The food plan!

Food is a business first and foremost!

If the crumbs, forests, pigs or anything else that you put onto a plate doesn’t make someone some cash, you’re back on the dole, scouring over Seek until you find the next business to ruin!

I have heard way too many times, from chefs and others, about how I need to be somewhat obsessed with food to be any good at cooking it, yet I feel I would be telling porkies if I tried to tell that to anyone with a straight face!

I’m in it for the cash!

As are we all. Especially your boss.

You need some form of combustion other than a pay cheque to succeed in hospitality, but a pay cheque starts the engine every time!

Tafe Tasmania taught me about the four main components that you break down when costing food and kitchens, back when I was a tear-away ratbag apprentice and I have always tried to follow suit when food costs became my job.

It goes like this-
Wages-30%, Food-30%, overheads-30%, Profit 10%

Wages

You can go from one week having a packed restaurant where you feel like you and your crew are the toast of the town, to the next wondering what the fuck has happened as you’re packing up your station thirty minutes before close time, after doing three tables of two and table of five!

Restaurant patronage ebs and flows and cannot be predicted any further than the busy or slow seasons.

You have to look at it with a twelve month perspective or something similar, as you will be contending with these seasons.

I like to call this a ‘business plan’ led by professionals that know what they’re doing.

You take any good organization in the world and what you’ll find in there is a baseline of what the business needs to run productively.

In the chosen subject of discussion I am breaking down a restaurant into two main areas- front and back of house. I could dribble on about front of house, but I don’t really know anything about their jobs, except that my food and hard labour sometimes pays their wages while they wait for tables, so I’ll stay away from that side of it.

Restaurant kitchens need a head chef and a sous chef, bottom line. You can fill the rest of it with a team of commis, CDPs, apprentices, whatever you want, yet make sure you base that on what you’re actually trying to achieve.

Do you want to win awards? Do you want to be a pumping local hub for the community? Do you want to make a fortune?

If you think you can make a fortune, go do something else, otherwise build your team around what your actual plan is.

I’m gonna use what would be my personal ideal team, based loosely around my previous failed attempt to purchase a restaurant.

I would go with five day weeks with a full time head chef, sous chef and apprentice, along with two floating casuals CDPs sharing the love with a combined hours of 30-40 per week.

Let’s say annually-

$75k head chef

$65k Sous chef

$40k Apprentice

$61k CDPs (@29/hour)

$40k Kitchen hands

$281k total

That’s a pretty solid total in anyone’s world, yet if you look at what you’re aiming for in overall returns for your food alone, you’ll be looking at around $936k annually in turnover, based on your 30% wages costs! We’re clearly not here to fuck fairies, so…

We’re gonna need to be purring day in and day out of operation, so ensuring you’re not short staffed is paramount!

You break this down again in sales for a week, depending on how many weeks you’re gonna open for the year- I like summer holidays, so we’re gonna close for two weeks over Christmas and New Years.

You’re gonna need to average at least $18k per week to execute this plan. Daily that’s just over $3.5k, we had better not bring the kids, hey!

This then brings me to your average spend per head. If you can seat 40 with say half those seats being turned over during service time, that’s 60 punters needing to spend $63 each to reach your target!

You’re gonna be hard pressed to pull that much out of your average punter in a standard restaurant, so do something to piss the chefs off- split shifts every day!

With 160 or so hours over five days to play with, this shouldn’t be to much of a drama!

So we’re adding in an estimated twenty covers a day, at $20 a head, which will accumulate us an extra $100k per annum.

Over all what this does is takes the pressure off dinner service and gives you an extra avenue to hit your target budget and hopefully make you some cash.

So at the moment we’re aiming for $933k, of which your team is allowed to cost you $281k.

We’re gonna make that back at $100k over lunch at $20 per head, and dinner time has been reduced to approximately $55 per head.

We’re forever mindful in this whole process that this plan is make believe, or more specifically it’s called a fiscal budget!

No one is gonna guarantee you anything, you’re gonna rely on your ability, as well as the ability of those around you, to cook good enough food, service after service to create a successful restaurant that every punter with an Instagram account and Tripadvisor app will come flooding to, without mentioning word of mouth 😉.

You could go with the most detailed plan imaginable, hire some muppet that fucks you over every time you leave the room, and it’s all over red rover. Hence, I like a plan that enables me to be present most of the time, or at least until I know the chefs under me are competent enough to maintain the standard!

At the end of the day it’s the head chef that is the fallout when things go bad, so best make sure people follow your lead, pied piper style, as you’ll only have yourself or him/her to blame when the bank comes calling!

