My "Recipe Guide" and How it Affects the Bottom Line.

“If you want to manage somebody, manage yourself. Do that well and you'll be ready to stop managing. And start leading.”

Handling our restaurants food costs is a major task. One sure-fire way to do that is by what I have learned as a "Recipe Guide" what this essentially does, in basic terms, is show all the food coming in at cost and mapping where it goes on my menu and from there I can set my price points. I got most of my ideas about this from research and experience so I am sure I am repeating what most people in the industry already know however just in case others may need clarification I am spelling it out the best I can.

Success in the restaurant business is often measured in very small percentages. Throw in a wrong order here, a trash can of wasted product there, mix in a bit of un-managed labor and you’ve got a recipe for slim at best profit margins .....isn't that why we are in the restaurant business. ....besides our passion for food..profit?

Standards are in place from the beginning to set the standards for consistency and these standards include food cost controls.

For good recipes to become great menu items, I had to learn to make them pleasing to both our guests and our accountant. I break them down into stages that assist purchasing and inventory controls, organize prep and mise en place, reduce production time, and maximize yield. Then I must build the recipes up to serve (hopefully) hundreds of covers.

I break it all down into three stages

Step 1 – Add all Ingredients (no matter how small) to a master inventory list.

Every restaurant should maintain a Master Inventory List that includes all of the ingredients that a restaurant must use in the preparation of their menu items and mine is no different. This list can be maintained using a spreadsheet format (Excel/Peoplesoft will do) that includes purchasing information such as the pack, size and "as purchased" price of the ingredients — information that is useful when creating other management forms such as inventory and order forms.
I then have to accurately calculate the real cost to produce a menu item, the master inventory list should not only reflect the purchasing cost and unit of measure, but also the corresponding recipe cost and unit of measure. Any and all ingredients used in American cooking can be expressed in one of three units of measure when using it in a recipe — weight measure (typically oz or lbs.), volume measure (such as tsp.,tbsp.,cups, qt. or gal.), or by each. Many products are purchased by weight units of measure but are measured for recipes in terms of volume (fluid) measure. To determine a true recipe unit cost, it can require measuring a pound of product to determine its recipe yield.

Step 2 – Prep Stages/Mise En Place

Here I identify parts of the menu item that can be prepared prior to final cooking and presentation, to reduce the time from order to service. Even a simple, single menu item often requires sub recipes that are produced in batch and become part of our daily preparation. Each sub recipe is then added to the Recipe Manual for reference by the kitchen staff. The cost of each sub recipe ingredient is calculated by multiplying the number of recipe units used by the recipe unit cost listed in the Master Inventory. The sub recipe batch is then assigned its own recipe unit and cost based on to total cost to produce the batch and how much it yields.

Step 3 Calculate Menu Item Cost.

Finally, the cost of the menu item is determined by calculating the cost of each individual recipe or ingredient needed to produce the menu item, then affixing a selling price that produces the desired profit. I will review my menu item cost every month to ensure that cost expectations are accurate. With our POS system we are able to Red Flag market wide price increases per bulk item. This helps me determine which food vendor that product will be purchased from as well as if I should make a recipe change.

Variables

Generally, my food cost should be around 20-28%. This means that if I pay $1.00 for something, I need to charge minimum of $3.34. It may seem like I am charging a lot more than necessary, but keep in mind that we aren't just paying for the food itself. We are paying someone to prepare the food, serve the food, and clean up after the food. Everything in our restaurant, from labor costs to the "Set Costs" IE: Electric and Gas bill needs to be covered by the food we serve. As our first restaurant is a QSR we have a great advantage in that we have a smaller food cost and depend on volume more than covers or "Butts in Seats" like a FSR does. While a Get them in Get them out mentality exists in a lot of QSR's that will not be the case at our restaurant where we will do everything we can to provide a great experience so the customers want to return.

I am quite sure I have left more out than I put in however this is a great place to start.

As always I welcome your feedback.

Am I Going To Work The Line?

Yes, as much as I can, however a better question is why should I?

As Executive Chef EVERYTHING comes back to me so why would I not work my line? Granted I will do my best to hire the right staff and train them the best way I know how yet at the end of the day it's my name and reputation riding on that menu item. Whether or not myself or any member of my staff is having a bad day the customer does not give a damn and they expect for there food as well as service to be outstanding no matter what.

How do we pull this off every day you may ask..... Leading by example!

In all the time I spent as a line cook and sous chef I have only seen a handful of Executive Chefs actually get on the line and show me how they want there food to be prepared. They usually delegate it to another line cook that learned it from the cook before him therefore perpetually reinterpreting the dish!

