Recently our Co-Founder and CEO, Andy Schwartz, spoke to 7shifts’ CEO, Jordan Boesch, about how restaurants can use technology for better performance through the pandemic and beyond in How to Cut Costs Without Cutting Corners, a webinar for restaurant owners and operators.

Listen to their hour-long conversation below, or continue scrolling for key takeaways from the event!

Focus on technology that cuts costs rather than drives revenue

Schwartz put it bluntly: “There’s tech [for restaurants] that focuses on revenue production, and tech that focuses on cost-cutting. 7shifts and xtraCHEF both focus on that latter, back of house piece. When times get tough, there are areas of your business you can leverage tech to bring margin up.

As we wrote for 86 Repairs, there are two levers that restaurant operators can pull for more control: food costs and labor costs. xtraCHEF focuses on getting more insight into restaurant food costs, where 7shifts offers more transparency and ease in restaurant scheduling. Both are incredibly helpful ways for operators to save money when driving more revenue through sales just isn’t an option.

“Sometimes, just focusing on driving revenue is masking problems,” Boesch added.

The baseline functionality that all restaurant tech should have

The CEOs agreed that, although restaurant tech is nothing new, the solutions are finally meeting the needs of more restaurant operators. Cloud-based restaurant software is much easier—and less expensive—to implement, making tech more widely accessible to individual restaurants or small groups.

Schwartz said, “In 2020, there are plugin solutions that should work for operators immediately. It can be as low as a few dollars a month, works out of the box, and is made for their needs.”

But despite the evolution of this tech, there’s one major aspect of functionality that not all developers have considered: integrations.

“A perfect restaurant tech stack picks the best solutions for what you’re trying to solve and has them communicate seamlessly,” said Schwartz. “All of those technologies need to work with each other holistically without needing subsets of data.”

“Whenever you look at data and who owns that data, you should be able to push and pull that information to as many systems as you want,” he added.

The bottom line? “Make sure [your tech] solutions talk to each other, at minimum!” said Boesch.

Get granular in data with the help of tech

As we’ve written many times before, back of house processes in restaurants are tedious and time-consuming, riddled with errors from human data entry. Thanks to constant changes in ingredient prices and staffing needs, it was next to impossible to get accurate, real-time data for food and labor costs with legacy providers or pen and paper.

COVID-19 has forced restaurants to depend on tech for the cost-cutting measures they need for survival. Schwartz shared that xtraCHEF customers are leveraging the software in 3 key ways that have helped them stay afloat during the pandemic:

  1. Taking accounts payable anywhere. “The last thing you want is employees huddled up, printing, coding, scanning, and approving with pen and paper,” says Schwartz. xtraCHEF’s AP Management feature allows operators to manage invoices at home or in the free time, keeping them away from additional contact until they need to be at the restaurant for service.
  2. Automatic inventory, where recipes are mapped against purchase orders to gauge what should actually be ordered to reduce food waste (and therefore save money). Schwartz noted, “We’re in a day and age where you may not understand what future sales might look like, so on-hand inventory, with waste and spoilage, is even more important than before.”
  3. Dynamic recipe management in which plate costs are automatically calculated, and operators can see what their most profitable items are at a glance. Thanks to xtraCHEF’s drag-and-drop Recipe Management interface, it’s easy for operators to experiment with menu items that will create higher margins.

Boesch has seen a similar drive for more data-driven decision making among his customers. “Restaurants that are reopening are reconsidering how they’re analyzing labor as it relates to sales. The granularity they’re going to is much deeper,” he said.

“More folks are asking, ‘If I staff more people at this time, can I drive more revenue?’ Not a lot of people think about that,” Boesch adds. “I ask all operators: ‘If you lost $5,000 in food, would you care?’ Then I ask them, ‘What’s your turnover rate? You realize every time someone walks out the door is a $3,000-$5,000 loss, right?'”

He adds that 9 out of every 10 restaurant managers don’t conduct exit interviews, and therefore don’t know why they’re losing staff. “If we don’t retain them, how do we know how we can be better?” asks Boesch. “Savvy operators know theres a cost to hire and a cost to lose staff.”

Finding the right mindset for an uncertain future

“This is by far the most challenging time restaurants have faced. We have no way of knowing, from a sales perspective, what capacity will be. Challenges are upcoming with the cold, and even more is unknown going into 2021,” Schwartz said.

So after a year that’s already been trying for restaurant owners, how can they maintain focus and stay strong?

“The mindset should be ‘highly adaptable,'” according to Boesch. “You need to try new things and stick your neck out there. If you’re not adapting well right now, you’re going to be competing with a new type of restaurateur with a mindset where they come in with tools to outpace others when it comes to run operating efficiently.”

Schwartz agreed. “Industries that adopt and embrace technology become unique in ways that they weren’t before,” he said. “Restaurants now have the ability to touch more people.”

“I’m optimistic about the transition out of this world and into the tech that just helps restaurants run more efficiently,” said Boesch. “It’s a terrible time and people are suffering, but we’re going to get through it stronger than ever.”

If you want to run your restaurant more efficiently, try xtraCHEF’s free food cost management software: xtraCASH! You’ll be able to digitize, search, and store invoices; track prices, and get better procurement management at no cost. Request a demo to learn about everything that xtraCASH has to offer.