The restaurant business is built on very narrow margins. We are constantly faced with decisions that nip away at the pennies that operators try to make on every dollar in sales. Let’s look at some basic facts that have placed us in this position:
* We deal with highly perishable raw materials
* Many restaurants have succumbed to the feeling that bigger is always better
* If we are concerned with quality, then labor cost will be looming very large
* Many restaurants have also fallen victim to the belief that in order to satisfy customers they must adhere to a list of menu items that are extremely costly to the operation
* With rare exception, there is a ceiling to what we can charge for the items we produce
* Waste, theft and spoilage are curve balls that seem to always cross the plate (no pun intended)
* Even with a plethora of culinary school graduates on the market, the majority of restaurant cooks are technicians trained to follow steps rather than express themselves through cooking. This requires the operation to plan menu items that are easy for technicians to execute consistently.
So, all of this being said, even the noblest restaurateur must realize that they are in business and will only remain in business if they are profitable. I have been around so many chefs and restaurant owners who work incredibly hard, producing very good food, keeping customers happy, only to lose money. This is so discouraging to those involved and ultimately results in closure. How can restaurants make money?
The formula is not easy and the guarantees are never very solid, however, it would make sense to look at the menu first. The menu is the center of the business operation. Everything else: staffing, equipment, facilities, advertising, vendor selection, table top appointments and decor, marketing and advertising, and operational image are all based on the product design and delivery. How many restaurant menus are flush with items such as: Angus Filet Mignon, Foie Gras, Morels and Fresh Chanterelles, Extra Virgin Olive Oil, Lobster, Crab, Pacific Halibut, Rack of Lamb, Fresh Berries in February, Asparagus out of season and Twenty-year old Balsamic Vinegar? Now, don’t get me wrong – I love all of these items and thoroughly enjoy eating them with reckless abandon. The fact is, they make it very difficult to make money. How many restaurants, after all, can charge the $45 they should for the 8 oz. Angus Filet or $30 for that Lump Crab Cake appetizer? There is a ceiling in pricing (with rare exception) and most restaurants are unable to price those items for profitability – yet they continue to put them on their menus, fill their dining rooms with eager guests who have come to expect that Fillet for $19.95 and would raise hell if the restaurant charged what they should.
As an aside, these items are built for technicians who can be trained to produce an item as expected, time and time again, but who more often than not are not trained to really cook. Please don’t take offense, I have great respect for that seasoned broiler cook who can grill steaks perfectly throughout the night, or the saute’ cook pan frying that beautiful crab cake to a crisp, golden brown and artistically placing it on a plate with remoulade and frisee. The problem is that neither item is destined to make a healthy profit unless you are buying sides, hanging them in your temperature/humidity controlled meat lockers, cutting your own steaks and grinding the beef, making gallons of stock every day, buying your shellfish dockside, picking the meat from shells and reducing the stock from shells for beautiful fumet.
Think about the restaurants that are consistently profitable (and delicious) and look at their menus: homemade pasta (flour and egg), braised meats (shoulder and shanks), artisan pizza (flour, water, salt and yeast), roast whole chicken (still a very reasonably priced product), sustainable, regional flat and round fish restaurants (haddock, cod, smelt, anchovies, bluefish, catfish, trout, flounder, etc.) that offer delicious fish broiled, sauteed, pan fried, and baked en papliotte. All of these restaurants plan menus that are driven by great raw materials that are seasonal, reasonably priced, and that beckon the talents of a person trained to cook and make in-expensive items taste expensive.
Look at your menu. Is it designed to use all of the ingredients that you buy (Chef Marc Meneau once told me that restaurants don’t make money on onions, they make money on the onion skins)? Are the items on your menu seasonal and only used when they are at their peak of freshness and lowest in price? Are your listed items driven from recipes that challenge cooks to draw flavors out from an understanding of proper cooking techniques? Is your staff trained to properly promote these exceptional items to guests who are typically focused on the high cost items that you cannot afford to sell? Are your plates balanced with a variety of vegetables, flavor accompaniments, and proteins that can stay within the 4-6 ounce range rather than 12 ounces or more? If the answer is no – then begin there. Profitability in restaurants is a science and an art, but it is most importantly a reflection on your understanding of the product and how to make flavor sell above familiarity and portion size.
More than 2/3 of the restaurants that open today will be closed in a year and the vast majority that survive year one will likely close in the next five years. Don’t be a statistic – start with a plan for profitability, select and train staff to nurture flavors, buy right and educate the guest through their palate.