Your Profitability is A Simple Word Problem

 In 1. David Scott Peters, Food Costs, Menu, SMART Systems

There is one, and really only one, system that ultimately is the key to your restaurant running profitably. And that simple system is so easy even a junior high school student could follow it. Really! Because it is simply a group of word problems… the same one, over and over again.

That simple system or word problem is a recipe costing card.

Do you remember in junior high when you were first introduced to word problems? You know the one… “If a train leaves New York City at 2 p.m. traveling at 50 mph and another train leaves Philadelphia at 3 p.m. traveling at 75 mph, and the distance between the train stations is 100.7 miles, at what mile marker will they both meet?”

Well, putting together the key to running a profitable restaurant is similar to a word problem. It’s a combination of ingredients, portion and costs worked out to a per-item price. It’s similar in format to a recipe, except it focuses on the costs of each item instead of instructions for making the recipe.

Having recipe costing cards allows you to make smart business decisions to ensure your profitability, such as what to charge, whether you need to find less expensive products, if an item needs to change or even drop from the menu, etc. The only way to know the answers to these questions is to know what things cost.

I have worked with more than 1,000 restaurant owners at this point in my career, on top of the years I spent in restaurants. Through my experience I have seen one mistake repeated over and over again: restaurants operating without recipe costing cards.

So if it’s so simple, like I say, why do so many restaurant owners, chefs, kitchen mangers and back-of-house managers run away from this process and simply not do them?

Generally for a few basic reasons:

1) They don’t know how.

2) There are so many recipes that the sheer number scares them.

3) They don’t think they have to because they inventory, order and pay for the products, so they generally know how much each recipe costs.

Are any of these reasons striking you as familiar?

Well, the good news is, it really is so simple a junior high school student can do it. There is nothing really difficult about it. There are no algebraic equations to follow, no funky mathematical algorithm, no scientific calculator needed, nothing scary. It’s simple arithmetic: addition, subtraction, multiplication and division.

And yes, before you ask… you must complete a recipe costing card for everything you make in your restaurant. That includes batch recipes, sides, sauces and daily specials. The only way we can truly ensure we are going to make money is to know exactly what each recipe costs.

While a restaurant might have gotten away with this in the past, because food costs weren’t at record levels and new minimum wage increases weren’t anywhere close to the highs they are now, in today’s marketplace a restaurant MUST know how much every dish costs before they sell it. There simply isn’t enough margin in the restaurant business to continue being sloppy in your operations.

And you can’t re-engineer your menu without doing your recipe costing cards first!

If you want to run a profitable restaurant… YOU MUST DO YOUR RECIPE COSTING CARDS!

Do one or two cards a day and within a month or two they’ll all be done. Then, updating the costs on a monthly basis will be easy and fast.

And remember… they are so simple to do that even a junior high school student can do them.

Download this special report that shows you how to make your recipe costing cards.


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