Save Money and Time by Outsourcing
Outsourcing allows operators to focus on managing their restaurants.
By Kevin Moll, Guest Columnist -- Chain Leader, 11/10/2008 12:00:00 AM
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| Kevin Moll, CEO of Denver-based National Restaurant Consultants, Inc., says outsourcing is a cost-effective solution that frees up operators to focus on managing and expanding their companies. |
Today, as our world seems to get smaller through computer technology and instantaneous communication, the option to outsource a wide variety of services is easier than ever before. In fact, there are very few restaurant operators today that don't outsource. It's a cost-effective solution that frees up operators to focus on managing and expanding their companies. Here are five functions chains should consider outsourcing.
1. Equipment repair, preventive maintenance and facilities cleaning.
Keep your equipment in top-notch condition and properly maintained by professionals without having to staff this talent in house. It's less expensive to properly maintain equipment than to repair it.
Keep your restaurants in spotless condition by hiring an experienced cleaning service. Regardless of whether you have five or 50 restaurants, this service moves the responsibility for basic cleaning from your expensive hourly staff to a low-cost service with the same results.
2. Legal services including franchise development and sales.
For small chain operators, legal and franchising (development and sales) are some of the most frequently outsourced services. As you grow, your dependence on a more comprehensive legal department will grow. But while you're small, outsourcing these services makes a lot of sense. When you start spending upwards of $100,000 a year, you will probably bring the legal and franchising departments in house. Until then, outsource it.
3. Accounting and payroll services.
Accounting and payroll tracking, computation, processing and management are some of the most frequently outsourced areas. Most restaurateurs outsource their accounting and payroll functions when they're still one-unit firms. Very few operators handle the technicalities of accounting and payroll when their time is better spent managing the company.
4. Laundry services (uniforms, napkins, tablecloths).
Very few chain operators are equipped to handle their own laundry and for good reason: It's just too expensive and the results of doing your own laundry in house are frequently less than stellar. Engaging a national linen service is expensive, but when the finished product is in the hands of your guests, literally, this outsourcing decision is easy to make.
5. Culinary services--use vocational schools and co-op programs.
Depending on your locations, the state and local legal restrictions, and your ability to manage talent, the outsourcing of culinary labor can be one of the biggest labor saving moves you can make. Vocational schools need to provide their students with practical, hands-on experience in a real-world situation. Although this outsourcing approach is innovative to a point where it might even be considered insourcing, you'll want to make sure it meets with the approval of the local government, your insurance company, and others that are involved such as the Department of Labor. Structuring this type of relationship takes a lot of work, but the net savings can be amazing.
There are easily 10 or more additional areas in your business where outsourcing may make practical sense. As a consulting firm, our services are frequently engaged in an outsourced manner. Our clients find that it's faster and easier to outsource than to do it themselves. Is it time for a menu update? Need a feasibility study or business plan for those new locations? These are simple examples of how outsourcing your needs will frequently result in faster results with less cost.
Kevin Moll is the CEO of Denver-based National Restaurant Consultants, Inc. and a frequently published author with 35 years of hospitality leadership experience. The firm's consulting services are available worldwide for projects of all sizes. Call 303-757-FOOD (3663) or 1-800-961-6005, visit http://www.nationalrestaurantconsultants.com, or e-mailkevin@nationalrestaurantconsultants.com.
Check out what functions restaurant operators outsource. Read "Helping Hand."
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How to Outsource Is outsourcing applicable for your business? The easiest way to take the first step is to select a minor service to outsource such as a knife-sharpening service. The steps are pretty simple for this, but you'll get the gist: Step 1. Identify what your needs really are. Do you need a service to provide you with knives on a rental basis, or do you just need your own sharpener? Analyze how you would benefit from having this service outsourced. Step 2. If it makes financial sense to outsource, ask three companies to stop by your establishment and provide you with a price quote. Step 3. When the representative stops by, ask for a written quote that specifies the following: What exact services are provided, the unit cost per knife and any guarantees, along with the service schedule. Lastly, look at the total cost. Does it make logical sense, based on your analysis in Step 1? Step 4. Repeat Step 3 with two more companies. Step 5. Once all bids are in, compare the features, advantages and benefits of each one. Step 6. Inform the appropriate staff members that you have enlisted a knife-sharpening service and give them the information they'll need to make sure that the first service call is successful. Step 7. Every month or so, audit the invoices to ensure that you are charged the price that you were originally quoted. If you're improperly charged, address this with the sales rep immediately and get a refund on the amount you've overpaid. If the company won't adjust the charges, it's time to seek another company. In some cases, such as linen and staffing services, the scenarios become a bit more complex, but the structure of outsourcing is still the same. Clearly outline the program goals, specific needs, timelines, budget requirement and terms of the contractor relationship. We are fond of saying, "A good agreement makes for a good working relationship," and you'll find this to be the case in your outsourcing programs as well. |
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And don't forget to look at outsourcing internal food safety, physical safety and quality assurance audit services to 3rd parties as well. We've been able to demonstrate multi-million dollar savings to many of clinets (the leading restaurant and hospitality chains) by utilizing our national team of trained and calibrated food safety professionals to perform their internal food safety and brand standards audits/training.
Michael Schmit - 2008-21-11 13:46:00 MST -
By Outsourcing services such as website designing, flash, CMS development, internet Advertising, multimedia, graphic design, web site maintenance, SEO, to professional and experienced IT outsourcing organizations can help any website to get a better visibility vertically as well as horizontally.
tinasilvee - 2008-10-11 23:02:00 MST -
Great article. I also recommend "The Black Book of Outsourcing" by Brown & Wilson (Wiley Publishers) which just came out with a new 2009 edition. They also have alot of free reports including one for our industry at www.theblackbookofoutsourcing.com I am sure it will be a great asset to helping you understand how what and when to outsource.
Mark Judge - 2008-10-11 19:29:00 MST
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