Restaurant management software market size value was $3.6 billion in 2020. That number is expected to reach around $7 billion in 2025. These stats by Grand View Research show that the industry is growing as more and more restaurants feel the need to invest in similar solutions. Here are the 6 top benefits that we think any restaurant would like to experience:
Why your restaurant needs a restaurant management software (and how to choose one)
All you need to know about restaurant management software to run your own restaurant.
Ira Jain, Customer Success Manager, EagleOwl
May 3, 2021 | 10 min read
Are you still using Excel sheets or a simple POS system to record your orders and calculate revenue? Did you start noticing gaps in your restaurant management process and think you can improve the margins without selling more? Whether you are choosing a restaurant management software for the first time or looking for a different solution, we recommend you to read our post till the end.
This guide will be useful for any type of cafe or restaurant who wants to bring clarity and effectiveness to their management process - from pubs to breweries, and from cloud kitchens to multi-chain brands.
What is a restaurant management software?
An RMS (restaurant management system) is a unified platform that helps organize and manage all the back-end operations of a cafe or restaurant.
At the heart of every restaurant management software, there is a POS system (point of sale) that helps you enter orders and record payments. Depending on the solution, the RMS will also include menu engineering, inventory management, reservation management, data analytics, etc. EagleOwl is equipped with these and more features that are essential for the daily operations of any restaurant.
“An eagle will look from a bird-eye view at the macro and micro level of work, and owl means it’s monitoring at any point of time. The name and the product has got a great significance.”
Seemanta Baruah, Chef at The Bier Library, Bengaluru
Why do restaurants need a Restaurant Management software?
1. Access your system anytime, from anywhere
Compared to on-premise solutions, a cloud restaurant management software is available as long as you have access to the internet. You don’t need to install anything on your computer. Whether you are on a vacation or working from home, you can track what’s happening in your restaurant - how much revenue you generate daily, weekly purchases, food cost, gross margin from top sellers, operational expenses and many more.
2. Avoid headaches that come with manual data entry
The use cases about errors that come with manual data entry are numerous. Sometimes the waiters misinterpret the handwritten orders. And it can result in food wastage and customer dissatisfaction.
Another important use case is to know which ingredients need to be ordered and how much. A handwritten list might again be misinterpreted, lost, and require redundant paperwork. When you have a restaurant management system, everything is managed from a single center and the human involvement is minimal.
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3. Save time and take your Excel tasks to the next level
A number of errors may occur when your team uses an Excel spreadsheet or a Google sheet to record purchases and transfers. Research shows that 88% of excel sheets have errors which could potentially get unnoticed and also lead you to take wrong decisions. The possibility of making a mistake is especially high when you are dealing with long lists of purchase orders and have to deal with tens of columns. With restaurant management software, you bring automation to your operations and can easily deal with as much data as you want.
4. Know what to order, when and how much
Every restaurant’s goal is to optimise the inventory levels, maintain good inventory turnover ratio, avoid stockouts, reduce overstocked items and avoid consequences that come with challenges, such as, missing ingredients, misplaced inventory leading to errors in stock-taking, expiry, emergency cash purchases and poor customer experience.
According to FoodPrint, the US restaurants alone generate an estimated 22-33 billion pounds of food waste each year. Besides, approximately 4-10% of raw materials purchased by restaurants is wasted before reaching the consumer. And one of the main reasons is inefficient inventory and supply chain management.
Consequently, if you follow the recommendations of your restaurant management system and better organize your procurement process, it will benefit not only your restaurant but the whole planet - by reducing emissions and saving our natural resources.
“EagleOwl has been very handy in dispatching our ingredients. As a result of using the tool and uploading all our menus and ingredients into this tool we have had approximately 30% saving in our ingredient cost.”
5. Grow happy customers
Not surprisingly, food quality is the number 1 factor for restaurant visitors that determines whether they will return or not. According to Finances Online, it was a priority for 50% of them. When the ordered food ingredients are available, the food is delivered without delay, and is fresh, that makes sure your customers will return and tell their friends about their positive experience.
A good restaurant management software will enable the ingredient availability and freshness at all times while giving the restaurant owner a good handle on purchasing costs. In addition, it will also help you increase your top-line revenue by making every stage of customer interaction seamless, starting from booking tables to receiving payments.
