Independant operating restaurants are constantly surprising me with their business operations. I would be interested in doing a research profile on how many of my customers actually do a monthly inventory (weekly?), track their labor costs related to sales (revenue/labour hour), or even understand their margins item to item.

This is a common theme among restaurant dreamers.

"I know how to cook & I have alot of friends & my husband can operate the foh because he has a great personality".

This is a recipe for success and disaster, you need to actually have the resources to assist in creating systems. I am a systems guy! In order for a restaurant to have true valuation you must be able to understand why your CM is what it is, you need to know the cost of your labour relative to dollar, and you must be able to take care of the inventory and understand food/beverage cost.

The restaurant business is one of the most challenging industries to truly grasp because of the complicated nature of the operation. You have food, beverage, labour, controllable costs, fixed costs, and sporatic CDB (costs of doing business). In a sense, as a restaurateur you are a complex, and hopefully profitable, value adding middle man that incurrs more costs than your typical product to customer middle man.

In order to truly understand the success of your business you are going to want to know that you food cost is 32%, liquor cost is 26%, wine cost is 38%, and beer is 29% (hypothetical numbers). You can divide your labour hours into your nightly sales to get a dollar per man hour (great bench mark to achieve and focus on). Many successful restaurants know that with the systems in place if they achieve the right dollar per labour hour they will achieve the service levels necessary to ensure a consistent experience that exceeds expectations, which is the ultimate goal right? Keep the customers returning and your sales will come.

Systems create consistency and consistency creates customer retention.

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Tags: and, beer, beverage, costs, food, liquor, system

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