# Joe Bastianich Claims Restaurant Makes 20% Profit



## maxs (Oct 29, 2012)

In Joe Bastianich's book he claims one of his restaurant makes 20% profit. I am a chef/owner and I've never heard of such a thing. Also he claims his rent is 6% of gross. In NYC?

For unique restaurants isn't profit more like 4 or 5% after everyone but the owner gets paid?


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## phatch (Mar 29, 2002)

He could be meaning different things than you think. Profit  and Profit Margin aren't the same thing for example. Profit margin is just net sales divided by costs. Profit might be consumed in various methods to lower taxable income, plowed back into the business in the manner of amazon.com that shows little to no Profit to shareholders on its income statements, but certainly turns a profit on its sales. 

I don't personally respect what I've seen of Joe Bastianich and don't trust him as far as I can spit a rat. (This is not a well informed opinion, granted, just based off of what I've seen of him on TV.)


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## cheflayne (Aug 21, 2004)

Here’s the Restaurant Math (Profits) according to Joe Bastianich:

30% goes to Labor Costs

30% goes to Food & Wine Costs

20% is Miscellaneous (including rent, linens, insurance, bug spray and other items)

20% is your profit

I don't concur with his 20% miscellaneous for a variety of reasons.


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## grande (May 14, 2014)

Drop the zero and it seems more in line with most places I've worked. Then again, best case scenario? Babbo might be able to do it. He says the bought it, so no lease. And its a lot of pasta, right? So theoretically, it might be possible for someone...


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## chefedb (Apr 3, 2010)

Chef Layne  !

You are correct this guy is delusional ,  He forgot    Permits and Licenses/Taxes/

Garbage removal, Uniform Rental and Cleaning/ Gas? Electric/ Equipment breakdown and replacement./Alarm rental. Couple all of this with NY City rents /Workmans Comp and Unemployment insurance                                20%net        IMPOSSIBLE


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## cheflayne (Aug 21, 2004)

Even with lots of pasta, he is still talking reasonable food cost of 30%.


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## kuan (Jun 11, 2001)

Joe's an old school Italian guy living in the right place at the right time.  I wouldn't doubt it.


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## maxs (Oct 29, 2012)

What do you all think net profit (NOT profit margin) should be in a small plates place with 70 seats: rent at $5000 (seaside town) and paying myself as chef/owner 50k/yr

3%? 4%? 5%? (after paying myself, mind you)


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## cheflayne (Aug 21, 2004)

What sales?


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## maxs (Oct 29, 2012)

cheflayne said:


> What sales?


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## maxs (Oct 29, 2012)

Let's forecast 600000


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## cheflayne (Aug 21, 2004)

close to zero


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## maxs (Oct 29, 2012)

Why, because rent is at 10%?


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## allanmcpherson (Apr 5, 2007)

There might be other ways of pulling that off...
http://nypost.com/2012/03/08/batali-partner-settle-wage-and-tip-lawsuit-for-5-25-million/


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## cheflayne (Aug 21, 2004)

MaxS said:


> Why, because rent is at 10%?


That and your labor will probably run a little higher than 30%.


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## maxs (Oct 29, 2012)

So don't bother opening a restaurant that grosses less than 700k unless rent is super cheap?


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## kirayng (May 28, 2014)

The restaurant that I work for has a 20-25% profit.  We run a very lean crew that works extremely hard.  I don't know where in the ballpark 125 grand on a slow week is; that's last week's gross sales.


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## maxs (Oct 29, 2012)

6 million a year in sales?


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## grande (May 14, 2014)

I worked at a place that did 7 million and ran about 2% profit. It was the seasonality that killed it...


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## cheflayne (Aug 21, 2004)

2% profit is not bad really, especially in places with checks over $25 per, that segment according to he NRA shows an average profit of 1.8% While seasonality will definitely effect profit, it will not really effect the percentage of profit.


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## maxs (Oct 29, 2012)

Does it not seem idiotic to run a stressful and risk-filled business that grosses 1 million dollars, yet only yields $18,000 ? That's 1.8% of $1,000,000


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## cheflayne (Aug 21, 2004)

There are reasons that I have been cured of restaurant ownership. ROI, both financial and emotional, being a definite contributing factor as to why I am a former owner, not a present one, and content  to maintain that status.


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## mark hernen (May 12, 2013)

he also talks in the book about how the owner of the building tried to evict them because the former owner gave them a special friend price on the rent with a 35 year lease. think what your profits would be if the rent you paid was considered cheep 15 years ago. in todays market with the amount of inflation since then that would be huge savings. if they didn't have the low rent price it may be different but they are saving a ton of money


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