I'm a chef that owns his own restaurant!!! I need help!!!

Discussion in 'Professional Chefs' started by cajunfman, Aug 18, 2012.

  1. cajunfman

    cajunfman

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    I opened a QSR 2 years ago.

    I need help getting my food cost down!!!

    so far this year we have sold we have had 19,862.86 in sales. Our costs have been 19,782.43. So No profit and I can not even pay myself or my partner. How do I get the cost down....is there anyone that can help?

    Thanks
     
  2. chefbillyb

    chefbillyb

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    $19,800 in sales divided by 30 weeks is $660 a week ????????? is that about it..........I figure QSR is Quick service restaurant ???? is that about right..............I don't think controlling cost is the problem, I think increasing sales, is the answer.........if you have low sales and high fixed costs your screwed. Whats the rest of the story ???????????? ChefBillyB
     
  3. chefedb

    chefedb

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    I agree with ChefBilly  you need to boost your sales, you need volume. If all you do is $660.00 a week you willo never show a profit and never be able to pay yourselves. At this rate I don't care if your in the lowest rent district in the world, between taxes, electricity, gas, permits,uniforms(aprons) you are screwed. Sell it and get into something else before you have to pour more in.
     
  4. cajunfman

    cajunfman

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    We opened this location in April so from April to July that is just 16 weeks so thats about 1200 a week. We are a one of a kind in a low income area. We are working on advertising to let people know we are open. I know we need to get people in the door. But I need to know how to get food cost down. 

    Please no judgments just information on how to do this would be great. :O)
     
  5. cajunfman

    cajunfman

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    you can't sell something you created!!! And we are in a low income area Michigan!!!
     
  6. petemccracken

    petemccracken

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    Lock the back door, or at least put an alarm on it!

    Check the garbage cans, cut your waste!

    Eliminate spoilage.

    Find less expensive suppliers.
     
     
  7. cajunfman

    cajunfman

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    we use GFS and Sams club only 4 people work here we have hardly no waste and we sell everything before it goes bad.

    May be our prices are to low?
     
  8. meezenplaz

    meezenplaz

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    you know, there be several good minds in here, and loads of managing experience, so we could probably help you figure some things out....but its a two way street--many factors go into running a food establishment, and trying to extract the info needed to help you piece-by-piece is likely to make the process a lot harder. Might I suggest you think over everything youre doing and maybe make a longer more detailed post expaining things?
     
  9. cajunfman

    cajunfman

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    Of course. What would you like to know. We are a 4 man operation. We are open 6 days a week from 11am to 10pm. we average 30 tickets a day but the last week of the month is dead maybe 15 a day. We are in Michigan. I have no idea how to estimate what food cost is. I need some easy formula to figure it out. How do I at the end of the day and I count my money do I split it up into different accounts or just go into on lump account? I just want to do what is right and make sure I'm not spending to much or not getting enough for my food. I can send you to my website if you like.

    I just need some advice.
     
  10. petemccracken

    petemccracken

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    Add up your food invoices/receipts for a single month and that will tell you your food cost per month.

    There is no formula for food cost! There is a formula for calculating food cost percentage:

    FCP = (FC/GS)*100, where FCP = food cost percentage, FC = $ spent on food, GS = $ sold

    Sit down TONIGHT. Sort through ALL your receipts, check stubs, credit card receipts, debit card receipts, etc. and total up ALL that you spent for food in the last 30 days.

    Hm, one curious thought, are YOU handling the register? Sometimes money has a way of evaporating...
     
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  11. chefbillyb

    chefbillyb

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    Cajun, $1200 a week = $200 a day = $18.18 per hour. With these kinds of sales, you could not even make it in a food truck, with no labor, and basic overhead expenses. Food cost has nothing to do with you making money. You need to concentrate on bringing in bodies, 30 covers a day, with a one week a month with 15 cover days, is the beginning of the end. Get some people in the place, until then fire the whole crew.......ChefBillyB
     
  12. cheflayne

    cheflayne

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    Increasing sales will lower your costs. Sales can be increased by getting more people in the door,  or increasing check average, or by raising prices, or a combination of these.

    Without sales increasing, the simpliest way to dramatically affect your bottom line in a four man operation is to lower your labor cost by eliminating a position or at least by cutting back hours.

