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    101 Restaurant Secrets
    101 Restaurant Secrets
    101 Restaurant Secrets
    Ebook219 pages3 hours

    101 Restaurant Secrets

    By Ross Boardman

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    About this ebook

    This book is about the business of being in the restaurant businesses. Most restaurants fail within the first three year. During tough times, many will not reach the first year. Nearly all the reasons they fail are down to a few areas that the owner neglects to find out about. If you want to get into the restaurant business and learn the key skills to keep you there, read on . . .
    LanguageEnglish
    PublishereBookIt.com
    Release dateApr 26, 2016
    ISBN9781456610487
    101 Restaurant Secrets

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      Book preview

      101 Restaurant Secrets - Ross Boardman

      you.

      Costing

      Costing – What is it?

      Costing in our context is the science of establishing how much each item on the menu costs in raw material terms. If you are selling a bottle of wine or a steak dinner, the principles are just the same. There are many factors in restaurant success, this is one of the most important. Accurate timely costings will ensure you have a viable product and that you will have a measurable element of profit.

      You may be asking yourself why you should be doing any of this as you are not an accountant. The simple answer is that your accountant will have nothing to count, if you don’t get your costing done properly. Some of the building blocks of costing may look intimidating and some even contradictory to rational thought. It may take some time to get used to, but will eventually become second nature. It is a lot more complicated working out where your profit comes from if you haven’t gone through a process of costing.

      The flow works like this:

      1 Develop a FULL recipe for each menu item

      2 Keep a current master list

      3 Check what you need to cost

      4 Cost everything

      5 Understand the difference between stock weight and plate weight

      6 Count all waste

      7 Cost

      8 Calculate menu price

      9 Keep that master list updated

      Follow these steps for every item you sell and you will be in a better position to make decisions. Again, none of this is rocket science, but it does take a bit of time to internalise the lessons if they are unfamiliar.

      Developing the recipe

      There are three reasons for recipes, which is often 2 more than many chefs appreciate. First you need to know how to cook the dish, then you need to build your costs and finally, you may get to publish that cookbook one day.

      With building any recipe there is one thing I can not emphasize more, cost everything in there. What do you need to cost for a pan fried rib eye steak? Some would say a steak. That’s a fair start to the exercise, but if you are cooking something from a recipe you need all the ingredients listed.

      Even if the ingredients are at such a small level that you feel they would not be material to your costing, still measure them and record your findings. At some point you may substitute or upgrade ingredients and you may see a shift in the costs. Nothing is too small to capture the first time out.

      Ingredients for a steak recipe:

      10oz ribeye steak

      ½ oz butter

      ½ oz oil

      1tsp chopped parsley

      1 sprig of rosemary

      2 cloves of garlic

      Pinch of salt

      Grind of black pepper

      If you went through that list and put a cost against each item you may see more than 10% of the whole recipe in the ingredients below the steak. So potentially at this point you could have lost an invisible slice of your margin without knowing it. However, it goes deeper than that. If you don’t cost an ingredient then you tend not to hold it as important. Something like that sprig of rosemary could be bought in small plastic packs which cost a fortune when compared with a fresh plant on the windowsill. It may only take an un-costed splash of brandy and some wild mushrooms to ensure you have a loss leader going out of the kitchen door.

      Some of this may seem penny pinching and even a little too complicated. Give yourself some time to work through these pages, build some models and get familiar with the process. You will find that this turns into a simple routine with lots of advantages.

      A quick example of this is if you didn’t get a basic cost for your salt and one day you start to brine, cure or salt crust dishes. If you ignored how you purchase your salt, you could get a shock if you have never kept an eye on the price, which brings us around too …

      Your master list

      If you want to keep a handle on your menu costs, then you need a master list of all your costs. Canny chefs from time immemorial have kept little black books with current food prices tucked away in their pockets. With a combination of accurate recipes for all of your menus and a full master list of costs, you are well ahead of the game. Ideally you want to be looking at a spreadsheet to do this as the next sections will be a lot more viable with one. The whole purpose of the master list is to provide you with a current single source of data on all the raw material costs you use. With this you can accurately cost your menus and keep an eye on any warning signs in the market.

      The master list is a large grid with all the required data in several columns. I will assume you are going to work with a spreadsheet for now, but if not, the first column on this list could be redundant.

      Column 1 - Code

      Think of a basic and easy to use coding system for every ingredient you use. Keep it as simple and obvious as possible. Something like RIBEYE or ROSEMA, may be a damn sight more usable than MBSR or VHRO (Meat Beef Steak Ribeye or Vegetable Salad Rosemary). Take some time to think on how you want this to work for you. A good coding system reduces duplication and assists in searching.

