Blog Archives

Restaurants to Face Higher Food Costs | WSJ.com

Drought Forces Restaurants to Face Higher Food Costs – WSJ.com.

This shouldn’t come as a surprise to any restaurant owner, but food costs are on their way up this year thanks to the drought and resulting decimation of the corn and other crops.

Advertisements

How To Interview and Hire New Workers – Restaurant Management (RMGT)

Here’s a good article from Restaurant Management Online on hiring for restaurant employees. I’m not sure I agree with the stated cost of losing an employee though. Those numbers seem exagerated to me. Either way, turnover sucks and this article has some great tips to help reduce turnover, including advice on what questions to ask in an interview. Feel free to comment on our blog about questions and tactics you’ve found useful in your interview process.

How To Interview and Hire New Workers – Restaurant Management (RMGT).

www.bodellconsulting.com

Craft brewers toast another year of growth | SmartBlogs

Here’s another great article linked below reinforcing the need for you as restaurant owners and food service professionals to take a look in your local market to see what farmers and other local companies you can incorporate into your business. Locally sourced food is no longer a “trend”, it is a full fledged “consumer demand”. It’s only a matter if time before it becomes an expectation for your business.

Craft brewers toast another year of growth | SmartBlogs

For ideas on how to utilize local foods in your menu, visit www.bodellconsulting.com and contact us.

Catering without a commercial kitchen

Canapes by Dino De LucaMy friends all tell me how great my dinners are, so I decided I’d start a catering company.”

Typical inspiration for starting a catering company. Now what?

Maybe the most important question that would-be caterers don’t think through completely before starting a catering company is, “Where will I prepare my food?” Seems like an obvious question, doesn’t it? In truth, all start up caterers probably do ask themselves this question, but all too often their answer is to prepare food in their own kitchen and transport it to the site. “What’s wrong with that,” you say?

According to the health department in most states (all that I’m aware of, but I admittedly have not researched it), it is not safe to sell food prepared in a kitchen that has not been inspected and licensed by your health department. At least, it’s not legal. Health departments require restaurants and caterers to operate kitchens that are equipped with NSF approved equipment, meet certain electrical and plumbing requirements, and all food safety codes concerning everything from shelf heights to cooler temperatures. Simply put, a standard home kitchen won’t do.

Many start up caterers seem to have no qualms about breaking the law, or at least are ignorant of it, so what does a conscientious citizen who wants to abide by the law do if they want to start up a catering company but don’t have the funds to lease a commercial kitchen right off the bat?

In the past, caterers looking to abide by health department rules needed to borrow/rent a kitchen from a restaurant or church to prepare their food in. Churches are great partners for this, as their kitchens are rarely used and often pretty big. Restaurants with space to rent are a little harder to come by. They have to work around their own business to let someone else come in and prepare food. Sometimes you can find a breakfast and lunch spot that will allow you to use the space at night, or occasionally you can find a restaurant with such a large kitchen they just have space to spare.

If you are asking this same question for yourself because you are wanting to start a catering company, then today is your lucky day. Just today, I happened upon a growing movement that I was previously unaware of. Small business conscious communities are finding facilities to offer something called “incubator kitchens” or “culinary incubators” to small business owners who need kitchen space to prepare food for parties, or produce and package food for retail sales (this usually requires additional licensing). Some even have space availabe to rent for parties and events, making them essentially “banquet halls” with open food policies.

These culinary incubators charge low hourly rates to business owners to rent space to prepare food in a safe, compliant, licensed kitchen. One such kitchen in my own city only charges $15 per hour to rent. Many of these kitchens are located inside non-profit business development centers that are not looking to make money, but rather to foster small business growth.

While it’s still a great option for a caterer to borrow a church kitchen in exchange for a percentage contribution from the sale of their food, these new incubator kitchens sound like an incredible idea that could help a lot of new caterers get their business started with very little cash outlay. To help you try and locate one, here is a map of incubator kitchens all over the country from culinaryincubator.com. If you don’t find one on here near you, don’t give up, Google “culinary incubator” and “incubator kitchen” in your area to see if there is one near you.

Brandon O’Dell
O’Dell Restaurant Consulting

www.bodellconsulting.com
blog.bodellconsulting.com

A look at today’s consumer | Nation’s Restaurant News

An article about restaurant consumer demographic data from the National Restaurant Association’s Annual Report. Make sure to read all the pages…

A look at today’s consumer | Nation's Restaurant News.

There’s no better time than now to remember the old adage that the customer is always right

Great article by Roy Bergold via QSRMagazine.com

There’s no better time than now to remember the old adage that the customer is always right.