6. Improve your bottom line
Last but not the least, a restaurant management system should track all your recipes of menu items and provide insights into the profit margins of anything that is sold at your establishment. It should help you compare your actual procurement costs with estimated procurement costs based on the recipes entered by your chef and give you a detailed variance report that is actionable. RMS vendors like EagleOwl can improve your restaurant’s bottom-line by as much as 20% due to the optimization opportunities that the software offers. Reducing ingredient costs, avoiding food wastage, controlling portion sizes, accurately estimating the demand of your kitchen will reduce the unnecessary expenses and increase your net profit in the long run.
How to choose a restaurant management software that suits your needs
Before choosing any restaurant management software, there are certain things you should pay attention to. The initial research will require some time but will help you make a more informed decision and avoid inconveniences in the later stages.
Any Restaurant Management System will typically fall under one of the two types - RMS built around front-of-the-house technologies or RMS built around back-of-the-house.
For most part of the past couple of decades, POS was the only technology that any restaurant needed and RMS was synonymous with POS. It was sufficient to run a restaurant as long as you had a good billing software that could track your sales and process customer payments. As years went by, these vendors built additional modules around the POS to cater to the growing technology needs of modern restaurants. Oftentimes, these RMS platforms will have a great suite of features when it comes to the front-of-house needs of a restaurant but lack in the breadth of capabilities when it comes to the back-of-house problems. In other words, these suite of providers focus more on the top-line revenue growth of restaurants.
Both the types of RMS vendors are typically cloud enabled and run on any platform and are mobile optimized. A restaurant management software with a POS system at heart is sufficient if you are a small establishment with no plans to scale your number of outlets or no need of optimizing your profit margins. However, you would need a back-of-house optimized RMS for your restaurant if you are trying to set up a repetitive, scalable process to grow the number of outlets while maximizing your profit margins. Platforms like EagleOwl are built around digitizing backend operations and provide solutions for front-of-house needs of your restaurant as well.
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As the years have gone by, RMS vendors have worked on adding features to their platforms to cater to the increasing number of requirements of restaurateurs. There are multiple RMS choices available today, all with different sets of features for front of the house and/or back of the house optimization. Before choosing an RMS for your establishment, you need to evaluate the set of features required to optimize your operations - for example, if you have multiple sales outlets with a central kitchen and/or store, you may be doing a lot of internal productions/transfers and the RMS should be able to support your needs. Below are typical features that are available in most modern backend optimized RMS platforms.
A restaurant management software will allow you to upload and manage all your recipes.
With the EagleOwl recipe module, you have the option to have a look at the number of ingredients for each recipe, cost price, selling price, COGS per recipe on the same screen. You have the option to lock the recipes to prevent anyone from editing them and the option to disable/delete them in case of menu changes in the establishment. You can export the detailed recipes in Excel format. You also have access to the menu engineering for your outlet with just a click of a button.
You can also compare the actual COGS of your restaurant which is based on your purchases, stocktaking, transfers and production with the recipe generated COGS (expected COGS) and implement/modify processes based on analytics provided by the RMS to bridge the gap between the two.
Procurement management is equipped with subfeatures that help you understand your procurement progress - total purchases, total purchase value, pending and raised purchase orders, etc.
To bring manual entries to minimum and avoid errors, you have the option to import and export procurement data right from your device. Whether it is a manual entry or import, you get a unique system generated GRN number to keep a track of your bills.
You can also record all of your supplier information - email addresses, address, phone numbers, and other details. Purchase orders can be placed within EagleOwl and sent to the suppliers as emails directly from the platform.
You can create contracts with suppliers and lock prices for contracted SKUs to prevent having to input the purchase price each time whilst adding a bill.
EagleOwl allows you to generate automated reports based on 20+ criteria. From tracking sales by date to procurements by category, you instantly get access to any report. You can then download it as an Excel file and use it in your communications. You can also schedule reports and receive them directly in your mailbox to prevent having to generate them everytime.
You also have access to sales-related data in the sales module where you can not only view the daily sales, but also know about the best-selling menu items along with the sales percentage of each item. You can sort them as per total sales, number of units sold and contribution margin percentage. You can also export the same data in Excel format for your internal communications.
This is a core feature that determines the profitability of any restaurant. Restaurants typically over spend on their inventory - actual consumption is always more than expected. Worse yet, they don’t know why.
For example most owners reach the dead end when they ask the chef why an ingredient purchase was for a certain quantity. This is because of lack of data, particularly when it comes to reconciling sales to purchases using recipes.
With a strong recipe based inventory management in place, you can be armed with data, whether it is with the chef or store manager. You can see all your stock keeping units (SKUs) and other details about them - when it was last purchased, how many recipes it’s used in, its cost, price fluctuation, impact on gross margin, yield percentage etc.