      Column 2 - Description

      What is the ingredient, that’s all. Give it a meaningful description so that it is unique but not too specific to confuse you.

      Column 3 - Unit of measure

      How is it measured in buying? Think litres, pints, kilogrammes, pounds or per item. You can shop round through these units and translate them into recipe measures by experiment. You don’t buy flour by the teaspoon but you measure it that way for recipes.

      Column 4 - Cost per unit purchase

      How much does the whole bag or box cost if not sold loose?

      Column 5 - Purchase unit

      Was that flour in a 56lb or 2lb bag?

      Column 6 - Cost per unit of measure

      Column 4 divided by column 5

      Column 7 - Supplier

      Who did you buy it from?

      Column 8 - Contact details

      Who do you deal with and how do you get hold of them?

      Column 9 - Rank

      How do you rank this data if you have duplicate lines? Do you prefer a line for price or from a certain supplier or in a certain unit of purchase. The object of this is to filter out your preferred source for that combination of cost/supplier/volume for each ingredient. Your preferred source is going to be the basis for your recipe costing, all the others are back ups.

      Column 10 - Date

      When did you last review the cost?

      Now this may look daunting as you stare around the kitchen at all the ingredients, but you only have to start the master list from current recipes and then evolve it.

      Wet weight v dry weight

      Here is one fatal mistake … getting the wrong weight when you are costing a dish. As you want a realistic cost or control, you need to take account of how you go from the item arriving at the kitchen door to getting onto the plate. There are many people out there who will look at a 12oz steak and cost it based on 12 parts of the 16 ounce butchers cost to you. Unless you buy these products already portioned you are going to be looking at waste and waste costs. There is also a lack of comparison between portioned prices and whole prices. Buying a whole cut of meat as opposed to a steak gives two different prices to you. This make actually average out when you look at how much it costs to produce that dish.

      A 5lb beef fillet could end up yielding you 8 x8oz steaks as opposed to 10 which the butchers weight could tell you. Now you know you have a given waste or trimming cost for each fillet you buy in. Not a bad thing as it will be cheaper per pound than if you bought in the steaks ready prepared. There is good news as you can probably use some of this waste for other products or even stock.

      So, at this point we have two basic sums:

      1 Prepared weight is plate weight. You order in those steaks by weight at a price per pound and you have a number you can use straight off the invoice.

      2 Pre-trimmed weight. You will need to develop an understanding of how many fixed portions you can get out of a known weight of raw goods. In this case you build in the waste into your costing. In the whole fillet example above we have an 80oz piece produced 8x 8oz steaks. Each steak is costing you 10oz of the rate. So you would like at what you paid per pound and multiply by 10 then divide by 8 to give you the new rate per pound.

      A twist to this is when you buy something prepared but is sold at the whole rate. Fish can look very competitive when you buy them this way. You can also get filleted fish weighed rather than by the fish price. If you are going for the fish price, really trust your supplier. If they are time hungry, there is no incentive for them to do a good job in cutting the fish up for you after they have weighed it.

      One of the reasons I call this thinking wet weight v dry weight is because sometimes you will sell something at plate weight that has lost a lot of moisture. If you dry age your own beef you can lose as much as 20% of the weight. Salami 10-15% weight loss. This loss is on top of what you have taken off when trimming, so it soon adds up.

      The other reason is that sometimes a lot of your costs is literally wet. Frozen seafood sold by the pound will include the water glaze, as much as 50% in ice. Buy things in cans? You pay for the oil, brine or water in those too.

      Cash v percentage margins

      When you start looking at gross margin, we are talking about the same thing as when we looked at gross profit. While one of these numbers is a percentage and the other the overall cash benefit, they rely on each other. Basically, percentage margin is the part of the menu price that represents your direct profit. If you have a target gross profit of 100k at a 50% margin you will need to be looking at a turnover in excess of 200k. You have to get to that target by taking a number of different sized steps.

      There are items on your menu that will achieve high contributions of percentage towards the target and some which will offer high cash amounts into the pot. Something like coffee, many homemade desserts and soups will offer high percentage and low cash. On the other hand some of your wine list and expensive steaks could offer up low percentage and high cash.

      A table of four may look like this:

      Your 5.00 portion of soup probably costs no more than 1.00 for ingredients? So you have 80% margin on that dish. The same patron orders a 20.00 bottle of wine, please don’t tell me that has only cost you 4.00? Hopefully there is something more in the region of 8-10.00 for wine, which gives you a margin of 50-60%.

      Doesn’t seem that bad until you see that close to 40% of your gross margin on that table came from the steak and wine alone. Then if you think you have taken 18 items out to table, the mains and the wine gave you 55% of your profit, the other 12 high percentage items contributed the remaining 45%.

      Count all

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