+6.022x10^23

Lets get this going again....

apocalypse_fives

Whats your opinion on the cook-it-yourself-restaurants? Not the korean bbq shabu shabu or any other asian cuisine places.

Ive been to one in hawaii that had quality fish and steak, and Ive been to 2 in australia that were german themed and had brauts, dogs steaks and burgers.

Seems like labor costs would be reduced which couldnt hurt and entertainment value is there as well. execution and marketing im sure are key (as with any other restaurant).

I'd be interested to hear your thoughts.

Is there a software you recommend where you can input all your standardized recipes & food costs to help analyze the cost of the product by serving as well as being a centralized database for all recipes?

Also, can it select say 8 of the recipes for a given night's/weeks service and have it produce a list of all ingredients that need to be purchased?

As always, ty for for your replies

PS, I am aware of ChefTec, is that the best software out there?

Sorry for the delay in responding your q's the thread. Have been engaged by high stakes pro/2+2'er on a restaurant project. That project, other work (most of it on hold) & life have monopolized most of my time. I will check with client to see what, if any, details they are ok with me posting in the thread. If you pm'd me & I have not yet replied, I will try to clear out all private messages this weekend.

Most anyone who has drilled to this level of detail has done so with a spreadsheet they built themselves or borrowed from another operator. I have never used any of the shelf stuff so I can't comment on cheftec or likewise. Everything I use/used is custom.

I wouldn't be so intrigued by the presumed savings in labor. I don't have much time to get into the details, but these type of operations generally have significantly higher build-out & operating costs. Have visited a few & none have been that much cheaper, most are more expensive.

Customers are very good at doing two things & they do it intuitively. #1 maintain a list of restaurants in their head that they draw from when necessary. Your goal as an operator is to get on that list via trial & stay on that list via #2 operations & price/value equation. Customers are constantly solving for this in their head. It's imperfect, they draw innacurate conclusions & like most people, often just act on impulse, but for the most part they do it pretty ok. They get a little fuzzy around the edges though, like soft-drink pricing for example.

The concepts you speak of are a combo of bread & circus, with a focus more on circus then bread. This works ok in tourist spots, resorts, major vaca destinations etc... but not that well in most other markets.

Creating,designing, building-out & operating is no easy task & not something you should take on without lots of experience & lots & lots of money...lots.

This one? http://forumserver.twoplustwo.com/29...urant-1150604/

As always, thanks for all the time you've put into this thread.

Do you think its important to take it to this level of detail?

None of the chefs I'm working for cost out or even have detailed printed copies of all their recipes. They write them down in notebooks where pages get torn out, stained from food and have all kinds of notes and other ingredients haphazardly written on the same page. Most of the recipes are in their head, so I'm taking time away from work to write as many down as I can get from them, print them off, put them in plastic sleeves and inside a 3-ring binder. I'm using Numbers on my Ipad but thought there might be something better before I get too deep inputting the info into the wrong program.

They don't appear to use PO's for anything as there is never anything to compare to when we receive deliveries.

Is it impractical to use PO's? Everyone seems so busy, it appears they are crisis managing everything, but then again I'm not in management meetings. I asked the owner if they tried to cost out recipes and he laughed and basically implied it was futile. They own several restaurants that are very popular, serve great food and by all appearances are doing well financially, so I'm starting to wonder if trying to be as organized as I would be inclined to be is a waste of time and not practical in the real world.

Wow incredible thread. Thanks for all the answers. I just read through it and it's so informative.

I might have a question for you soon if things go well.

@yimyammer. Restaurants are a business. A business runs off the P&L. P&L is informed by costs. I think most of this has been addressed elsewhere in the thread. You are making a project out of just one component of operations. This isn't where you want to expend your energy. Writing the connecting passages between the silos of info is the complex part & where you need to spend your time, not trying to determine if there is value in knowing what the cost of producing a menu item is. There is, so know it.

Do you think its important to take it to this level of detail?
Absolutely. AINEC. You need to know what your ideal cost is (let's leave out labor for a minute) in the production of every menu item. Without these numbers your menu pricing (and to some extent pricing strategy) is just a guessing game. When you build-out a restaurant your essentially building a factory that produces finished menu items on demand. When you achieve complete command of each step in the process you can focus on managing the gaps, increasing throughput & decision-making. How many well run manufacturing businesses don't know the exact costs of producing their widgets? This is NL5, ABC, nuts & bolts, level zero restaurant ops. You can't approach the trickier aspects until you have this part under control. There are spots in a restaurant where you just have to be “good enough” & this is not one of them.

