New restaurant ups and downs


When opening a new restaurant, business can be unstable and servers might end up working for low tips for a while. What is the best way to manage this situation so you don’t end up losing your staff in the beginning?

– Restaurant Manager, New York, NY


First, keep in mind that if tips are so low that servers would earn below minimum wage, it is the restaurant’s obligation to make up the difference between the tipped minimum wage and the minimum wage in your state.

Next, consider that among many servers there is a “grass is always greener” mentality. One server bragging about the few hundred dollars in their pocket after an unusually busy Saturday night at a competitor’s restaurant may get staff moving around, sometimes in a good career move and often not.

With new restaurants, the instability can go either way. Guests may flock to a new restaurant to try it out and a good review shortly after opening can keep you booked for months. On the other hand, a new operation may need time to build a clientele.

I have a few suggestions for keeping servers loyal during this transitional time. First, the obvious is to pay them well. That may not be feasible given the cash flow struggles of a new restaurant, but you may want to think about decent wages as a start-up cost to get you through the opening period. Beyond wages, focus on recruiting servers who share your vision and would be proud to serve on the team. Take advantage of your slower period to focus on training newer, hungry servers into your way of operating rather than recruiting only experienced servers, whose bad habits and impatience with a slow operation may be ingrained. Build longevity bonuses into your rewards. These could go beyond financial rewards, for example, by allowing senior servers preferential schedules or sections. If using sales games and targets, offer big rewards for longer-term goals rather than focusing on sales per shift or per week. Consider offering an automatic raise or merit review following six months or one year of employment to entice people to stay longer.

Finally, communicate clearly to employees your expectations for your sales and their potential earnings. If employees sense your confidence in the growth of the business and can track their earning progress, they may be happy to join you for the ride.

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