I believe preparing to win is the only real way to win. Luck is simply a function of hard work and preparation. In last month’s article in the “Growing Pains” series, I outlined the critical must-haves for preparing to expand to a second store. As I explained, you must first know that your current store can run day to day without you. You must honestly and accurately assess the popularity and profitability of your first store and develop a marketing plan and a written business plan. And, most importantly, you must have systems and processes in place to be able to successfully duplicate the success of your first store. These systems and processes will be the focus of this month’s article, and when you are finished reading it, you will definitely have your work cut out for you!
Yes, systems and processes are boring—no doubt about it, especially for a big-picture, type-A personality like me. But I know that my business could never survive without them. I used to feel like they were just buzzwords or a necessary evil. Now I rely on them—they form the backbone of my company, and they support all 36 Romeo’s Pizza stores.
Creating an Operations Manual
When I first bought Romeo’s, I asked pizza consultant Big Dave Ostrander to come to my humble store and help me understand what I needed to do to expand the operation. He immediately asked if I had an operations manual. “What do I need a manual for?” I replied. “I know how to do everything here, and I have trained my managers in the way I want it done.”
Big Dave looked at me and said some very profound words. “If you want to expand and grow,” he said, “you have to create a system that runs your business and then teach people to run the system.” And that starts with an operations manual.
Essentially, your operations manual documents everything that you do and the way you want it done. Writing it is a time-intensive task, but it is absolutely necessary to successfully duplicate your restaurant. With an operations manual, you lay down the rules for the all-important systems and processes you will need to succeed and grow. And remember, it’s a living, breathing document. It is constantly changing, evolving and improving. I now realize that I have never stopped writing mine. And it has allowed me to duplicate the success of my restaurant many times!
Every pizzeria’s operations manual should include certain key chapters, including:
1: Food Prep
At Romeo’s, we actually have an entirely separate manual just for food prep. Whether you choose to go that route or include food prep in your operations manual, it needs to be comprehensive. Every recipe, every menu item and every food preparation technique needs to be documented. Our manual includes pictures and even some video links using QR codes; employees love being able to use their phones to scan the QR codes, which are linked to training videos on our website. Hence, they can watch the videos right there on their phones.
Your food prep manual needs to be accessible to all employees in the store. Staff members should be able to look up recipes and verify they are making menu items correctly. Additionally, the food prep manual (or the food prep section of your operations manual) must be protected and kept track of by the staff and management on every shift. It wouldn’t be the end of the world if this information got stolen, but it is very important to protect your intellectual property.
Romeo’s Pizza provides every kitchen employee with a detailed and comprehensive food prep manual to ensure consistency at all locations.
2: Personnel Issues
The next chapter of your operations manual should be all about systems and processes relating to people. An employee manual is crucial to hiring the right people and keeping them accountable for their actions. What are the rules? What is your dress code? How do workers request days off, and how do you handle call-outs? All of this needs to be documented, and every employee should sign a document stating that he or she has read and understood the material.
This section of the manual should also cover social media policies, injured worker policies, in-store relationships and customer complaint policies. By establishing these rules at the beginning, they become the expected behavior, and employees will embrace them.
3: Customer Relations
The third part of your operations manual should focus on customers. How do you want your phones answered? How long is an acceptable pickup or delivery time? What are the remedies if a customer complains or an order is filled incorrectly? Every situation involving a customer needs to be addressed. This will also become a marketing rulebook for all of your stores as you move forward.
You need to walk through your pizzeria in your mind as a customer 10,000 times. Imagine how you want that entire interaction to go. What do you want them to see or not see? What do you want them to hear, to smell or possibly to taste? How do you want your counter people or servers to treat a customer? Be very specific, and use this as your training guide for all new employees.
4: Ordering and Inventory Systems
At Romeo’s, we created an ordering system that automatically calculates what we need to order based on par levels. We also calculate and understand the food cost of every item on our menu to the penny. Using our POS system, we are able to calculate variances quickly per item to identify waste or theft. This is a vital system that needs to be a part of the operations manual.
5: Employee Scheduling System
This system, which can also be built into your POS system, needs to show a forecasted labor percentage versus a forecasted sales number. Each store manager will need to know how to schedule workers, how to add employees, and when to cut employees. You will need to communicate the expected level of labor dollars based on multiple sales forecasts. At Romeo’s, we created a labor grid that shows how many labor dollars each manager has to spend each week based on their forecasted sales. This system puts you in control of labor instead of forcing you to be reactive to labor needs. The grid has saved us millions of dollars, literally, in labor costs over the years.
Building a Management Team
Once you have completed this manual, you need to think about building your management team. If you plan on continuing to grow, consider hiring a district leader or district manager. With only two stores, that may seem too expensive, but this person can also serve in the restaurants as a manager while taking care of both stores. Your operation’s success will hinge on your managers’ ability to adhere strictly to the operations manual. You need a district leader to keep those managers accountable. That person also frees you up to focus on marketing and developing your brand.
An employee manual should lay out the rules for time off, handling customer complaints, dress codes, on-the-job injuries and related issues.
Knowing Your Own Role
As a multiunit owner, your job will begin to change and evolve. You will still be working in the business at times, but the majority of your time should be spent working on your business. You need to focus on building your brand, developing better systems and processes, and developing your management team. You will have to begin outsourcing some of the tasks that you have done yourself in the past. Instead of processing payroll, now you should be analyzing it. Instead of doing the bookkeeping, hire someone to do that so you can do local store marketing.
Someone once told me—and this was some of the best advice I’ve ever gotten—to step back and analyze what tasks I do best and prioritize them in terms of having the greatest financial impact. Then I should focus 80% of my time on those tasks only. Remember, you will never save your way to prosperity. True success and wealth building comes from growing your company in sales and profits. Now that you are a multiunit operator, you must realize that your time is more valuable than ever before. Are you spending that time or investing it? You can never get time back, so you need to use it for money trade as profitably as you can.
To expand your company, you must have a system in place that allows your employees to run the system while the system runs the business. Your job as a multiunit owner is to grow your brand, identify new sales opportunities, and constantly improve the systems you have created. This is truly the path to multiunit success. Get to work on your operations manual and build the systems and processes that will make it happen!