A New Restaurant

In a previous post I wrote about how to cost out your menus so you are meeting your food cost projections.  Knowing how to cost out a recipe will give you an idea about where to set the price of your menu items.  The problem is, this leaves out an important part of the equation: your customer.

Take a cheeseburger for example.  What is a cheeseburger on your menu worth?

There are a lot of possible answers here.  (more…)

Asking “How much does it cost to open a restaurant?” is like asking how much to buy a house, or to buy a car. While there are some guidelines to consider, the actual answer is determined by so many different factors, there is no way to set an accurate price that covers all different situations. Each restaurant is unique, and the price tag for each restaurant will be unique.

When you begin to examine how much it costs to open a restaurant you first need to have a very clear idea of (more…)

One of the warnings that new restaurant owners hear when they talk about opening their own restaurant is that it will require long hours in order to earn the mount of money you would earn in a 9 to 5 job.  Sadly, for many restaurant owners, that is very true.  Everything they own is tied up in their restaurant, and it consumes nearly all of their time.  You can see this in almost any community with independent restaurants.  They are surviving, but are they are not what you would consider restaurant success stories.
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For most restaurants, your year is really affected by the different seasons.  It’s how well you take advantage of the different seasons that determine whether your restaurant will be a success or a failure.  Restaurant owners that are successful realize that the money they earn at Christmas will have to get them through the remaining winter months.  Restaurant owners that fail to plan for the slower periods run out of cash, and end up with cash flow problems that could cost them their business.

While the seasonal slowdown is not good for the financial health of your restaurant, it does not have to be wasted time.  One of the big complaints in the restaurant business is that there isn’t enough time to do all of the things that need to be done.  during the sower season you can be doing things that you don’t have time to do when it’s busy that can contribute to your restaurants success. (more…)

One recurring problem I have seen in restaurants that are struggling is that they do not do a good job of labeling food items in storage.  Te biggest reason restaurants fail is that they don’t control their food costs.  That is a guaranteed kiss of death for a restaurant.  For many food service operations, food cost is the biggest expense they have.  So, if you let your food costs get out of control, all of your profits get eaten up.

A good way to keep track of your food is to use (more…)

One way to ensure that your kitchen staff is doing their part to help you control the food cost is to hold daily production meetings.  This is important in any food service operation, but it is especially important if you’re not using the exact same menu every day.  If your cooks aren’t aware how to prepare a daily menu, they may take it on themselves to just make something up regardless of what you had planned.  If they over portion, even by a little bit, your food cost starts to rise. (more…)

I’ve probable written dozens of times that if you want to run a successful restaurant, you need to control your food cost.  This isn’t an area that you can afford to take lightly.  Food cost and labor cost are the two biggest expenses on a restaurants budget.  If you let your food cost get out of control, your entire operation is at risk.

That being said, you need to have a clear understanding of what food cost is, and how to calculate it.  In a nutshell, it is the material cost of producing the items your restaurant serves.  That means (more…)

One thing that I do like is a diverse menu.  I think in order to run a successful restaurant you need to attract as large a customer base as possible.  To do that you should offer something for everyone.  Even my favorite BBQ and burger restaurants offer lighter selections like salads and grilled chicken.  The more different tastes you can accommodate, the better your chances of of getting families and couples to return to your restaurant.

Here’s the danger; if you are not careful when you are designing your menu, that diversity can drive your food cost through the roof.  (more…)

It’s funny how your perceptions change as circumstances change.  This especially true with the severe downturn in the economy.  Time like these require taking a hard look at how you are spending your money, and where you can make changes to cut costs.

The two biggest costs on most restaurant budgets is food and staff.

Cutting either of these can be a little dicey.  Cutting food costs many times results in either less options for your customers, smaller portion sizes, or lower quality.  When the market is so competitive, any one of these could be the nail in the coffin for your business.  If a customer starts to question the value of coming to your restaurant, they will start looking for where the value is better.

That leaves you with cutting staff.  Again, not an easy decision, but one that may need to be made.

When times are good, and cash flow isn’t an issue, it is easy to justify staffing decisions.  After all, you need to make sure you have enough people to cover the rush, and to keep the place clean.  An extra cook or bus person on Friday and Saturday night is a small price to pay for keeping your guests happy.  But now, cash flow is an issue.  In fact, for some restaurants, it is a huge problem.  Suddenly those extra people are a burden you can no longer afford.

Now is when you need to look at everyones jobs, to see where you can operate more efficiently with less.  Can the servers side work be changed to cover the jobs that the bus person was doing?  Can 3 cooks do the job that was done by 4 cooks?  Can you still get enough coverage with some people working 1 less hour each day?

It’s unfortunate to have to let people go, but sometimes the survival of your restaurant requires hard choices.

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.