    The national average profit margin for restaurants is in the 2-6% range. QSR restaurants are usually at the 6% end. You are at about .6%. If you increase your number of guests by 1%, raise your prices by 2%, increase your check average by 2%, lower your labor cost .5%; then you will be there.

    What is your web site?
     
  13. cheflayne

    cheflayne

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    Your costs were $19782.42. How much did you spend on food and beverage? Take that figure and divide it by 19862.86. Then multiply that by 100 and that will be your food and beverage cost percentage. For a QSR it should be around 32%.

    How much did you spend on labor. Take that figure and divide it by 1982.86. Then multiply that by 100 and that will be your labor cost percentage. For a QSR it should be around 29%.
     
  14. someday

    someday

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    Yeah, we'd need a lot more information before we could begin to help you in a more meaningful way. 

    I don't say this to be cruel, but you seem to have little to no idea about what you are doing. You say you opened this location in April? But you also opened it 2 years ago? Is it seasonal? Or do you have multiple locations?

    Everything everyone else said is 100% right of course. You seem to be confusing some terms as well. Food cost is how much money you spend on food. You should not have to estimate this number...you (I assume) have invoices and receipts from all your purchases for food, so all you have to do is add them up to get the amount of money you spend on food. 

    The food cost percent is how much of a percentage you spent on food as it relates to your gross income. The lower you can get this number, obviously, the more money you have to spend elsewhere and/or profit. 

    There are a few ways to go about this. If indeed it is true that you have hardly no waste and sell everything you make before it goes bad, then I would look at a couple factors first. 

    The first thing I would do is make sure your prices are where they should be. If you don't charge enough for your food, you won't make money. In fact, I've seen places that actually end up loosing money on some items by the time labor and other things are factored in. You need to know how much money it costs you to put a portion of food on a plate and make sure you are making money at the price you are selling it at. 

    Do you use a lot of pre-made, frozen, convenience food that you either deep fry or reheat? Things that you "just add water" to and pull out of the freezer? These things, while convenient, are (at least as a general rule) more expensive than the house-made alternative. If you, for example, use pre made frozen chicken fingers instead of cutting and breading your own chicken, you are almost assuredly paying more. Same thing goes for soups, sauces, onion rings, hush puppies, etc. 

    Are your employees stealing from you? Hey, I'll let you in on a secret. If you run a restaurant/kitchen, your employees WILL steal from you. I would say that 100% of restaurants in the country have some form of "theft." Theft can be things like making themselves lunch, sending a friend an order of "free" fries, drinking soda. It can, of course, be more damaging and obvious things like walking home with a steak wrapped in clingfilm in their pocket, or taking money from the till, or alcohol, or office supplies, toilet paper....the list goes on. 

    I'm not suggesting that everyone in every restaurant is a thief...though that also might depend on your tolerance level and what you consider theft. Is the waitress drinking a Coke really a THIEF? It depends on your definition and what you allow....if you allow employees to have a cup of coffee or two in the morning, or to make themselves chicken sandwiches for lunch, that is OK and totally up to you. You just have to know and account for it. 

    I don't know if Sam's Club is cheaper than a vendor....I would think that Sam's Club would still be more expensive than ordering things from a vendor, but I haven't done a lot of shopping at Sam's Club so I don't know. Just make sure that you are looking at more than one vendor so you can bargain shop and get the best prices. 

    Did you know you can sometimes negotiate with vendors? A lot of chef's don't do it, but you can sometimes talk them down...especially on meat and fish prices. Never hurts to ask for a deal. Say..."hey listen, I'm thinking of putting tilapia on my menu, but your price is a little higher than I would like. I'm going to be buying a lot of tilapia in the next 6 months, is $8 a pound really the best you can do?" 

    You might also try a book search on amazon for basic restaurant food cost and controlling costs in restaurants. There are many out there....
     
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  15. chefedb

    chefedb

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    How can any of us help you bring food cost % down?

          We don't know what you are selling, and  what your selling price is, nor do we know what you are buying and at what price.

        Nor do we know your portion sizes

     . You give us some of these and MAYBE we can help you.

    Also based on your volume it would be cheaper at costco or sams >

        Why ? because if you needed a # 10 can of tomatoes to prep something , you would not have to buy a case and have 5 cans sitting in the storeroom for a month. Thats your MONEY tied up on shelf.

