What New Restaurant Owners Need To Understand About Investing In Human Capital
by Andrew Parr
Doris Yuen and Ken Wan are the young, vibrant, and passionate owners and operators of Meta Asian Kitchen in Avanti Food & Beverage. Just like you, they got into the restaurant business to fulfill a sense of purpose, in their case through Chinese cuisine – authentic to their family recipes. To obtain a sense of security through financial freedom. To expand their sense of self through their Hong Kong heritage. They are now on a mission to fulfill their sense of place by searching for the proper location for a brick and mortar restaurant location extension to their brand and to understand their sense of time – when is the right time to open. All of this will create the ultimate gift that a food and beverage business give – a sense of belonging for everyone involved; Doris & Ken, their employees, and the community they serve.
We worked with these promising upstarts on what it takes for opening a new restaurant in Denver. Read this article and then find some links to follow their entire journey.
The overwhelming problem they face is that the “restaurant industry standards” don’t leave enough money to pay their employees not only a livable wage, but what their actual value is. We all know the supposed proper labor percentages of 12% BOH labor, 8% FOH labor, 10% management labor. What does that actually mean? Why are we even trying to get there? This doesn’t even contemplate the difference between operational labor (what you pay people either hourly or salaried) and fully burdened labor (payroll + payroll taxes + benefits). This is the root cause of two more obvious problems: the inability to make payroll and high turnover due to low wages (and an overall lack of investment in the four restaurant employee pillars of Wages, Benefits, Culture, Education). This can make any restaurant owner feel like they are drowning. It’s just wrong that by reaching all of these arbitrary industry standards you still can’t attain success!
We understand what it is like to be stuck in scarcity mentality, and how hard it is to shift your mindset to abundance mentality. Experts like Carrie Luxem of Restaurant HR Group and Jordan Boesch of 7shifts are here to help. They assisted our team at Best Served to coach Doris and Ken. They do a lot of the heavy lifting from providing 5 HR systems every restaurant should focus on improving and the employee life cycle to actual applications that ease the burden for scheduling and turnover. Turnover that costs about $6,000 per line level employee and $14,000 per manager. That’s each restaurant employee or restaurant manager you turnover.
How do you get out from underneath all of this? You utilize Carrie’s 5 HR elements; you follow Jordan to gain efficiency from the 7shifts app and the engage tool. You invest in your most valuable asset - your people. How can you get comfortable with all of this? We have your back. Don’t become another statistic – part of the 73% restaurant industry turnover rate and 60% failure rate in the first 12 months of operations. Follow a map that will lead you to 75% employee retention and satisfaction. By letting us guide you through the work, you will transform from overwhelmed and undervalued to a pillar of culture and commerce in your community.
As you begin to shift your mindset to invest in your most valuable resource, we have compiled links to research and resources for you to dig into, to be able to open your own new restaurant concept. Or you can contact us, and we will walk you through it all, breaking the numbers down for you into bite size pieces. Sign Up here to answer “6 Questions To Unlock Your Concept” as well as receive free content, and opportunities for more info, insights, and inspiration.
Learn more by watching the whole series of Best Served New: Meta Asian Kitchen and the episode focused on investing in people.
Episode 6 Investing in Your Most Valuable Asset Your People
Carrie Luxem’s Links:
Recruiting & Interviewing
Why Honesty is The Best Recruitment Strategy When Hiring New Employees
5 Critical Tips For Recruiting Top Talent | My Advice For Employee Recruiting & Selection
Don’t Make This Mistake When Conducting Job Interviews | Recruiting Employees
Onboarding & Training
Onboarding New Employees: How To Orient New Employees For Better Staff Retention
Compliance
How To Comply With I-9 And Why It Matters Now More Than Ever
Safety
Restaurant Robbery Safety Plan
Termination
Tip To Properly Terminate Employees
Jordan Boesch’s Links:
Andrew Parr is Best Served Creative’s “Herald of How,” AKA Chief How Officer. Understanding why we do what we do and who we serve, Andrew digs into the nuts and bolts of how we get it done. He craves one-on-one interactions and thrives with the written word. The ability to contribute to our Read channel by penning articles covering a variety of subject matter and running down rabbit holes for research quenches his desire to learn.
Andrew has over 25 years of restaurant and hospitality industry experience and his education includes a BA in Psychology and History from the University of Wisconsin along with a JD from Mitchell Hamline School of Law. Andrew was born and raised in Milwaukee, WI, and currently resides in Denver with his wife Jody and their dog Cooper.
