Joe Bastianich Claims Restaurant Makes 20% Profit

Discussion in 'Professional Chefs' started by maxs, Nov 11, 2014.

  1. maxs

    maxs

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    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?
     
  2. phatch

    phatch Moderator Staff Member

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    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.)
     
    Last edited: Nov 11, 2014
  3. cheflayne

    cheflayne

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    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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  4. grande

    grande

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    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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  5. chefedb

    chefedb

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    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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  6. cheflayne

    cheflayne

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

    kuan Moderator Staff Member

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    Joe's an old school Italian guy living in the right place at the right time.  I wouldn't doubt it.  :) 
     
    Last edited: Nov 11, 2014
  8. maxs

    maxs

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    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)
     
  9. cheflayne

    cheflayne

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    What sales?
     
  10. maxs

    maxs

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  11. maxs

    maxs

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    Let's forecast 600000
     
  12. cheflayne

    cheflayne

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    close to zero
     
  13. maxs

    maxs

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    Why, because rent is at 10%?
     
  14. allanmcpherson

    allanmcpherson

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  15. cheflayne

    cheflayne

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

    maxs

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

    kirayng

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    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.
     
    Last edited: Nov 11, 2014
  18. maxs

    maxs

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    6 million a year in sales?
     
  19. grande

    grande

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

    cheflayne

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    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.