Food costs

This is the part of cookery that get my juices flowing!

The levels involved when it comes to turning out a profit are complex, so I will try to keep this part as simple as possible!

Some find this hard to believe, but tasty and efficient food is your foundation.

You have a menu, which is your backbone of day to day operation, which should generate you some profit- yet in my mind, it’s more important as a seat warmer or a restaurant filler than making a direct profit!

Get the people in, even if you loose a bit in doing it. Marketing is a beautiful thing!

Getting bums on seats is the foundation of any restaurant, so ensuring patrons know they can come down to your establishment and enjoy their favourite cut of scotch fillet, braised lamb, pork belly or chocolate brownie will ensure these people return time and time again. It is extremely vital though that you have monetary balance with these offerings to ensure profit is generated from it!

Having a few items on the menu that may not make you a heap of cash, yet will get a few punters in while still ensuring that the difference is made up for with other items that gain you returns is crucial.

Putting an expensive cut of steak on that will entice the man of the house to come down and spend his family’s hard earned cash is what I’m talking about. Just be sure to have a tightly costed, tasty and popular salad or braised cheap cut of meat that your front of house will promote to balance out your menu.

The prime cut of Cape Grim steak or Georges Bay oyster is what’s got those punters in in the first place, but you’re gonna make your cash off of your house crumbed schnitzel or house baked lemon tart! It sure as fuck isn’t coming from the $10 a kilo baby carrots you’re running with a few dishes. It’s all about balance.

Then there’s the specials board. What to do with those nearly perished Lamb racks or three serves of Stripy Trumpeter fillets left over from last nights special? Put them on a new special and get your best waiter (the one that got enough cuddles from mum and dad when growing up) to sell that shit for you! It’s way better for your food costs and boss’ profit when you’re not throwing stock in the bin! I’ll touch on this a bit later in the profits section.

Unless you’re a fine dining restaurant, there is really no need to be a wanker about a special not being a potential finalist on Master Chef. You’re just a cook in a kitchen, earning a wage. As long as it’s not burnt and doesn’t taste like shit… Fucking go with it! Some of the best dishes I have put together have come from having five to ten items that I needed to move ASAP that I have just thrown together and gotten a good waiter to push for me.

Customers are the best feedback you can get, as well as being a great free marketing tool. They’re gonna tell you what they think every time and tell every other person that probably doesn’t care about it also!

I personally hate avocado, yet I’ve nearly been lynched on a few occasions when expressing my opinion on it! It is one of those foods where if you can utilize it well enough, whilst also being intelligent with your par levels, these little dozzies will bring the ladies down to fork out their hard earned money! Who really gives a fuck if I don’t like it, as long as my customers do I couldn’t give a toss!

One of the important things to remember is to not get too caught up in the free range, organically grown and massaged vegetable phenomenon that is being sensationalized at present!

As far as I’m aware the average punter can’t afford to buy the hormone free, free range chicken breast or the pesticide free, organically grown tomatoes in the 21’st century. The last time I checked there is close to 8 billion of us muppets systematically ruining this unique and beautiful planet we call home! And mother nature is starting to drop the hammer.

Not to mention that being a chef is a trade profession! If I cant create something special out of $3.60 worth of cauliflower and $5 worth of cream that people orgasm over after nearly twenty years in kitchens, then I would have never been qualified ten years ago!

Baby carrots look sexy, I get that, yet I could have never done my job as a head chef properly if I had utilised only the finest of ingredients! They are just too expensive, full stop! I believe there are really no skills involved with using most baby veggies. Not to mention they really do look sexy, so who would really want to make a cumin and orange puree out of those cute little baby carrots?

Best to have a place for them from a promotional point of view, but don’t get caught up with the masses! Use your skill set, do some homework and don’t be fucking lazy! Create something with the $2 a kilo carrots or the $7 a kilo beef brisket ya lazy bum! Your boss will love you for it and maybe you’ll become the mayor of a small community while your at it!

I’m starting to ramble a bit too much so Ill give you a breakdown on how to cost something and move on!

I’ll keep it as simple as possible and go with a loaf of bread with poached eggs.

A dozen free range egg on average costs about six bucks! divide those eggs by twelve and you’re looking at $0.50 cents a pop!

Flour, we’re looking at about say $30 for a 25 kilo bag. If I divide that bag up into the cost for 1 kilo, I’ll divide $30 by 25, which gives me $1.20 a kilo. My recipe is calling for 1.5 kilos, which will cost me $1.80 per batch of bread.