You can keep a track of your live inventory and stock variances with the insights module. This is a very handy tool in keeping the high variance SKUs in check by monitoring purchase, transfer, actual and recipe based consumption, all in the same place.
You can add your store/outlet opening and closing stock, rather than having to maintain the same in Excel or in reams of paper. You can keep a track of your food wastages and menu trials on the platform.
Managing transfers between locations is a nightmare for most restaurants. This is typically done over WhatsApp or excel sheets. Also, in commissary models, you will have most semi-finished and finished goods made in a central kitchen, that gets transferred to other locations.
This feature is essential for restaurants with multiple locations/outlets. Imagine that one of your locations is running out of a certain ingredient/semi-finished product but you have plenty of it in another location. EagleOwl allows you to organize the transfer and save all the data securely - how much food was transferred, what’s the cost of transfer, line and quantity fill rates, etc. In a store based setup, you can also use the indent feature where the outlets/kitchen have to raise a requisition to the central store and the indents are approved from the store to create the transfer.
Table management helps to add all the areas/sections available in your restaurant and the number of covers. Once you get a new order from a table, the details are stored in your restaurant management system.
Besides, EagleOwl also shows you which areas and which tables are more profitable and where visitors tend to order more food and beverage.
Once a customer books a table, you can quickly check availability and make a reservation in your restaurant management software. Your employees and restaurant managers will have access to live information of booked tables, occupied tables, free tables, pax and more importantly who the customer is, how many times he/she visited, which table or location he/she prefers, etc.
CRM data is highly customisable in EagleOwl. For example you can record address, location, company they work for, age, etc. These fields can be added by the users based on their need.
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EagleOwl stores all your order data in the system. You can track how many orders you registered, at what table, etc. Once you click on an individual order, it also shows you the menu items, quantity, unit and total price, taxes, payment method, order status, etc.
Staff scheduling helps restaurant owners organize the working days/hours for employees and make sure there’s enough staff to serve the customers.
Some restaurant management systems have this feature available but in most cases you need to subscribe to additional software specifically for staff scheduling. It’s mainly a must-have for big restaurants that have hundreds of employees and multiple locations.
Features designed for marketing may vary from integrating your restaurant management software with your email/SMS marketing software to creating a loyalty program for your customers.
The flexibility depends on what other channel you use to connect with your audience and how you want to further your relations with them. This feature again might be available directly in your restaurant management system or require you to subscribe to a third-party solution.
Pricing is always an important consideration when buying any type of technology investment - are you paying a recurring fee or a one time fee? If recurring, how often will you have to pay - monthly, quarterly or annually? Starting price of platforms like EagleOwl is typically $100-200 a month per location, and you can request a refund if you don’t love the product. Many vendors offer a free trial but we recommend going with vendors who provide a paid pilot and stand behind their product until you derive the intended value of the RMS implementation. And one more final consideration - how many referenceable clients does the vendor have and how happy are the current customers? Solutions like EagleOwl have had a 100% customer retention rate in the last 12 months and such data says enough about how you are going to feel once you onboard such software.
Many tools in the market require you to watch how-to videos, read setup guides, user manuals, and other materials. That’s too time consuming for any busy manager who also needs to train the team about the nuances of the software.
Solutions like EagleOwl have an interface that is very intuitive and you don’t have to watch long tutorials to understand how everything works.
“EagleOwl meets all our requirements. It has a very simple and easy to use interface, is very intuitive, and the flow is very easy to understand.”
Maintenance and support of any software is a critical consideration. Most SaaS companies have a support structure that is self-service with no hands on support both while in implementation and onboarding, or during normal operations. EagleOwl team is available via email, phone, FreshChat and social media (LinkedIn, Facebook, Twitter). They answer customer queries from 10 am to 7 pm on weekdays and Saturdays but are available at any time if your issue is urgent. A video call via Google Meet or Zoom and your issue will be resolved in minutes.
A restaurant management system is a centralized tool for cafes and restaurants of different sizes - from ones with physical locations to cloud kitchens .
The advantages of using a similar solution include but are not limited to
1. Saving on purchase costs and maximizing your profits
2. Making use of data that will help you make educated decisions.
3. Optimizing your inventory.
4. Bringing manual data entry to minimum and avoiding costly mistakes.
5. Gathering all your restaurant operations under one roof and managing from a single location.
Be patient when choosing your restaurant management software because you’d like to compare at least a few solutions before committing.
Consider the solution’s features and pricing, analyze your needs and budget, and make sure the platform already has real and satisfied customers.
Ira Jain, Customer Success Manager, EagleOwl
Ira Jain, CSM, EagleOwl
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