None of the chefs I'm working for cost out or even have detailed printed copies of all their recipes. They write them down in notebooks where pages get torn out, stained from food and have all kinds of notes and other ingredients haphazardly written on the same page. Most of the recipes are in their head, so I'm taking time away from work to write as many down as I can get from them, print them off, put them in plastic sleeves and inside a 3-ring binder. I'm using Numbers on my Ipad but thought there might be something better before I get too deep inputting the info into the wrong program.
Not surprising & very common. Every good chef I know has this put together. There is a diff between someone who can cook a bit & someone who can command & run a kitchen. Spreadsheet is fine assuming the data is good, the measurements are precise and it's not just a garbage in/garbage out exercise.

They don't appear to use PO's for anything as there is never anything to compare to when we receive deliveries.
Not good. You need to reconcile your order against the actual delivery. Shipments can be mis-picked or short-shipped. Purveyors will frequently ship replacement goods. Are we setting up a system where only one person can correctly check in an order? And is that check in based upon the strength of their memory or a document that spells out what the incoming load is? The work-around is to over-order & put your money on the shelves & in the coolers instead of in the bank where it belongs. Makes it easier for employees to steal (if they are thieves) and be wasteful if they don't have any heart. You start to rely on frozen prepared goods instead of working from the raw because you can't manage spoilage & waste. Do you see the connection of how that starts impacting what you actually menu in your place? How seriously does the owner take the business of the kitchen? Does the chef have a small space outside (or inside) the kitchen, some shelter from the storm, where he/she can place orders, phone purveyors, speak with employees, input inventory, manage prep lists, exhale, etc...?

Is it impractical to use PO's? Everyone seems so busy, it appears they are crisis managing everything, but then again I'm not in management meetings. I asked the owner if they tried to cost out recipes and he laughed and basically implied it was futile. They own several restaurants that are very popular, serve great food and by all appearances are doing well financially, so I'm starting to wonder if trying to be as organized as I would be inclined to be is a waste of time and not practical in the real world.
No. When you own or operate you can either set the standard of operations or arrive at the same via what your employees choose to do or not do. Under which set of conditions do you think it would be easier to cycle in new employees? A kitchen that is well organized, with standardized recipe cards, prep sheets and pars (for example) or one where all the IP sits in the skull of an employee (or operator)? The ultimate goal of any system is to take decisions out of the hands of employees. If you want to transmit a consistent message to your customers, then first set the exact message then make sure it doesn't get corrupted moving from point a to point b. Are you assuming that when you open a new place you will be in same spot as an established operator? You won't. They probably have some sense of their costs from brute force—executing the same items thousands of times, seeing tons of invoices, etc..etc.. That's not the case when you open.

Thank you sir, I'm working my way through the old posts as time permits.

Sounds like I'm thinking about things in approximately the right way, eh? The thing is, I'm just a low man on the totem pole and they aren't asking my opinion, nor am I privy to P&L's or in on management meetings. I'm just observing things and trying to help in any way I can. At this point I'm just a chefs assistant and help do lots of prep work and prepare some of the food. When they started handing me the rough recipes written haphazardly on notebook paper, I decided to re-write them using a spreadsheet program so they would be legible and accurate to what the chefs wanted so I could just work off of them instead of constantly baraging them with questions. As I was doing this I started thinking it would be a lot easier if there was a module available on their POS system where I could also pull cost data from their supliers that would allow the recipe to be costed out at the same time I write it, so I brought that up with one of the owners and got the response I mentioned.

I've only been their a month, so I think I'll have to do this on my own and present my costed recipes and then see if they would like me to do this with all their recipes. I'm not sure they know what to make of a semi-retired CPA that built houses for 20 years working for $9 dollars/hour. It almost seems like they look at me with a weary eye as if I am up to something when in reality all I am trying to do is be helpful and the most productive and efficient I can be. Hopefully over time I can take your advice and attempt to win them over to do some of your suggestions. Its not my restaurant, so I really have no ability to force anything to happen.

They seem to appreciate the fact I've written up the recipes, work hard and care and they like that I have started to set up pars related to the recipes I prepare, so perhaps if I continue to submit useful information in an easy to read, usable format, then they may realize I dont have any ulterior motives other than maximizing efficiency and bringing all the skills I have to the table.

You wrote:

Since I dont have access to P&L's and the job I have been hired to do is help the chefs prepare whatever they want me to work on (presently making an array of sausages, grinding beef for hamburger, making stocks, prepping mirepoix, breaking down sides of beef, trimming pork and beef cheeks, making brines, etc, etc, etc), I'm really not in a position to choose where I spend my energy. I just took it upon myself on my off time to standardize the work they are giving me by writing down their recipes and procedures and creating a notebook that I or anyone who takes my place can refer to when performing these tasks. My efforts to go beyond this have been stymied by the owner who basically said it was impractical and a waste of time.

