Running a restaurant

Basically running a restaurant is very simple. You open people come in and you serve them, the customer is satisfied, they pay. The customer comes back, tells friends and family. More people come and you serve them, they pay and so on. You build a customer base and you go from strength to strength. Like many things in life it’s not that simple. You need to be aware of four things

Staff.

The right staff for the job that you require them to do with the right level of training is so important. This splits in to two groups, front and back of house. The front of house staff are the people who deal with your customers. They are so important as they meat greet, seat, serve and deal with the customer and if they do it badly then no matter how good the food is you will not get people back in the door. Bad inattentive service and a lack of product knowledge is what has been the undoing of many a restaurant. And the right staff for the job what is good for one restaurant is not so good for another.

Chefs are supposed to be skilled kitchen technicians and if that is what you want then get a good chef. But remember that the skill level that you require is all depending the menu that you are serving. You need the requisite skill set for the food that you are severing. Do not get a pastry chef to take frozen deserts out of the freezer to defrost. The kitchen wage bill will probably be the highest so make sure that you get the right staff. Also if you are the owner remember that the Chef does work for you. 

After you have got the right staff then you need the right amount of staff. The wage bill will be one thing that you will have to control so always monitor who you have in and where and why. It is easy to get some one in a quiet night because they always do that night. You need your staff to be flexible and reliable, in return offer them good training and a better than average wage. Hopefully you will get the staff you require.

Food and beverage costing.

Food and beverage costing is always a night mare and one that I always find annoying as most people get it wrong. The amount of times I have seen a person who is supposed to know what they are doing take the cost price, say £1.00 and just add 65%.

£1.00+ 65%=£1.65

To work out what a GP (GP is gross profit) is take the cost,  £1.00 and divide by the cost percentage. If your expected GP is the classic 65% then the cost is 35%. £1.00 divided by 35 is 2.857p; multiply that by 100 to give you 285.7so your selling price will be £2.86 to get a 65% GP

Expected GP = 65%

100-65=35%

Cost £1.00

£1.00 Divided by 35=£0.02.857

£0.02.857 is 1% multiply by 100=£2.857

Selling price £2.86

To see if you have this right divide the cost by the selling price to see what GP you are getting.

£1.00/ £2.86x100=34.96503%=65.03497%GP

Compared to what it would have been if you just add 65%.

£1.00/ £1.65x100=60.60606%=39.39394%GP

To get this right when working on a menu is important. Some things will cost not a lot and you will get 70% or 80% GP on them. But others you will have to look at 50% GP to make them more affordable. What you need is balance and then you will be on target .

Daily monitoring of the cost.

Almost all establishments have a stock take at the end of the month to see what the GP is. But a lot of the time during the actual days between stock takes they will not know what they are doing how well they are doing and should they address this. For this you need to see what you spend each day and what you take.

Spend to revenue.

Monday spend £35 food revenue £58

£35/ £58x100=60.344%=39.656%GP

Do not panic this is just one day, what you need to do is do this very day.

Monday                  spend £  35      rev £    58 = 60.344%

Tuesday                 spend £  87      rev £  125 = 69.6%
Wednesday            spend £  25      rev £  335 = 7.46%
Thursday                spend £  67      rev £  359 = 18.662%
Friday                     spend £256      rev £  478 = 53.556%
Saturday                 spend £115     rev £   526 = 21.863%
Sunday                   spend £    0      rev £  150 =    0%
Total                       spend £585      rev £ 2031 = 28.803%

By doing this you can see pasterns and you can ask question such as why did we spend so much on a Tuesday. The answer might be that you had a function on Wednesday . but what it does give you is the knowledge of knowing what you are doing. And how you are performing .      

Do this daily with your food and weekly with your beverage and wages and you will be looking at controlling the cost of running your business. If you want to know what I would like to see as a cost for all things then here is the list

FOOD COSTINGS, RESTAURANT.

Direct food cost 30%

Wage cost 32%
Miscellaneous 8%
BEVRAGE COSTING
Directs beverage cost 35%
Wage cost16%
Miscellaneous 4%
FOOD COASTING BANQUITING.
Direct food cost 30%
Wage cost 30%
Miscellaneous 8%

So if you are selling an item for £2.86 you really want it to break down like this.

£0.858 food cost

£0.9152 wage cost
£0.2288 miscellaneous
£0.572 overhead
£0.286 profit

Now this is just a model and you might find yourself in the middle of London west end paying top rents and rates, in which case the cost will be different. But as a model they give you an idea of what you need to be doing.

Keep control of the costs and you will keep a control of the business. Do that and you will be winning the battle to becoming a successful establishment.