During a recent discussion with a restaurant franchisee, the issue of profitability came up. As he put it, the restaurant business has three basic levers that the owner/management can control: food sales, food costs, and labor costs. I call these the trifecta of restaurant profitability since you simultaneously need to get all three correct. (Ok, food and labor costs are prime costs, so technically it should be called exacta or perfecta of restaurant profitability. I wouldn’t describe most restaurants as exact or perfect. So I went with trifecta.)
These are so important, but when was the last time you looked at them in your restaurant?
Here’s a simple suggestion for each to get you started.
- Food Costs
Create a simple sheet that tracks throwaways daily. The restaurant franchisee found $75 a day in savings here.
- Labor Costs
Pick a day of the week and look at the staffing verses the sales. Is there an extra hand here?
- Food Sales
Pick the five most popular items on your menu. Does your wait staff consistency upsell add-ons for these entrees (assuming it makes sense)?
P.S. We are working on a product to make the management of the trifecta much easier. More on that in 2013.