Yeast, I’m using 40g, so let’s say that a 500g pack of dried yeast is $4.80 just to make things tricky. Then following the same principle as before, it accumulates to $0.38 for my 40g of yeast. All I have done here is divided $4.80 by 5, then divided it again by 10, then again by 10, then multiplied that 10 grams by 4. I am far from kosher and I had been led to believe that this little way of calculating is a little different from the norm, but it gets the result, which is all we need!

I really cant be stuffed breaking down the salt, sugar and the Monte D Oro for you, but let’s just pretend it’s a combined $0.15 for the 100ml of oil, 20g of salt and 20g of sugar. I’m not working out what your 1100ml of water is, so just put that shit into your overheads.

So we’re looking at $1.80 for flour, $0.38 for yeast and $0.15 for the other stuff. That’s a combined $2.33 for your bread dough. Let’s break it into three loafs at $0.78 a pop.

From each of the three loaves, we’re looking at say 4 serves, which is $0.19 each.

So two free range eggs on toast with a couple of slices of house baked bread is $1.19 a serve. Market value on this gear is about $12, but I’m gonna charge $9.90 a serve.

Using my old Tas Tafe formula we’re gonna take our food costs of $1.19, then multiply it by 100, then divide it by your sale price of $9.90, which gives you a food costs percentage of 12.02%.

The majority of employers that I have liaised with about this lingo have generally only looked at it from a pure profit percentage, which for this is around the 900% mark.

Your chef is looking at thirty minutes max of total prep or knead time if you like, so at $30 an hour, he’s cost us $15 to make this bread at a wage cost percentage of under 10% if you sell all 12 serves.

I have always felt that one of the big reasons I have seen so many restaurants and cafes struggle, is by only calculating profits in planning and real time. It’s a greedy way of looking at it in my mind!

One of the best bits of advice I have ever gotten was from a small café owner in the Whitsundays. These guys would make the majority of their profit during the summer, then sit on it for the next 12 months to get them through the slower seasons. At the end of the next silly season, whatever was left from the previous summer, would then be counted as their profit!

I have always considered winter time in Tasmania as the Restaurant Dead Zone. Too many places go out and get fuck eyed and blow all the money they’ve made during the peak season, whilst forgetting that most of the population hibernates down here in winter time!

Restaurants do not have the same turnover over each month of the year. There are busy seasons and slow seasons and you need to plan for both!

Overheads

I have always had a plan to pay my electricity bill in small amounts every week, yet have constantly failed to deliver on those plans! Then when the bill rolls in I’m broke as fuck for a week or two and I’ve seen the same thing time and time again in restaurant or Cafe environments!

I haven’t been an owner of an establishment in my existence, apart from selling kiss biscuits and mowing lawns as a grommet, so I’ve got no idea what it’s like to have to pay bills in a restaurant on time, yet if we go back to what I rolled out before, having a ‘business plan’ that enables you to strategize your gas, electricity, superannuation (if you ask me), insurance, wastage, stationary, washing and all the other random shit you have to pay for as you build your little empire will solve this issue!

As I’m limited in my experience of paying bills in an establishment, here is some dribble from my diploma of management. Just a few principles to keep in mind when tasked with such an endeavour.

Explain the following basic accounting principles and techniques involved in-
• Budgeting- the main principle with a budget is to have a plan. By having clear and targeted goals set out in a plan, budgets should be achievable. The main way to achieve this is to have all relevant heads of department involved and clearly informed of the roles they need to play in order achieve the budget targets. There are many types of budgets, and in order to achieve most budget targets, they must be realistic and not optimistic.
• Cash flows- The main technique when dealing with cash flows is to have a well organised system. Good record keeping and clear instructions are basic principles when dealing with cash flows. Z reads and charge codes are great ways to record all cash flows in any hospitality establishment.
• Electronic spread sheets- Electronic spread sheets are computer generated programs which allow company’s and senior managers to build budgets and financial plans. Senior staff update these spread sheets regularly. It is essential these documents are accurate. Companies do fictorial budgets for a month, ½ year or full year based on previous accrual budgets and market research. They then compare them to the corresponding accrual budgets. This whole process is much easier using electronic spread sheets. These spread sheets can be filled in daily and constant comparisons can be done to ensure everything goes to plan. The spread sheets can be set up so complex mathematical equations can be worked out automatically.
• GST- when dealing with GST we are required to submit a BAS (business activity statement) on a quarterly, half year or yearly basis depending on our business arrangements with the ATO. This whole process is done with our accountants at head office. Good record keeping would be essential to ensuring accurate GST is paid on our business operations.
• Ledgers and financial statements- creating trend lines for key items in the financial statements over multiple time periods, to gain insight into how a company is performing. The typical trend lines are usually for revenue, gross margin, net profit, cash, accounts receivable and debt.
Another way is through proportion analysis. This is an array of ratios that are available for discerning the relationship between the sizes various accounts in the financial statements. For example you can measure your company’s debt to equity ratio to determine if you have taken on too much debt. These are usually listed on income statements, equity account statements and other similar accounts.

