Website design By BotEap.comYou don’t have to see Kitchen Nightmares to know that opening a restaurant can be risky. Depending on the source, between 50 and 90 percent of them fail in the first five years. What is rarely discussed, however, is why these companies fail. Probably the number one reason is the inexperience of the new owners. As we know?

Website design By BotEap.comMost successful homeowners had their fair share of failures in the early days. Even the great Gordon Ramsay (host of Kitchen Nightmares) had to close several of his fancy restaurants. Now, his establishments are very successful. Why? In addition to his culinary experience, Mr. Ramsay had to learn to manage costs, which is probably the biggest advantage he has over the new owners.

Website design By BotEap.comStarting

Website design By BotEap.comWhen examining the autopsy of any restaurant, the cause of death always says, “We ran out of money.” The only way to avoid this unworthy end is to keep costs under control. Payroll is often the biggest expense for restaurants, so knowing what to pay and when is important.

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Website design By BotEap.comAs a group, food workers are some of the lowest paid employees around. They are also a very large group, which means that governments pay attention to them. As a result, both state and federal laws require that all food establishments pay their workers a minimum wage. Failure to do so will not only result in heavy fines and penalties, but can also irreparably damage a restaurant’s reputation.

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Website design By BotEap.comWhether serving customers at tables or counters, tips always belong to the employee. Bosses cannot collect them for their own benefits or redistribute them. In some establishments, waiters can pool their tips so that everyone receives a living wage. This practice is completely voluntary and should not be monitored or controlled by the owner.

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Website design By BotEap.comOne of the most common mistakes new owners make is paying too much overtime. Under federal law, all hourly workers must be paid time and a half for every minute they work more than 40 hours in a week. These costs can really add up to new under-staffed and overbooked restaurants. The good news is that they can be completely prevented. Reducing and even eliminating overtime pay can be achieved with proper planning. To do this, you must make a work schedule each week and have selected employees who can replace scheduled staff members in case someone calls in sick.

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Website design By BotEap.comMany restaurant owners mistakenly assume that they can get away with paying younger workers less. In many cases, these first-time employees do not know the minimum wage and their bosses do not inform them of their rights. Because they believe it is exploitation, state and federal governments do not look favorably on this common practice. To avoid fines and public embarrassment, it is important to pay all of your employees fairly, regardless of their age.

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Website design By BotEap.comBecause English proficiency is rarely a prerequisite, the food industry has always attracted a disproportionate number of undocumented workers. That said, all restaurant owners face hefty fines if they are caught hiring ineligible workers. We should also mention that all employees, regardless of the language they speak, must receive the minimum wage.

Website design By BotEap.comSimple as they are, following these rules can help you control costs, giving your restaurant a much better chance of success.

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