Tag Archives: restaurant profitability

Where does your restaurant profit end up?

According to the external stock taker I was talking to yesterday, anyone in hospitality who thinks they haven’t got steeling going on is dreaming! Harsh words, but he was speaking from his years’ of experience.

How would you know if you had even minor problems with your stock – the odd free drink to friends, or a couple of fillets steaks for the weekend?

Unless you are on top of your figures it’s so difficult to spot when you have a problem. Sometimes it can go on for years undetected.

For example:

  • Do you know how much money you made last week?
  • Do you know how much your most popular dish is costing to produce and what profit (or loss!) it generates?
  • Do you know what impact a 1% increase or decrease in spend per head would have on your bottom line?
  • Do you know the return on your marketing investment from your last promotion?

No matter how compelling your marketing, how amazing your food, how extraordinary your service, and how happy your customers, at the end of the day if you aren’t making money on what you sell you have a problem. And unless you have a way of detecting this quickly the longer it can go on without you realising.

Stock control is key and here are some suggestions for keeping control on your stock. But it’s more than that.

Here are the top 4 things that you must keep on top of:

Regular recipe costing

  • Cost your recipe before you put them on the menu to decide if you can afford to put them on the menu at prices your guests are willing to pay
  • Post cost to check that what the chef produced is in line with what you initially planned. Ingredients coming in at higher prices, shrinkage, difficulties with portion control, wastage can all have an imp[act on the actual dish cost
  • Re cost the dish whenever any of the key ingredients fluctuate in price

Menu engineering

  • Knowing your stars – the high profit items, so you and your team know what to promote. Identifying the actual profit in monetary terms, not just percentages.
  • Showing your team the margins so they understand why some dishes need more of a push than others helps them understand the significance of why you might want them to sell more of one dessert than another

Your profit sensitivity

  • What impact small changes on spend per head, customer numbers or number of visits can have on your bottom line.
  • This is key to understand before you even consider giving any discounts.

Your bottom line profit and loss.

  • Too many restaurants leave far too long a gap between calculating their profit. Yes, it’s a chore taking stock, but unless you do you can never get anything like an accurate figure on your profit. And worse still unless you physically take stock you’ll never know when you have a problem with wastage or pilferage.

So to help you get on top of your figures I’ve bundled together my top 4 favourite tools, and am offering these at a special price for the whole of this week in honour of my birthday, plus I’m adding in a special bonus gift. Click here to learn more


Are your breakfast profits going in the bin?

10 tips to cut down on waste at breakfast service

  1. For self service dishes use appropriate sized serving utensils – the bigger the spoon, the bigger the portion your guest will take
  2. If serving fresh fruit have this sliced or portioned in some way – grapes are a classic example – unless you cut the bunches into portion sized ‘mini bunches’ your guest will waste half by trying to break off a portion, or even take the whole bunch
  3. Label your fruit juices clearly – how many times have you seen a juice left barely touched because the guest thought it was grapefruit and it turned out to be something different such as pineapple?
  4. Avoid over filling teapots (especially those with poor fitting lids that have a tendency to dribble).  This avoids guests wasting napkins and table linen in mopping up avoidable spillages
  5. If you use table clothes, reduce your laundry costs by seating people on an appropriate sized table.  If most of your guests will be breakfasting alone or in twos and your most popular tables are those by the window – position your smaller tables here and place large tables for bigger parties where they are less likely to be requested by solo guests
  6. Ask before automatically serving toast – you’ll be shocked to see how much of it ends up in the bin (often because it is served cold and rubbery!)
  7. Listen to the guest’s order, and only cook and serve what is asked for – if they ask for one egg, only serve one egg, not two
  8. Cook to order when you can, to reduce wastage. This might not be possible for ingredients such as sausages, but there should be no excuse not to cook eggs to order, or at least batch cook for busier hotels
  9. Ask for feedback, so you can learn what your guest like and don’t like.  Watch and monitor what comes back on guests’ plates – and follow this up to check the cause of this – are your portions too big, was it not cooked enough, was there a problem with the ingredients or flavour?
  10. Monitor wastage and costs in the exactly the same way as you would for any other meal service.  Do you know your exact cost per item and average cost per head for a full English breakfast including cereal, fruit, toast, juice, condiments, and table linen?