Now that you know this, where should I be spending my time? I'm not sure what you meant in statement I quoted.

If it was my restaurant, I would have PO's, costed recipes, standardized recipes and procedures. I explained how costed recipes that could access the cost data from the POS system could help them plan, order materials, manage stock, cost out the portion cost and determine a menu price for a variety of desired margins and he looked at me a little foggy eyed and I had to re-explain what all of this meant. This guy is a great chef, he worked at Craft in New york for 5 years and was the executive chef at Craft Dallas for several years. Are you surprised that I am having to bring this up to him?

If you want to know the place I work at, I can PM you the info. Its a two-part business: a restaurant and a market (like eatzis that prepares to go items, has an array of locally made products, organic fruit and vegetables, etc). Because the kitchen is so small at the restaurant, we do a lot of prep work for the restaurant in the Market since its a much bigger kitchen with a large walk-in and stock room.

I was a real jackass for thinking something like this could work, Sprinkles must be nuts too (or maybe someone in the company has been following this thread):

Sorry for the slow reply, open to either recycling an existing space or a fresh build out. No experience at all, this isn't something I'm about to jump into any time soon by myself, but certainly an idea for the future. Would I be right in estimating somewhere in the ballpark of 100-250k US start up costs?


Another question about something else, how is your knowledge of juice/smoothie bars? How profitable are these, am I right in estimating the start up costs of one of these potentially being very low?

What kind of restaurant do you have in mind?

I don't have any direct experience with juice/smoothie bars, have never priced out the products & don't know what type of margins they are running. If I was pursuing one, I would be especially sensitive to location & be would willing to accept the trade-off of taking a smaller physical space in exchange for a premier location. I'm looking for lots & lots of foot traffic.

When building out a restaurant some of the biggest individual costs are acquiring a liquor license (purchase in secondary market & soft costs (legal) required for the transfer) mechanicals such as compensating hood system, hvac & fire protection. You will require neither of these for a juice/smoothie bar, so yes the build-out could be considerably less. That said, I have spoken with operators who have spent considerably more then a restaurant build-out when they opened a novelty shop like ice cream or yogurt, for example. So the opportunity to open for much less exists, but it requires the operator knowing what he is doing as well.

hi,

great thread, will take the time to read through everything -

I'm university educated, played poker for 6+ years now, have some limited experience with running a restaurant on the floor side (as in I never dealt with kitchen crew, deliveries etc) but managed the waiters, dealt with customer relations and I can go behind the bar just fine. Right now I'm thinking of buying a place that's fairly simple and profitable as I've long since realised the well of "inspiration" to stay on top of poker is running pretty much empty.

The thing is this - I've no real vision or heart-felt committment to the hospitality industry, basically all I want ultimately is a profitable operation that can stand alone without my input as a source of passive income in due time. I learn things quickly, is emotionally stable and take basic pride in being competent. I have a fairly basic belief in delivering a quality product that captures and retains its customer base, but I'll never one of those guys that go to remote parts of Indonesia to source their coffee or similar things as I just don't have the much passion for it.

Is there any general advice you would give me or wish you received yourself before you started in the industry?

Are there any red flags to watch out for if an owner is selling a cafe/restaurant thats less than a year old and have only provided sales figures for December to the business broker? In Australia December occurs during summer and coincides with Xmas, making it the busiest month for most restaurants.

The figures are very robust, with about a 40/60 split of revenue between coffee/beverages and food.

The business broker reports that the reason for selling is that the owner is overwhelmed with operating two different places, however I'm weary that the figures reported ocurred when the cafe was experiencing "lets try the new place" sales during the seasonally busiest month of year, which will be unsustainable if I take over.

I haven't received full details yet of its more current revenue, staff costs and other expenses so just want a general idea of what signs I should look out for of the owner trying to pull a fast one. Rent is very acceptable at <5% of revenue and based on the figures provided the margin including owners labor is ~30%.

Thanks, the restaurant I was referring to at the start was a gourmet burger type restaurant.

I was thinking much along the same lines with the Smoothie/Juice bar. The ones I recall seeing in Australia and New Zealand are very small and provide little seating. I think juices/smoothies are something most people take away to drink while they're shopping, walking, driving, at the beach etc (much like ice cream/yoghurts). I have an area in mind with a lot of foot traffic (I found out some Ice Cream sales figures for this area in Summer from a friend of a friend and they were mind blowing), now need to find the right sort of location in that area and see what that's going to cost to lease.