It's funny that I remember the names of the Executive chefs who actually showed me how he/she wanted there menu prepared where as the other chefs..not so much.

First let me explain to all the industry people out there about what I mean exactly about "working the line." This DOES NOT mean being a line cook for every shift as this is what I have hired able bodied cooks for.
My Point is this,unless you show your cooks by Actually cooking with them every day, at least one entree,special etc., they will never have respect for your abilities as a chef because first and foremost as chefs we must be great cooks!

In my restaurant,until the customer walks in the door, sits down, orders a drink and reads the menu I have the opportunity to get on the line and teach my cooks the way I want MY food to be prepared and I consider that an honor. This also empowers them with the knowledge I have of food thus opening lines of communication and preventing less returns and screw-ups that cost me money!

Words mean absolutely nothing to cooks unless they know you can cook circles around them. I like a Thomas Keller quote I read once "I am only going to Promote one person to Sous Chef and that will be the person that is already acting like the sous." You have to walk the walk before you can talk.

As Executive Chef I must know how to cook, how to lead, how to delegate, how to be humble and proud at the same time (not either or), how to keep my restaurant going financially, know how to show other cooks how to make delicious food and know when to ask for help and when to tell them in, a manner in which cannot be misunderstood, "I Need This Now!!"

Based on my experience by doing these things they will not only respect me but my food as well. Usually they will even return the favor by not cutting corners, keeping there workplace clean and organized, tasting food and knowing when it's perfect and asking for help if it's not and accepting constructive criticism, treating the expensive equipment like its NOT disposable! In turn I will show them how to cost out every plate on there station and why it was cooked the way I have shown and expecting a special at least once a week from there station.

All this leads me back to why I will work the line....because I lead by example.

And I hope someday ,when they have there own restaurant, they may remember which chef showed them how he likes it done.

As always I welcome your comments.

Marketing for our Restaurant at this point.

"Don't bring your need to the marketplace, bring your skill. If you don't feel well, tell your doctor, but not the marketplace. If you need money, go to the bank, but not the marketplace."Jim Rohn

I t seems to me that Restaurant marketing is both an art and a science that is shrouded in mystery for many restaurant owners. Unfortunately, many advertising sales people don’t seem to want me to know what’s really working. They want me to think that the television & radio spots everyone else is running with them will be the answer to all of our marketing challenges. Do not make this decision very fast I say because marketing done correctly is crucial to my restaurant(s) success yet if done wrong can close our doors very quickly. I see advertising as a tool and in the hands of the wrong people will cost us dearly yet in the right hands will become a partner to our success. This is what I have compiled so far , based on my endless hours of research, as our “keys to marketing” and that being said once I find a company that is like minded I will trust them to go to work for us.

What are the keys to great restaurant marketing?

There are several components of successful restaurant marketing based on what I have seen work in restaurants I have worked in as well others I have admired over the years.
Branding There has been lots of hype over the last few months about our branding as this seems to be the big buzzword most salespeople like to throw around in the initial meeting with marketing executives I have had to this point. From day one I have been told we need to do a lot of branding and to “focus on the branding”, but no one has really stopped to ask us what our brand is and how we should build it. To me a brand is a promise. It’s what guests, employees, vendors, the media and all other key customers come to expect in dealing with our restaurant. Brand-building is closing the gap between what we promise and we deliver. From what I have found a strong brand is one that has alignment between the promise and execution! IE: Take what I have going on in my kitchen every night! I have a menu, that through expert execution from my line cooks, must be delivered on a consistent basis by our wait staff to our guests or we could be out of business no matter how good our marketing is! From what I can tell as a non-expert in marketing it’s not something that just happens when you advertise, and it’s not that people recognize our logo or recall our advertising, it’s how it is all executed. It’s all about how the customer perceives us as their perception is our reality.

Positioning

"You've got to learn the footwork, the positioning, how to box out, how to pass, how to shoot your free throws. All these things are necessary, not to be the No. 1 player in the world, but maybe you can play against him." Oscar Robertson

Positioning is an under leveraged restaurant marketing component and it was something that I saw owners do with regularity throughout my career. Positioning is the place we hold in the customers mind relative to the competition (the cheaper choice, the higher quality choice, large portions, family oriented, great atmosphere terrible food, et cetera). Effective positioning involves incorporation our Unique Selling Proposition (U.S.P.). The USP is the one thing that only we can claim. It’s a point of differentiation that the competition either cannot or does not claim. An example is Burger King versus McDonald’s in a classic struggle of two marketing giants. If Burger King can convince you that a flame-broiled burger tastes better than a fried burger, they’ve won the war because McDonald’s will never go into all 34,000 stores and rip out there flat-top griddles to install char-grilling pits. However McDonald's is doing just fine because they way the market is second to none so there place in the higher of food chains has remained #1 for decades.

