Saturday, February 16, 2008

Biz Blog#1-A: Inflationary Pricing

My last post was about location and what you need to make per square foot (as a general rule of thumb) to succeed. Towards the end I discussed my own place and how I need to capture more money per order this calender year to sustain and hopefully increase my 2007 price per square foot level. To increase it I plan on going after off-premise sales pretty hard, which should add about 30% give or take. But to just sustain it I will have to increase some menu pricing to reflect my suppliers price increases on to the consumer. I have added an article below that came out a month or so ago in the New York Times discussing the surge in prices, which is affecting all of us as consumers and business owners. Its affecting you at the pump, the restaurant, etc. Some things you notice immediately such as rising fuel prices. Some are more subtle, such as a restaurant like mine raising some of the menu prices. Some restaurants wont raise their prices right away, especially those that lie in the "Full service" category. They will make other little subtle changes. Remember that free bread they used to bring to the table, notice you have to ask for it now? Wheat is up 270%+ this year....a year ago bread was so cheap they could afford to give you some for free, now its relatively expensive.....why give you free bread if they dont have to? Remember all that butter that used to lay next to the salt & pepper shakers? Where is that now? Milk has also seen a HUGE % increase and is expected to rise another 40% in the coming months, milk based products are included in that figure. Why would they leave a pile of cube butters on the table for you dump 4 of them on your baked potato to stuff your head-hole with? How about creamer for your coffee? Why would they leave creamer on the table for you now.........so you can dump 5 of them in your venti coffee? Not to mention the parents of that little bastard kid at the table next to you whose opening the creamers up and drinking them straight, or that good ol' sweet "christian" grandma who never leaves the restaurant without stuffing her purse full of your complimentary creamers. Thieving wench.
Why this is happening is another blog that I dont have time to explain, but a lot of it is due to the high demand for ethanol. You'll notice these things now and if you are going to open a place up you cant just sit idle and pay attention to whats going on in the world markets. They affect you directly, and if you are not paying attention they will sting your ass. If you dont your sales per square foot will start dropping, and the next thing you know you'll be in trouble. Read the Wall Street Journal and/or Business Day in the New York Times. Every weekend pick up a copy of Barron's and read it. Keep up with whats going on......you'll be glad you did........trust me.

Check this article out........

http://www.nytimes.com/2008/01/15/business/worldbusiness/15commodities.html?_r=1&scp=1&sq=commodities%27+relentless+surge&st=nyt&oref=slogin

5 comments:

Eric Devlin said...

As always, very enlightening. Thanks for keeping us 'in the loop'.

Eric Devlin

Pat Martin said...

thanks eric.....i really appreciate the feedback you give.

Anonymous said...

When you get all this bbq joint dos and donts on paper were you can email it to me I might think about opening up a place. Untill then if you open on Sunday and Monday you will help you square footage numbers. hahahah Just kidding!
Arlie

Meredith said...

As a Brentwood blogger, I was so excited to find your site! I'm always up for trying a new restaurant, especially when it is locally owned.

But reading this post gave me the chills.

I'm not sure that publicly calling customer's children as "little bastard kids" is a good way to attract families to your restaurant.

We don't let our kids play with creamers, but I'll certainly think twice before patronizing your restaurant now.

Pat Martin said...

meredith....i am very sorry you feel that way, there is NO harm meant by my posts. Please understand that this blog is my space to speak freely, and everything here is tongue in cheek, very tongue in cheek. I hope you will come in, i think you will enjoy the food. thank you.

-patrick

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 life.....you 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!