      Again we can't give you info unless you give us some .You have over 200 years of experience  in these answers above  USE THEM.

       Also re theft  Sorry but Most everyone has a bit of larceny built into them. Thats human nature. A secretary takes 2 paper clips from her office, Thats theft but nothing substancial, but now times it by x amount of employees 250 days a year and becomes  a lot.
     
  16. cajunfman

    cajunfman

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    thanks for all the answers!!! We opened our 1st location 2 years ago. The building was hell and the owner fixed nothing spent almost 10 grand getting it ready for inspection passed had it open for a year and a half. Not a good location and the building was falling apart. Found a better location with tons of traffic so we moved there. atouchofcajuncafe.com is the website. We only use frozen fries and jumbo shrimp. Everything else is fresh. we buy #10 cans of tomato paste and ketchup. Our meat market gives us the best prices in town. Fryer greas is killing me at $32 a box and it takes 2 per fryer and I have 2 fryers that have to be changed oh every 3 to 5 days. We do give big portions. Our tacos are the cheapest in town. We use ground chuck and get it for 1.89 a pound. Cajun sausage is really expensive. Um we use red & green peppers and onions in everything.

    There are not a lot of venders in our area so we have to look in Detroit. I am waiting for a call from Sherwood but they mostly deal with meat. I am not really sure of any other vendors that deliver here. Most restaurants in the area deal directly with Sherwood or GFS

    My partner is working on Marketing. We are doing our best to get bodies in here. Working on contracts with the plants in the area. DOing tons ov fest and events to let people know we are open.

    I think that our prices are low. Although guest come in and say "hmmm Catfish and fries 5.99 how many pieces", I say "1 its a 7 ounce fillet", they say "thats to much, when I can get 3 down the street for that".....that is frustrating although I know there catfish is see threw and that they slice the fillet into 3 instead of just giving them the one.
     
  17. rbrad

    rbrad

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    using the catfish as an example ... it has a lot to do with perceived value ,especially in a low income area ; you would be better off giving three smaller pieces than one 7 oz fillet. also giving them another piece for $2.99 is giving two people a chance to eat a substantial meal for just over $4 each. most of the prices seem too low but the price of the platters in comparison to regular menu prices appear disproportionately high. i wonder if your chicken platter that consists of chicken wings and two sides would go over better if it was a roasted chicken with two sides. how much alligator and frog legs do you sell .... dead stock isn't good for your numbers. having a grilled cheese for $1.49 is a bad idea,if you give people a choice of something that cheap they will go for it;even if your margins are fine if 100 people ordered that you still would only have $149 in the till which is nothing. $1 hot dogs... same thing. unless you're using it as a vehicle to sell booze $.70 taco tuesday is a waste of your time and money. a kids hotdog is more than a regular hotdog, does it include fries? your website says ..... daily specials ---- call for specials , it might be better to update every day or use facebook or twitter to let people know. are there a lot of people from louisiana in the neighbourhood or are you you kind of an ethnic place? you mentioned mardi gras, do you serve alcohol and if you do would you do better by becoming a new orleans style neighbourhood bar instead of a cafe? dirty rice and jambalaya as sides are the same price ... has the menu been costed out or did you just pick prices you thought the market could bear? it probably would be good to bring in a consultant to do some menu design and costings but be careful; make sure it's someone with a good reputation. if you want to run cheaper specials to bring people in only do it during the last week of the month when everyone is broke. if you use red and green peppers in everything what is the ratio .... the cost of red peppers in february can kill you. there just seems to be a lot of small things becoming a big thing, i think with a little more structure you might be able to pull it off.
     
  18. brandon odell

    brandon odell

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    You can't know you need to get your food cost down if you don't already know your food cost, so we don't know that food cost is even a problem.

    I completely agree with everyone who brings up sales. You just can't make a living running a restaurant that only does $50K per year. In a well run QSR, you can expect your prime cost (food plus labor, taxes and benefits) to be at least 50%, and up to 60%. Most well run restaurants still spend 8-10% of sales on occupancy costs (rent, CAM or triple net, property insurance, equipment leases), in addition to 10-12% on other expenses. That means a well run quick service restaurant can only make 20-30%. The national average is 10% according to the National Restaurant Association.

