A New Restaurant

If you’re not currently keeping production records, you really need to start.  Once they are in place, and you start to build a history of what sells and what is going to waste, you can really start to refine your operation.  Soon those pennies I wrote about the other day will start to add up in a big way.

The power in production records is that you don’t need to rely on your memory to know what did and didn’t sell well on any given day.  Want to know what the big seller was on the 4^th of July so you can make sure you have enough ready this year?  You could ask one of the cooks that were around last year to see if he remembers.  But what about the year before…or the year before that?  Was last year part of a trend, or was it a one time occurrence.  It’s hard to come up with that kind of detail when you’re relying on your own or someone else’s memory.

That’s where good record keeping is invaluable.  Now you will know with certainty what the big seller was last year, and what went to waste.  This year you can adjust your production so you can be sure to have enough of the things that have sold well historically, and cut back on preparing things that don’t sell as well.

By adjusting your production based on past trends you can maximize your sales potential while minimizing the amount of waste due to over-producing items that aren’t selling as well.  By studying your production records and comparing them to sales records you can know what is really selling and what is being snuck out the back door.  

You can also see trends developing early.  Now you are in a position to run specials or put new items on the menu that take advantage of those trends, and maybe even beat your competition to the punch.

There is a saying in business that says, “Take care of the pennies, and the dollars will take care of themselves.”  This adage is especially true in the restaurant world.

Most restaurants that fail don’t go under because of some catastrophic financial disaster, they fail because the owners and managers don’t take care of the pennies.  It is the daily waste that may not seem like much when taken by itself, but when combined with other “little” money wasters on a daily basis, it eats away at the bottom line.

Back in my line-cook days I saw my fair share of wasteful practices.  It was the grill cook that always seemed to make one too many burgers every day (”I guess I’ll just have to eat that one.”), or the server that put a little extra whipped cream on the sundae, or the bartender that gave a little extra splash to the regulars, or the prep cook that over portioned the cheese on the salads.  Each one of these taken by themselves aren’t significant costs, but when you look at what each person in your operation is doing, and multiply that every day, it makes up a huge amount of money that your staff is giving away.

For most operations, reducing food cost by just 1% is not that difficult.  It just takes a little more diligence in watching for waste.  While 1% may not seem like much, if you restaurant is doing $500,000 in sales, that 1% represents a $5,000 savings.  That’s pure profit.  I don’t know about you, but I wouldn’t turn down an extra $5k every year.

Take care of your pennies.  They really do add up.

At it’s core, being successful in the Restaurant and Food Service Industry is very simple: Have income that is greater than your expenses.  If you aren’t making enough money, you need to either increase your income, decrease your expenses, or both.

Sounds simple, doesn’t it?  But like so many things in life, the devil is in the details.

Increase Your Income

Ideally, everything you are doing is moving you toward this goal.  The more money you have going into your cash register, the happier your business life will be.  Having a good cash flow makes keeping your busness healthy so much easier.  Everything from property upkeep and upgrades, to hiring a quality stall relies on your ability to have enough income.

There are basically two ways to increase your income: increase the number of guests to your restaurant, and increasing the amount that each guest spends.

Getting more customers requires you giving the guests a reason to come.  It’s marketing and advertising, and running specials that will get people through the doors.  It is also necessary to do the things that keep your existing customers coming back repeatedly.

Building check averages is about a lot more than just increasing prices. In fact, many times a price increase will result in a decrease in income because some of your customers will leave for less expensive options.  On easy way to increase your check averrages is to teach your servers how to suggest appetizers and desserts to your customers.

Decrease Expenses

The two biggest areas of expense are food and labor.  Learn to control these expenses and you are almost guaranteed to succeed.

Controlling food costs requires keeping a close watch on your inventory to make sure your food is not being wasted, allowed to go out of date, or being stolen.  You also need to learn how to properly cost your recipes so you are sure to charge enough for your meals to be profitable.

Look for more information in the coming days as I start getting into the nuts and bolts of how to control you costs.