22 Jan Resolution 3. Start tracking, measuring and taking action
22 Jan 2018 admin
Right, so I had a new project: I asked a lovely guy – a head chef -, what were his 10 best sellers. He looked at me wondering why I would ask that question. He was a bit dubious and then he started naming them. Then we checked the real figures together. Only 6 of them were correct and definitely not in that order.
Next question: what is the costing price on those 10 items and the gross profit? More or less 70% GP was the answer. Let’s work it out, I said, and we did. The theoretical GP for most of them was below 70% and specially worrying was the fact that the top 3 dishes were below 67%.
Considering that the financial structure for a casual dining restaurant in London is 30% Food & Drinks Cost, 30% Labour Cost, 25% Miscellaneous, Bills, Maintenance, rent etc and 15% is your profit, you don’t really want to have higher food costs. My dear chef was losing money on every single one of his best sellers; he was making money but they were not contributing to the profit as much as they should.
You need to know where you stand and be able to manage by exception (management by exception is a practise where only significant deviations from a budget or plan are brought to the attention of management. The idea behind it is that management’s attention will be focused only on those areas in need of action).
Track your profit per week on food and drinks, number of covers, average spend, staff costs, budget for labour hours, regular hours per week divided by front of house and back of house staff.
Identify your key performance indicators, track them and if there is any deviation, TAKE ACTION