I was thinking about how to answer the question, "What does it take to be successful in the restaurant business?" If you want to be successful running a restaurant, you should know three key things. Watch this video, or continue scrolling, to learn those three key things.
About What It Takes for Running a Restaurant Successfully
I've worked with thousands of restaurant owners over the years all over the country. I've seen more P&Ls than an IRS auditor. I also ran a restaurant coaching and software company for 16 years before selling it. I've seen more numbers than anyone I know. And in seeing those numbers, there are three things that you have to know that are keys to running a restaurant.
The 3 Keys to Running a Restaurant
First, you have to know your prime cost. You can learn all about restaurant prime cost in this video https://youtu.be/M5nJcJ5oB2M. I go in depth about prime cost, what it is, how to calculate it and what to aim for in the video.
Second, you have to create a budget and live by the budget. Your restaurant's success is based on how well you forecast sales, expenses and then adjust for when you miss those forecasts. To a lot of people, the word "budget" is a nasty word. But I want to tell you it's one of the most important systems you will ever have. It's how you predict your profitability and then plan for it.
Third, you have to have recipe costing cards. If you don't have every item on your menu costed out and know how much each item costs you to make, then you're basing your chances of profitability on dumb-ass luck. There is no other industry that sells a product that doesn't know what it costs.
Every other industry - retail, widgets, you name it - knows what it cost to buy the product and how much to sell it for to make money. In the restaurant industry, we write specials on the board and ask the chef to give us any number to charge for it. If you have a chef or kitchen manager that "generally" knows what their food items cost, then you're generally not making any money. We're an industry of pennies and every penny counts.
Know your prime cost and have the two most important systems in place - a budget and recipe costing cards. This is what it takes to make money running a restaurant.
If you would like to learn more about the importance of systems and how to run a restaurant, read our free special report, Is Your Food Distributor Screwing You? 5 Things You Can Do Now to Lower Food Cost. Download it here. Be sure to visit my YouTube channel for more helpful restaurant management video tips.
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