I should be able to make some pretty reasonable estimations of margins myself by playing round with a blender, some fruit and yoghurt etc. I think some pretty good margins can be achieved based on retail prices of fruit and veg here (in Spain). Very cheap compared to the other countries I've been in recently (NZ, Aus, UK).

Hello A5, I thoroughly enjoyed this thread.

I'd like to talk about the pizza biz.

As a kid I worked in a very successful pizza place (still is, 15+ years later) that I think about a lot, because I am so enamored with the business model, and looking back there was one thing in particular that I am sure contributed to its success, and it was the keep-it-simple-stupid principle that you advocate, along with people like Gordon Ramsay; this place was walk up, by the slice, with only 3 selections. You get the plain cheese, pepperoni, or special of the day (bbq chicken one day, pesto tomato the next, etc). and that's it. The beverages? Standard fountain sodas, but ONE SIZE ONLY (I love this). There were combos with a slightly reduced price (2 slices and a soda for $7 or something).

The system ran very well, it was an assembly line in a galley style kitchen: A single guy at the very back made dough all day, a few feet away a single guy rolled them and put them on screens, a few feet away 2-3 people did the toppings, a single cook (me, often ) would just sweat in front of the oven which cooked 8-10 pizzas at a time, and just churned them out all day, where they were quickly brought to a midway station, sliced, brought to the front counter on a hot table wedged between two registers (this eventually became 4 registers and a wider table). This lack of customization and extremely narrow menu ensured that everything moved very fast, which I think was a necessity considering the long lines that formed out the door during peak periods. Once you got the the register, you could pay and walk out with your slice and drink in about 30 seconds, unless you were a finicky dope. All the cashiers were conditioned to burn through the customers as quickly as possible, it wasn't necessarily frowned upon to be a little loud/aggressive with them, warning that they needed to hurry, and for obvious reasons this made things fun for the kids working the register.

Someone could order a custom slice, and did occassionally, but it came at a premium price, which was good because I believe it discouraged this bottleneck in the operation--it was a violation of the business' basic principle of total simplicity, and I actually think that custom slices were not profitable for the company (it created inefficiencies for the cook).

They also sold whole pies, at more industry standard prices. But again, most of the sales were walk up slices.

The pizza itself was good imo, but nothing spectacular or innovative. But I am fairly sure they were doing daily sales of something like 10K+ during the week and possibly double that Fri-Sun when the shoppers and tourists were in full force.

I would like to add that this place was/is in a prime spot in the heart of a tourist/shopping area, and the foot traffic is pretty much non-stop. I am not denying that this has a lot to do with the success, but imo the model is great and must be a major factor. I always imagined that if I were ever to open a food biz, I would replicate this as best as I could. I realize of course that a densely packed location of this variety is crucial to make it work.

Do you have any opinions at all on pizza? Like, your thoughts on slices versus whole pies, delivery versus take-out only, ideal demographic/location specifics (eg. I assume college kids can/will eat pizza 4 times a week, where as mature adults will not = college town crucial).

And, profit margins? Just talking ingredients for pizza (which seem insignifigant to me; flour, water, yeast, tomato puree, mozza, lol). My instinct tells me this can (or should) be a high margin business as far as food service goes. Nowadays, at least in the city I live in, you will pay $4-$5 bucks a slice, which means $32-$40 per whole pie which, if I am not mistaken, equals a huge margin of profit.

Would love any comments or thoughts you have, anything at all.

I would recommend you first visit as many smoothie/juice shops as you can,collect their menus & look at their retail pricing before trying to estimate margins. This includes locations in & out of the area you are looking at. You want retail pricing & portion size. That's exactly where I would be start.

There are plenty of red flags & some of them have been noted in the thread. Have a look and post any questions. Don't put too much faith in what the business broker tells you. Your interests are not aligned. Start with getting the financials & then go from there.

Nice post & your pretty close to right on most of it. I know the segment pretty well so feel free to post any specific questions. I'll post a few general thoughts when I get some time this weekend.

Thanks, I was planning on doing exactly that if I was to move further forward with the idea. There's nothing really at all of the type of thing I'm looking to open in the entire city(which is why I like the idea a lot), and barely any in the entire country that I know of. So instead I will make a trip over to London where there are loads of juice/smoothie bars and try to visit a lot there and copy what I think what works well for them, look at menu's and pricing etc and see how much i can learn from staff there such as what equipment they're using for blending and juicing etc.

.

i know this was over a year ago so you've obviously forgotten, but do you mind going back to this and expanding on it? how to leverage your business, how to get the best possible prime vendor agreement, etc.