Keeping it simple: How to create a restaurant concept that can succeed

High failure rates for restaurants. Yes they’re exagerated, but they’re still high. According to recent studies from Cornell and Ohio State universities, 59-60% of restaurants fail within the first three years. As many as 75% may fail within the first five. Why are they so high? For a list of the six biggest reasons, see The biggest mistakes restaurants make, and why they have a high failure rate.

For the purpose of this article, I’m going to talk about a key fundamental in restaurant concept design, keeping it simple.

Big menus with too many items, oversized dining rooms, multi-ingredient dishes, huge liquor selections and wine lists and over decorating. They’re all symptoms of the same problem, overcomplicating your concept.

As a restaurateur, you may find yourself getting bored with traditional menu items. For you, eating in a restaurant might need to be an adventure. You may have to see or try something you’ve never seen before to be impressed. Very well. I’m the same way.

This may be the underlying factor in why restaurant owners routinely go overboard when designing their concepts. They push their own sensibilities on the general public, not realizing that their tastes are the exception to the rule, and not indicative of the tastes of the public at large. Restaurateurs think they need to present every dish possible to make out of the ingredients they already carry. They think carrying 15 scotches instead of 5 will earn them more customers. If you have a larger selection, you’ll appeal to more people, right? Wrong.

Trying to please everyone leaves you unable to be defined. When you have too many colors in your decor, too many styles of fixtures and furniture, and menu items that represent too many styles of cuisine, your customers find it harder to describe you and recommend you. You find it harder to manage your business effectively and market your brand. You’re trying to stand for too many things at once. Cut out all the extras and keep it simple.

Here’s a short list of things you can do to keep your concept simple.

Choose two contrasting but complementary colors to design your concept around. You may use a third neutral color for accenting, but stay away from unneeded detail and too many extra colors in your scheme. To create a solid brand, you need to be more than attractive, you need to be memorable, and that means keeping your color scheme simple. Use these colors to design your logo, signage, marketing, and to decorate the inside and outside of your restaurant.

Keep your menu small. This serves many purposes, some of which are outlined in my article, Creating a manageable menu. A small menu is easier to control costs on, easier to prepare and order for, and easier to provide consistency with. By having a small menu, your service will be faster, your food quality will be better, and you’ll make more money. Keep your menu simple.

Keep your dining room simple. Smaller dining rooms are easier to manage. If you’re thinking of opening your first restaurant, don’t build a huge dining room with 200 seats. A large dining room takes a large management staff and lots of employees to run. If you find that your 80 seat restaurant gets full every night, then build another one. Don’t worry that you’re not building it big enough.

Keep your market simple. Don’t convince yourself that you want all people of all demographics to like your business. It’s not going to happen. By going after “everyone”, you’ll end up with no one. Even if your style of cooking has mass appeal, your location will determine who is most likely to come into your restaurant. Identify those person’s age, income level, sex, marital status and religion. They are your target market whether you like it or not. If your concept doesn’t appeal to the people in your area, then you don’t have a feasible concept and you aren’t likely to succeed. Keep your demographic simple and focused. For more on identifying your target market, read this article.

Keep your menu dishes simple. When you have too many ingredients, and/or too many touches that need to be made to the dish after it’s ordered, before it goes out, you slow down the production of your food. A ticket will only go out as fast as it’s slowest dish. Keep your food simple and easy to produce. Let the ingredients be the stars and don’t lose them in a mish mash of flavors.

Don’t try to carry every liquor any possible customer could want. If you don’t have Glen Fiddich, but you do have five other single malt scotches, any reasonable customer is not going to overlook your restaurant next time because you don’t carry their particular brand, and for the one in 1000 customers who will, so what. It is more important for you to have a manageable inventory and a selection small enough for your staff to become knowledgable on than it is to try and please every customer’s sense of taste. I’ve got a secret for you. Even if you carry 30 different vodkas, you’ll still end up with someone requesting one you don’t have. Keep your liquor and wine selection simple.

While this is the end of this short list, it’s not the end of the application of this fundamental philosophy of restaurant concept design. Any time you have the opportunity to simplify your concept, take it. You’ll end up with something that is simpler to manage, simpler to market, and simpler to turn a profit with.

Brandon O’Dell
O’Dell Restaurant Consulting
(888) 571-9068
brandon@bodellconsulting.com
www.bodellconsulting.com

Is it a good idea to shrink our Italian restaurant’s menu by 15-30%?

We currently have 60 entrees and 24 soup/salad/apps. We are known for our pizza, so we have a full pizza section which includes 6 sizes, 2 types of dough, 33 toppings, calzones, strombolis, 6 specialty pizzas, 7 sandwiches, beer, wine, and standard beverages.Which is better, 50 items or 100?