• Profit and loss statements- this is done by subtracting expenses from revenue. The main method for this process is the cash method and the accrual method. I.R.S. rules govern these methods to ensure accurate reporting for tax methods.
In a lot of cases tax can be claimed back from goods lost so accurate records of lost goods is important.

If you want to get serious with this kind of jargon, then ensuring you have someone with great number skills is vital and that they have the time and resources to pull it off!

In general though, the majority of little cafes, restaurants and bistros just don’t have the turnover to justify and maintain intricate systems like the one we’re talking about here.

Any business owner should have some sort of structured plan in place for their overheads, its as simple as that!

Profit

This word is like an instant noose around the other three areas necks!
You need to spend money to make money! Every last one of us is trying to turn $10 dollars into $50, or in this scenario, around $900,000 into $1 million big ones!

$100k profit seems pretty reasonable, especially if you’re really smart and assume the head chef role, like I had planned to on one occasion.

Let’s say this plan is set in motion, and I am the restaurant owner as well as collecting the $75k head chef wage that’s been budgeted for. That’s $175k coming my way, provided few of the many uncontrollable setbacks are kept at bay.

What you’re actually trying to do, officially or unofficially, is reduce the amount of spending in other areas to appease the owner’s goal of making more profit! If I was to reduce wage costs by 5%, overheads by 10% then food costs by 5%, then that’s an extra 20% profit, or just to get you a little bit crazy eyed, $200k!

What I have come to realize though whilst being head chef, is that the more you try to bring those three areas down, the more vulnerable those other areas become to having dramas!

You could reduce wage costs by taking out the sous chef but then your head chefs gonna burn out, you could reduce your food costs by 10% and start running some sloppy cuts of beef but then your customers are gonna start complaining and choose not to come back. Or you could choose to make your kitchen crew continue to use that dangy drop oven instead of going and seeing silver chef and getting them some proper working equipment on a payment plan. If you’re happy to burn your chefs out, use shit produce or have staff work with fossilized equipment, then you probably deserve to fail!

I completely understand that every business on the planet wants to make as much profit as they can, yet I doubt there would be many industries in the world that continue to savage their most prized commodity, their chefs, all in order to make an extra dollar! Fifty hour a week contracts with reasonable unpaid overtime is the norm in hospitality. The ombudsman begs to differ, yet your life can be made excruciatingly difficult if you feel the need to question these ethos!

I find the best way around this dilemma is to increase your revenue by creating specials from your profitable trimmings!

If you’ve got porterhouse on the menu, your gonna have about 20-30% of usable trim once you’ve clean it properly (if that’s your thang) which at market value is $20 a kilo for diced beef, that you have already costed into your steak dish with baby carrots.

Let’s say you put on a Beef Bourguignon, a classic beef stew, run it at $22 a pop with mash and pastry, sell all 12 serves, then get a return of $264! All you have really paid for is your aromatic veg and herbs, the mash and the puff pastry, plus some Muppet to get it brewing in say 30 minutes. It’s for the most part already costed into the menu.

I have just spent the past 18 months running a specials board that changed every week, to do, for the most part, exactly what I have just written about- make some cash from randon usable trimings.

When I was a first and second year apprentice we were given the responsibility to run over to the shops most days to get fresh menu items as well as items to create specials.

As much as these dishes were not going to win any awards, I further developed a skill that enabled me to turn $30 into $150 and this has been the foundation of my near 20 year career. Despite blowing most of my pay check on drugs and alcohol at the time, I developed a really fearless way of creating food. The fact that we were like a family at Blue Café back then helped too, you always need positive encouragement when building food!

I have played around with a million different charts, costing sheets, analysis sheets etc, yet I have always found the best way to be just a pen, paper, calculator and some invoices to be the best was to cost and calculate monetary movements in a kitchen.

If you’re in a big hotel or restaurant chain then get your boss to salary you in a designated chef that has compulsive number tendencies!

Other wise you can check out http://www.capterra.com, they give a rating for the best hospitality software you can get.

I’m content with my calculator and scribble paper, plus I love counting shit, but if you need help there is plenty out there.

If you’re really keen and enjoyed my read, send me an email through my web page and I may be able to help you out.

Until next time, happy counting and enjoy the show.