Marketing doesn’t happen in a vacuum

From what I see effective restaurant marketing must be built on a foundation of fact and knowledge about the market, our competition and last but not least our customers. It’s a lot to worry about, but restaurant marketing has to factor these considerations into the overall strategy. Not even Coca-Cola can afford to market to everyone all the time, so effective market research and due diligence can help us be more effective in our restaurant marketing efforts.
Our Menu Mix every three to six months we will conduct an analysis of our menu. This will include profitability analysis and a competitive restaurant menu analysis. To keep our menu fresh, relevant, and profitable, I need to know specifically how each item on our menu is performing and also how it stacks up next to our top competition. I think of each item on my menu as a tenant leasing space and it has to earn its right to the space we have granted it and must turn a profit or it’s gone.

New Customers

These are first-time customers dining with us for the first time. First impressions here last a lifetime and can never be erased. They will establish their opinion of our company during this first purchase and decide what percentage of their paycheck to award us in the future. Based on experience new customers are the most volatile sales-builders because if we depend on new sales only we will not survive in the harsh environment of the Las Vegas strip. However, it is impossible to increase frequency of these first time customers even if they are only in Las Vegas for a few days, because there is too much here to do. What we are intending to do is establish a customer base and to do this we will focus considerable efforts on these steps.

Frequency

This is how often our existing customers return to us for future purchases. Frequency is generated by developing enduring relationships and loyalty among our customers. While it is rare to disagree that frequency is important, an alarming number of businesses fail to appropriate the needed time and resources to developing successful programs. Consider that the average Papa John’s loyalist purchases a pizza every 30 days. If Papa John’s can get there loyal customers to purchase just one more pizza in those 30 days, they’d double their sales. What I see missing in Las Vegas is the repeat customer! Why don’t people come back? It could be a myriad of reasons however the one I can affect the most is customer service! I feel my employees are ambassadors for my business and if they do not treat the customer as I direct them, in a positive friendly manner just as one example, I get rid of them. So why do most Strip restaurants blast the airwaves versus developing more successful frequency programs, such as bounce backs, loyalty programs and the like? You’ve got me, I just know customer service.
When asked what was the single most important event in helping him arrive at the theory of relativity, Albert Einstein was reported to have said, “Figuring out how to think about the problem.”

How much should we spend on restaurant marketing?

I believe as a pure start-up we should allocate 3% - 6% of our sales to marketing. It’s also a good idea to allocate our money proportionally to our sales volume. Meaning, if July is our busiest month, we should spend a proportionate amount on our restaurants marketing budget in that month. Some restaurant owners I have worked for in the past look at slow periods and think that’s when they need to spend money to drive sales, so they spent a big chunk of cash trying to build a happy hour business and forgo building on top of our busy periods. Fact is, there is a reason people aren’t coming in from 4:00 PM- 6:00 PM and we’ll be sending valuable marketing dollars down a black hole if we try to build this period. There are nearly one million restaurants in the United States and probably only 2% of them are busy from 4:00 PM- 6:00 PM. Restaurant marketing cannot change behavior; it can only influence existing behaviors. We will only spend our restaurant marketing dollars where it will have the best return for our restaurant.

How do most market restaurants themselves?

It’s sad really, but 80% - 90% of restaurant marketing budgets are spent on getting a new customer to visit for the first time. This is the least effective place to spend our money. The majority of new customers require mass media advertising, which is costly and has dismal return on investment. The fact is obtaining new customers is 7-10 times more expensive than building restaurant sales through increased frequency, check average and reward marketing efforts. IE: Restaurant operators see that their competitor is on television or in the yellow pages or on a billboard and Believe that they should be there as well. They do this without regard for what’s working. Restaurant owners have to wear so many hats that sometimes they just do what’s easiest versus what’s prudent they simply write a check for mass media advertising and hope for the best. From what I have seen mass media is often more about feeding egos than driving sales. It’s also impossible for most independent companies to compete in a toe-to-toe battle with the big guys. Subway spends $290 million per year just on television. They can do that because they are a multi-billion dollar enterprise, what our budget for advertising……not 290 million I can assure you!

As I have said I am not a marketing expert and base what I am saying here on my experience only. If you have a better strategy or suggestions I would love to hear from you.