    Even if you are running in tip top shape and turning a 30% profit margin like a few pizza places, Sonics and delis, that is only $15K on $50K in sales. That would be okay if you were able to pay yourself a living wage out of the restaurant payroll. At $50K in sales, your labor budget can't be more than $15K itself. That's not much money to pay four employees. I assume only two of the employees are getting paid and the two partners are working for free? If you had your 30% profit margin (which isn't a reasonable expectation despite the fact several restaurant can achieve it), that would only be $15K to split between you and your partner. What a waste of time for all your hard work.

    The point to my post is this; You need sales. Nothing else matters. Two employees are enough to serve 30 customers a day. Let the employees run the restaurant and get out there on the street to get people into your restaurant. Forget the festivals and trade shows. That isn't where your market is. Your market is within a mile of your restaurant. If you have heavy vehicle traffic, easy access and a good sized parking lot, your market is within a 3 mile radius. Forget everyone else until you actually capture the people in that radius.

    You have to get your food into people's mouths. From 10am until your lunch rush, you and your partner both should be passing out samples on the street and taking them into area businesses with copies of your menu. You need to be wherever people are before lunch, to give them a reason to come eat at your restaurant. A decent tradeshow usually costs $500-$1000K for a booth. For that cost, you could pass out free tacos every morning for two weeks, and people would know what your food tastes like.

    From there, it's just a matter of making sure your product is great, and you can get it into your customer's hands within 2 minutes of them ordering it. 3 minutes max.

    Another thing. If you only have 30 customers a day, you don't need a big menu. You would be better off having two or three great items that can be fired out fast, allowing you to serve more people during a rush, use less employees and make more revenue.

    Brandon O'Dell
     
  19. meezenplaz

    meezenplaz

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    Some additional thoughts, (and I fear I may be restating some things...)

    so far as the money/theft is concerned, first question is, are your drawers for each shift balancing?

    All cash in drawer plus all credit receipts coinciding with the total ticket amount for that shift?

    And are all the tickets consecutive numbers--no missing ticket numbers?

    Also does your cash register have an internal duplicate receiptsystem? (I have seen THAT one feature catch more "disappearing receits" than just about anything.) So it's the dollar bills-with-legs, and the vanishing tickets you have to keep the closest eye on, not so much the coffee and fries, especially with you determining a low waste/product loss number.

    As to accounting, like any other sales system with monthly variables, the longer you "walk it out" the more accurate your numbers are. So a 3 or 4 month tally of materials costs would be more spot on than one month--something to keep in mind.

    Regarding suppliers, keep a close eye on what youre spending--as your sales volume increases (which MUST happen) you'll eventually reach a point where sams/costco is less economical than a supplier. It's all about volume--the bigger the order the better deals you can (potentially) get.

    Prices....I could be wrong, but I'm intuiting that it might be better to keeep your prices stable right now, and concentrate on badly needed volume, than risk losing any of your current business to higher prices. Seems to me you cant afford to lose even one steady customer right now, because he/she got irked that they have to pay more for their lunch than they did last week. I've seen 10-year regulars "walk away" from a restaurant & never return over 30 or 40 cents. Same appplies to the menu... you go tampering with it now to compensate for low sales and you may just be further feeding those low sales.

    Now  its up to you how to keep customers happy, e.g., like whether its strategic to cut your catfish into pieces to appear more competitive, etc., a judgement call on your part.

     

    -Meez

     
     
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  20. chefbillyb

    chefbillyb

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    Hi Cajunfman, Happy Sunday, you off today. As far as food cost goes, the Tacos at .80 and .90 cents has to be a loser, the sliders also at .75 is another one that needs looking at. What is a Cat Fish Fillet going for now ?????????? I was just on the Oregon Coast, Fish and Chips in all places, $14 to $16 a order wit h fries and slaw. The fried seafood platter is $17, I think you see where I'm going with this.

      I think, you are in the wrong place with your restaurant, you need to be up town dealing with people that can afford your kind of menu. Your Restaurant doesn't have any YELP reviews or Tripadviser reviews, this tells me, your only known in a small area to a few people, and this isn't a area that people want to travel down to at night. I would rather move up town that try to grind it out with people nickle and diming you to death. Your food looks good, the menu may need some tweaking, but all in all you just need bodies. I don't think the bodies you have in a mile radius, are the bodies that will bring you over the top and make you a successful operation..............ChefBillyB
     
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