Friday, February 22, 2008

Biz Blog #2: Food Costs

As I keep blogging about the business side to this thing, one constant you will notice is having to be disciplined about your % costs.  There is a window for everything and you have to stay within that window or you are about to screw up.  Food and Labor are your two biggest costs.  those two should make up around 55-60% of your costs.  Assuming you are planning on opening up a BBQ joint, one that is quick-casual like we are set up, you are looking for food costs to be around 23%-28%.  Full service dining is always going to be higher, so if you are going to have servers and such you will probably add a basis point or two to that, but not always.  Full service in general is higher because generally speaking the product is higher in quality.  For example, I've got a buddy that is executive chef at one of the big steak houses here in town.  Their percentage is around 39%.  High right?  It is, but dadgum they are clearing over $20.00 on average per steak, not counting the sides on the plate.  The higher the average ticket generally the higher the food cost.  As I sit here right now I cant tell you exactly what my food cost is.  I could take a pretty good stab at it, but what I do know is its high!  Now in two weeks I'll be able to tell you within the hour what % cost I am running for that particular day........all thanks to technology.  That is why I just dropped a whole bunch of money on a Point of Sale system.  I opened up operating with a cash register which gives you no real way to manage things.  That was a mistake, a big mistake.  Dave Story is going to guest blog about this in a few days so I wont go into it much more here.  The point is you have to manage that percentage really well.  Theft, waste, inventory mis-management, not paying attention to portion control (which is what I think my largest problem is) are all things that will "F" it all up.  By the way, your food cost does not include your paper goods such as napkins etc..  Thats another blog for another time.  We've done really well here at this location, but I would hate to see how much more money I'd have in my pocket if I had managed my food costs back then like I am starting to do now.  Dont make the same mistake I did.

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What is this Blog???

You ever been sitting around cooking for your family and friends and been told the following: "Hoss, this is the best I've ever had in my dadgum have got to open up a place of your own". The thought crosses your mind to do just that, but for whatever reason you dont. Well I'm "that" guy that actually went through with it and did it. I had absolutely ZERO restaurant experience! I decided to start this blog about my own experience hoping that it may be of some use and help to others who might be interested in opening their own place.
I learned this craft almost 20 years ago cooking whole hogs on brick & cinder block pits at a couple of little BBQ Joints in Henderson, TN. I learned from old, lifelong career Pit-Masters, working with them as an apprentice during school off and on for four years. Over the course of that time I learned the old, time-honored craft of REAL pit barbecue. At Martin's Bar-B-Que Joint I am trying as hard as I can everyday to bring that time-honored authenticity to my customers.
As you read you'll see I've made some stupid decisions, and I've made some good decisions. If you are thinking of opening a restaurant, especially a BBQ Joint, read this blog! Maybe some of this info can be of use to you. At the very least you will be entertained because I pull no punches.
Now listen, this is my blog to not only help with information but my blog to freely rant about my day to day experiences. There is no real "bad language" on this blog but there might be some things said that are very "tongue in cheek". If you are easily offended and/or cant see the satire in my posts then please just leave the blog. It will save both of us the annoyance of each other. For those of you who do like satire and are looking for good information about this experience, then by all means enjoy!