touch that sets your place apart because people still appreciate that people go out to restaurants for a variety of reasons, but most often it's a special occasion and they want hospitality.

(43:37 - 43:44)

They don't just want a good meal. They want an experience. So I believe you should vet these things.

(43:44 - 44:07)

Take a look, get testimonials, talk to other restaurants that are using it. If you think it's going to uplevel your service, your efficiency, your hospitality, it's worth taking a look at. But you can spend a fortune on all kinds of tech that just like non-trackable marketing, did it work? Was it an experiment or does it really add value to my business? Does it add to the bottom line in some way? These are the things that I would look at first.

(44:07 - 44:19)

Right. A hundred percent. So Roger, as the industry evolves, where do you see the biggest opportunities for restaurant owners to innovate and grow as you see everything shifting? Yeah, growth is important.

(44:19 - 44:38)

You know, there are lots of restaurants that are just happy having one single location, but there's no economies of scale to that. Obviously, if you can grow your business, either other locations or franchising your business, that's a huge opportunity. Because again, I mentioned run a business, build a brand, don't run a restaurant.

(44:38 - 44:58)

If you're able to build a powerful brand, then you can expand that brand and you can get name recognition in different communities. Perhaps if you empower your people, create these entrepreneurs, these are some of the opportunities you can give to them so that they can run their own location. And then you can be the big picture guy, just making sure that all the pieces are still working.

(44:58 - 45:19)

But it's really about brand building and about growth, whether you choose to franchise or keep it independent. Those are the opportunities that are going to lower your turnover, increase your profits, pay you a better salary as well, and then get economies of scale with your suppliers. Because right now, one single restaurant doesn't have a lot of leverage with suppliers.

(45:19 - 45:29)

But when you got two, three, four locations, suddenly you can negotiate, you can get better prices on everything and then your margins go up. And really it's a numbers game. It's all about margins.

(45:30 - 45:41)

It's all about hospitality. It's all about developing your people. And if you put the leadership piece in place with the cost controls and profit maximization with trackable marketing, boom, there's your growth opportunity right there.

(45:41 - 45:44)

Now you get the system. That's right. Yeah, for sure.

(45:44 - 46:03)

Yeah. So Roger, for restaurant owners that are just starting out or struggling, what is one piece of advice that you offer to help them build a strong foundation to success? I mean, you've already covered a lot of the basics and a lot of the things in the systems. Anything else in particular that you would advise to the ones just starting out? Yeah, you got to keep learning.

(46:03 - 46:28)

I think the most obvious thing is before you jump into the business, which is one of the most challenging business I've ever been in, I would work for one first and try to learn as much as you can about what works, what doesn't work. But then we also talked about the Academy and the Academy is literally a crash course in starting your first restaurant as well. Aside from those systems, I already talked about those foundational systems.

(46:28 - 46:57)

We've got a logistics module that teaches every single thing, anything you can think of that you would need to know or do just to open the doors of that place. Everything from writing a business plan to raising capital, to negotiating a lease, to how to find the right location, the equipment you need, the insurances you need, the licenses you need, the policies and procedures manuals and working with people. Like it's there, like all those things and then how to grow that business.

(46:57 - 47:16)

And then that instantly leads to the cost control piece, the staff training piece, the marketing piece, and then there's efficiencies. So it's literally everything I've learned in 30 years in this business, either if you're starting a first place or you just need to increase profits and run a stronger business versus a restaurant. It's for all those people.

(47:16 - 47:25)

That's fantastic. Which I wish I would have had my hands on your trainings when I was starting out, I would have probably messed up a little bit less. Or I read a lot of books.

(47:25 - 47:31)

That was the old school way for me. When I was starting a restaurant, I read books. When I was starting a bar, I read books.

(47:31 - 47:39)

And now it's like, you don't want to reinvent the wheel. You just want to learn those basics that'll really give you the best chances for success. And that's why we created the Academy.

(47:40 - 47:47)

I had that huge restaurant management book. I don't know if you've seen it, but that's the book that I used. So this is way better.

(47:47 - 47:59)

What you offer is way better, Roger. Well, it's fun. It's video trainings, but you know what the best part about it is? I didn't mention yet, Sebastian, but this whole empowerment leadership piece and giving people initiative to take the next step.

(47:59 - 48:24)

The Academy allows you to literally assign any lesson in there to any employee, any number of employees to put an inventory, to learn how to put an inventory system in place and to calculate your food costs or put a marketing program in place that's trackable. And you can actually monitor their progress in your own personal dashboard and see how they're growing and what they've done and what they've accomplished. And it's all there.

(48:24 - 48:35)

So this is helping owners and general managers take that step back. Learn to trust people, give them an opportunity to move forward and see how well they do. And that's so empowering.

(48:36 - 48:40)

So that's a key feature as well. That's awesome. Roger, you've accomplished so much.

(48:40 - 48:57)

I mean, you've done a lot of things in your career. What's a daily habit or personal philosophy that has been your biggest driver for success? This is a challenging business and we all get stressed out at times and you got to keep your head on straight all the time. And I'm a big believer in outdoor recreation.

(48:57 - 49:13)

I get outside every single day and I either get on my mountain bike or I go skiing on the weekends or I've done so many things. I climb, I do all sorts of things, but your health is vitally important. So a good diet and getting some kind of exercise every day always cleared my head.

(49:13 - 49:27)

And it kind of takes the edge off the day. If you do something empowering or inspiring in the morning that makes you feel invigorated, then you go in there and it's like you want to set the world on fire. And your people can recognize that, your guests recognize that.

(49:27 - 49:34)

And I just think if you get into those healthy habits, it's going to help you run a stronger business. That's always worked for me. For sure, Roger.

(49:34 - 49:48)

Well, thank you so much, Roger. And so for the people that are looking to get in touch with you, of course, Restaurant Rockstars, I know you can find it everywhere, but if you could just tell us where we can find you and get in touch with you. Well, you know, I love communicating and talking shop with operators.

(49:48 - 50:12)

So if any of your listeners have a particular question, they can email me and my email is rogerrogeratrestaurantrockstars.com. If they're interested in the Academy, it's also at restaurantrockstars.com and it's just kind of an overview of everything that's included there, but that's how they can get in touch. I'm happy to answer questions or help people out. And I also do personal coaching as well.

(50:12 - 50:22)

So if any of these challenges that we talked about today are on your plate right now and you're looking for someone to help, I'm open to that. So get in touch with me. They can also get your book on Amazon, I'm assuming.

(50:23 - 50:26)

Yes, my book is Rock Your Restaurant. It's called Yep. It's on Amazon as well.

(50:27 - 50:31)

Awesome. Well, Roger, thank you so much again for being here. Thank you for all your insights.

(50:31 - 50:35)

Super insightful and helpful. I mean, it was for me. I've just learned a lot of things today.

(50:36 - 50:45)

And then I know that our listeners hopefully they've learned a few things and of course they know how to reach out to you. So again, thank you so much for being here. Thanks so much for hosting and for inviting me, Sebastian.

(50:45 - 50:49)

It's a pleasure speaking to your audience and getting to know you better. So thanks for that. Thanks so much.

(50:49 - 50:51)

All right. Take care, Roger. Stay well.

(50:51 - 50:52)

Thank you.