If you ask me, you need to eliminate 2/3rds of your menu. Big menus mean big waste, big inventory, big kitchen staff, big cost control issues, big ticket times and big confusion for your customers.

One thing to keep in mind with a restaurant. You are only ever going to be as profitable as your peak dining periods. Meaning….  when you have a large menu, you can not serve as many customers in any given period of time. With a large menu, people take longer to order. Big menus clutter POS’s, making the average time to input a ticket longer. They mean more prep for the kitchen, resulting in more kitchen employees in earlier to prep, and more employees on the line to produce too many different types of food. Even with more employees on the line, it takes longer to produce food when you have less multiple orders of the same items being made at the same time. All this extra time means you can’t serve as many people during your peak periods, which is where 80-90% of your revenue, and 100% of your profit is made. If you can increase your customer counts during peak periods by 10%, then you can increase your profit by more than 10%.

From a customer viewpoint, more choices doesn’t mean you’ll get more regulars because you have so much to choose from that people will keep coming back to try everything. That is a huge misnomer among owners and managers, that perpetuates the use of large, inefficient menus. More choices on a menu for customers means more confusion about who you are, what your specialities are, and why they should like you better than the Italian restaurant down the road.

Simply put, more choices isn’t better for business, it’s worse.

As far as what’s better, 50 items or 100? Neither. They’re both way too many. If you want to be known for having great food, you need to have a limited number of items, that stand out to people each on their own merit. If you have 4 or 5 great menu items that stand out from your others, people may remember them if there are only 10 or 15 surrounding them. If you bury them under 60 other items, people are less likely to remember what it was they had that was so great, and they’ll be less equipped to sell their friends on how great your food is. Confusing your customers isn’t good for business.

Stripping down a menu isn’t hard to do. The hardest part is convincing yourself it’s a good idea when you believe that more=better. Simply take your sales mix report, and eliminate most the items on the bottom half of your report that aren’t selling as much. Within the top half, keep all your top sellers, then make a list of what kitchen station those items are prepared in, saute, grill, fry, cold, etc. Use your top sellers, and a selection of the rest of the items you haven’t already eliminated to create a menu that balances your menu between each of your production stations. When you finish, I would suggest having NO MORE than 20 main course dishes, including sandwiches (10-15 would be better, I would eliminate the sandwiches altogether), 4-6 starters and 2-3 salads. If you are known for your pizza, then pizza should maybe make up 2/3rds of your main course selections. 6 sizes of pizzza is ridiculous though. Any more than 3 is complicating things unnecessarily. You could even think about going to only 1 individual adult size, and 1 individual kid size. This, and eliminating the sandwiches on your menu would greatly increase your average gross profit per item sold.

Stop worrying about trying to be everything to all your customers. While you should still accomodate special requests if possible, you should make sure you are charging a special price for that accomodation, and you also shouldn’t be encouraging them. Your servers and your kitchen staff don’t like it, regardless of what they tell you. It makes their job harder. If you cut your menu down, you are more likely to gain new customers, than to lose old ones. Take this statement to heart, THERE IS NO CUSTOMER OF YOURS THAT ORDERS ALL 60-80 MENU ITEMS. They WILL NOT be dissapointed enough about losing a few options to quit dining with you, especially if they are regulars, and especially if you train your staff to explain that your reduction in choices helps you give them better food, better service, and serve more people.

Discourage the ordering of those old menu items, clean up your POS, simplify your training, and make your operation capable of serving more people during your peak times. Your employees and your pocketbook will thank you.

Does this franchise restaurant have too high of food costs?

Is the cost of food and supplies less when you own a franchise because of their buying power, or the same, or even more because of kick-backs from suppliers?

The franchise I am looking at shows cost of goods to be from 34% – 38%.
This sounds a little high to me. Is this what the norm is in this industry?

It all depends on the menu and prices. If you’re evaluating a potential franchise purchase, the food cost percentage is the last thing you should be worried about. Percentages don’t equal profit.

You should be concentrating more on the average profit and investment, how large the investment is, how fast that profit will earn back your investment, and whether that profit makes the investment worth your time.

Franchises do normally have increased buying power. Whether that results in a lower food cost percentage depends on the pricing, not the purchasing.

There is no “norm” for the industry. Some operations make a profit with 45% food costs, some need to be under 20%. Achieving either one doesn’t mean either will even make a profit. The profit is made with the money that is left over AFTER you pay for the food. While operating efficiently, and not wasting product is important to profit, the importance of running a particular food cost percentage is grossly overstated in the restaurant business.

%d bloggers like this: