[00:00:00] When it comes to running a profitable restaurant, right, there are two main expenses, two main line items on our P and L that impact our profitability profoundly. On the one side, it's labor, and on the other side, it's cost of goods sold, cogs. And when it comes to cogs, there's theoretical and there's actual. It is quite possible that on paper, you look at your recipe cards and you're like, man, there's no reason I shouldn't be making money. The problem then has to do with your actual food cost. We have to dig into the underbelly of your restaurant to see what's going on. And my guess is there are three areas where you are losing money. Portioning, waste, and theft. On today's episode, we're gonna talk about those three areas. Portion control, waste control, and theft. All of that on today's episode of Restaurant Strategy. There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown. This is Restaurant Strategy, a podcast with answers for anyone who's looking.
[00:01:19] Hey, everyone, thanks for tuning in. My name is Chip Close. This is Restaurant Strategy, a podcast where we help you dial in profitability. When you are profitable, you are more sustainable. You have a business, business that can provide stability and security for you and your family, can provide stability for all of the people who work for you. Profit is literally the thing that matters more than just about anything else. Good food, good service, great decor, really cool vibe. All of that is in service of the bottom line. And I promise you, when you have a profitable restaurant, it's a way more fun than when. Than what you're doing now, than when you struggle to make what you deserve to make from your restaurant. If profitability is something you struggle with, if you're ready to make it consistent, predictable, 20% return every single month, I want you to get in touch. I run something called the P3 mastermind. It's a group coaching program where I gather hundreds of restaurant owners from all over the country all together on a weekly call. We've scaled this up to four different groups. The groups are amazing. The community is incredible. If you are struggling with profitability, if you are not making what you deserve to make out of your restaurant, then set up a free call restaurantstrategypodcast.com schedule. You'll have a conversation with me or someone from my team. Let's just get to know each other. Let's see exactly what's going on and we'll see if you're a good fit. If you're not a good fit, hopefully we can give you some action items and you can go take action and fix the problem. If you are a good fit, we'll talk about what those next steps will look like again. Restaurantstrategypodcast.com schedule and as always, you'll find that link in the Show Notes.
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And there are three main areas where I think you're losing money. That's portion control, theft and waste. We're going to talk about them in that order without any delay. Let's dive into it. Portion control is one of the first places I look when it comes to profitability. If on paper it says you're supposed to be profitable but then you run your P and L, and it says instead of 28% food cost, you're at 34. That's a problem. That's six points, right? And in a. In a restaurant that's doing a, you know, $100,000 a month, $150,000 a month, let's say the average restaurant is right. In those worlds, that's anywhere between six and $10,000 every single month that you are losing. That's your money that you are losing. Simp. People aren't being specific. They're being sloppy with portion control. When it comes to portion control, obviously, the most expensive areas in the restaurant are proteins, produce, and dairy. I'm not telling you anything you don't already know. When it comes to proteins, let's say we have to understand something really important. We don't talk about this enough. But yield. Yield is crucial because when you spend X number of dollars per pound and you get a whole side of beef that comes in, and then you gotta break it down, butcher it, and trim it up, you lose pieces there. So are you reusing those pieces in your burger? Right? Let's say you get a whole, you know, you're getting rib eyes and you're breaking down ribeyes, you're breaking down tomahawk chops, right? And you're cutting off the fat cap and all of that. What are you doing with all of those scraps, right? Obviously, I think most of you guys know what you're doing, you know, to keep those scraps and use them for sauces for stocks or most normally, right? For burgers, for ground beef. You're putting that in, right? And I'm guessing you're not making. All right, you're not using exclusively that. You're mixing that with some chuck and. And all of that. It's one example of how you use all of the stuff that you discard without throwing it out. How do you. How do you utilize that? Right? Portion control is crucial. Number one, who's actually breaking stuff down? Are they being diligent to weigh everything? Are you being laser focused on the yield? If there's stuff that is just true waste, you trim it up. There's nothing to do with it. You just chuck it. That has to go into. Has to be calibrated into the prices you're charging, or if you can re. If you can utilize certain port parts of the animal as you're breaking things down, that's really important to know too, right? Think about when you're breaking down salmon, right? You lose the Fins, the tails, the heads, the spines, all of that has weight that you are paying for, even if you're serving filets, right? And that, that's really crucial to understand. So when it comes to portion control, number one is understanding yield. Number two is understanding who's breaking things down, making sure they are weighing, measuring everything, right? And then when it comes to behind the line, just the, the cooks back there, making sure they are pre portioning as much as possible, making sure they are weighing things or that there's marked scoops for everything mean, you know, meaning on a slow Tuesday night, reaching in, grabbing, being really diligent about how many fries you're throwing into the fryer is one thing that on a busy Saturday night when you're just going, going, going. So building a system becomes crucial. System that will work on a Tuesday night, will work on a Saturday night.
[00:08:09] That becomes really important. And yeah, you're like, ah, fries, you know, potatoes aren't that expensive, but little by little by little, if it's a five or six ounce portion of fries and you're consistently serving seven, eight, nine ounces of fries, that's a problem. Same thing with like a salad. If you're reaching in and grabbing a handful of, you know, some spring mix, right. An extra ounce or two can be huge when it comes to the profitability of a given item, right? Because you're charging, your recipe cards are built on an 8 ounce portion and you're consistently putting out 9, 10, 11, 12 ounces. Especially a salad. It's so easy to do it. They, the, the, the leaves just sort of fold in. It's easy to sort of like smush more in there. And you've got to be using scales. This is something we learned at Fine Dining Scale at every station on the line, right? That nothing, that nothing gets put on a plate without being portioned. So either it's pre portioned before the shift starts, which we always recommend. So I was working at Gotham, they would pre portion the tuna tartare, right? Tuna tartare was famous in that restaurant. They would Pre portion like 30, 40, 50 portions before they even opened for service. Because they knew in the first hour and a half they would go through 40 or 50 portions. That became crucial. And then after we got through the push, right, the people at Garde Manger, for example, would go back and continue portioning out so that everything was mixed to order. But like the portion of cubed, you know, tuna cubed, raw tuna was portioned out ahead of time, that it was a five ounce portion. People did it when they had their wits about them, when they had the time to do it, right, Rather than just reaching in and grabbing a scoop and you know, doing, you know, doing the best you can on a busy Saturday night. Really understanding yield, really understanding breaking down proteins when you're breaking down a salmon, when you're breaking down rib eyes when you're, you know, all of that, right? Understanding yield, understanding breaking it down, making sure everything is pre portioned as much as possible.
[00:10:08] Everyone on the line has a scale and the proper scoops. I can't tell you how crucial that's going to be. And if you're not doing this as the last piece of this portion control, if you're not doing station checks, now is the time to do it. So front of house will often do a lineup, right? There's nothing to say a back of house can't go to that lineup or can't do their own lineup. And then right after lineup, before you go into service, do station checks, right? Not as a gotcha, not to get people in trouble, but just to make sure they're set up for success for the night. Part of being set up for success is not only making sure you've got all your meese, but making sure you have your scale, your little pint containers, your cork containers, making sure you have the right ladles, the right spoons so you're not over portioning any, anything that becomes crucial. And PS not just to make sure we don't lose money, but for consistency of the guest, right? If somebody comes one time and has a five ounce portion and next time they have a seven ounce portion, that changes their perspective. One time they feel like, oh man, look at how much I got. Or maybe they're too stuffed. Now on the other hand, they feel like they got gypped. It becomes really crucial for consistency to make sure.
[00:11:17] Just like we checked, check the seasonings, just like we check sauces, we also, right, just like we check, you know, how things are cooked, you know, making sure that the, the temperatures are right, we also have to make sure the portions are right. Not only to make sure we don't lose money, but also to make sure the guest has a consistent experience every time they come, that becomes crucial. So when it comes to managing actual food cost, portion control is where I'm guessing a lot of you guys are losing money. And those are some quick, quick checks to make sure you're not pop. Menu has reimagined the restaurant. They're breaking the mold of the menu, taking the kitchen doors right off the hinges and serving up their most comprehensive technology solution yet. Pop Menu. Max. It comes with the previous ingredients that we've talked about here on the podcast, right? Websites designed with SEO marketing tools that help keep you top of mind with guests, and of course, that patented interactive menu technology.
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[00:13:36] Next, we gotta talk about theft. Theft is huge, right? And there's two different kinds of theft. One is intentional and the other one is what I call unintentional. Intentional theft is easy, right? Somebody goes back to the walk and takes four stakes, puts them in their bag and walks out the back door. That is straight up theft, right? Or somebody who's drinking on the job, somebody who's, you know, doing what they're not supposed to be doing. That's straight up theft. That actually happened. It certainly happens, but that actually happens a lot less than I think we expect it would, right? Really what happens more often than not is what we call unintentional theft, right? So somebody, you know, decides not to charge for an espresso or, you know, the bar is three deep and the bartender's just trying to get a bunch of drinks and forgets to ring something in. And so then the tape, you know, the guests get taken to the table and they realize it never gets transferred over. It never got paid for. Right. It's nobody's fault just because it's a busy Friday night. But unintentional theft happens in that way all the time. The other way it happens all the time too is when like cooks are making their food or when people order in, you know, when servers get a discount and they can order off the menu. So they order it in and then a cook decides to be nice and gives them a little bit larger of a portion, right? Because hey, that's my buddy or, hey, that's my girlfriend or whatever it is, however you want to call it, it's still theft. It's serving something that didn't get paid for. And I can't tell you what a big deal this becomes, right? So we talk about portion control. Talked about that. Those are the safeguards when it comes to theft. Those are the safeguards. So I come from a place where everybody had to open their bag before they walked out the door, right? Steward or sous chef checked everybody else out when they. When they walked through. Right. That becomes crucial. Right. Making sure things aren't going out the back door, but from this unintentional theft place, making sure that we are diligent. And on top of all these things, I can't tell you. Now, part of that is making sure you're staffed up in the example behind the bar, making sure you're staffed up so it's not one person taking care of, you know, 12 bar seats and it's three deep. That's not going to work on a Friday night. It's making sure we have two or three people. It's making sure we can pull the bar back behind there to pour wine and pour beer when it gets busy in a push. Taking a manager, going back there, taking a server, pulling them from the floor behind the bar when it makes sense, you know, all of that to make sure that everything's being rung in. When it comes to server meals, right. Staff meals, I'm really not a fan of staff ordering off the menu. I much prefer a family meal situation. So that specific food is made at a specific time specifically for the staff. It goes up every day at 10:30 and 3:30, right. So anybody working lunch gets food at 10:30. Anybody working dinner gets food at 3:30. And there's a specific budget and all of that's put up and everybody takes their portion and goes I find that that's a much better way than people ordering off the menu because in most places we've got better stuff that we serve the guests as it should be. Right? It's one thing to feed your staff. I think that's a nice thing to do. But we don't necessarily have to feed them the same kind of food, the same quality of food we serve the guests. Again, I come from fine dining. That was certainly almost always the case.
[00:16:52] When it comes to managing your food cost, portion control and theft are crucial. When it comes to theft, intentional and unintentional, just put a couple of safeguards in place so you make sure you don't lose money. We're going to talk about waste because waste goes a little bit deeper. Talk about that just a second. After a word from some more of our sponsors.
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[00:18:22] Okay, so we're talking today how to manage food costs. Not theoretical because there is a, there's a good chance that your food, your recipe cards are all in line and you're like, man, it says my food cost should be at like 28%. And then you get your P and L and says your food cost is at 34%. And then six points, six very real points of profit are just going out the window simply because we didn't properly manage these three areas. I think the three biggest areas are portion control, theft and waste. We already talked about the first two and I want to spend the last few minutes talking about waste. When it comes to waste, There are three main culprits. I always say, if you're going to have a waste log, and a waste log can be something as simple as a piece of paper on a clipboard. You need a waste log at the walk in, because that's where waste happens. You need one on the line side of the pass, and you need one on the server side of the pass, because what happens is waiters make mistakes. Oh, I meant to ring it in medium rare, but I hit medium well by accident. That burger's got to go in the trash. Or the cook says, oh, I thought it said medium well. I didn't realize it was medium rare, so I overcooked it. That has to go in the trash, right? So a clipboard on the server side of the pass, clipboard on the line side on the cook side of the pass, and then one by the walk in. Because there is food that spoils before we have a chance of taking care of it, this becomes really crucial. If you don't do waste logs, this is a great time to start instituting waste logs again. Not to get anybody in trouble, but just to track it. Then if Cindy keeps making mistakes and she rings in food, you can pull Cindy aside and say, hey, Cindy, I'm seeing a common thread. You consistently are making mistakes on Friday and Saturday nights. And when it gets busy, just drawing Cindy's attention to it might actually solve the problem. Or some guy behind the line might, you know, might be overcooking stuff, right? On a slow Tuesday night, maybe he's really good when it's busy, but when it gets slow, he takes his finger off the pulse.
[00:20:17] You just have to be aware of when it's happening, where it's happening, so you know how to nip it in the bud. When it comes to back in the walk in, this can be solved by just simply, like, taking inventory every night. Now, you don't have to take inventory on everything every night. Again, I come from fine dining, where we would take inventory on protein and produce almost every single night. But even doing it twice a week will help. It'll make sure you're not heavy on inventory. It'll make sure that things aren't spoiling before you have a chance to use them. Because if you go back in. If you go back in there and you say, oh, man, my salmon's gonna go bad tomorrow, well, then you got to go to the servers and say, hey, guys, I need you to push salmon. It's really great right now, blah, blah, blah. But I need you to push it it's not going to last another day. That's something that they can do, but they don't know that they can and should be doing it unless the chef communicates to them. So taking stock back there in the walk in is crucial. You can see when lettuce is starting to wilt. You can see when asparagus is starting to drain and dehydrate. There are things you can do if you know that you should be doing them right. When it comes to managing food costs, waste is huge. Server errors, cook errors, and simply oversight. Not paying attention to expiration dates, not paying attention to that things are wilting, that there's a box jammed in the back corner, that the ground beef was all portioned out and we ordered more and we weren't supposed to. If you know that you gotta make meatballs, if you know that you gotta push burgers. If you know that you have to do something, then you can do it. Those three areas are crucial. Now, again, when it comes to managing food cost. Right. I find that a lot of people just don't realize that the prices have crept up on them, and that's theoretical. Making sure you are portioned and priced appropriately. What we're talking about on today's episode is assuming that you've done that and you've done that well and you're on top of it. And there are still problems that we are nipping the next thing in the bud. This is really hard to systematize because you've got a lot of moving parts in a kitchen, right? Multiple chefs, multiple cooks, multiple managers, multiple servers. And yet you absolutely have to do it. The last thing I want to talk about here when it comes to waste is behind the bar. I can't tell you how crucial it is to make sure on, for example, wines by the glass, making sure that you're not opening up multiples of the same bottle. So if somebody at one end of the bar is opening up a bottle of Cab and then to pour one glass and somebody all the way down to the other side of the bar is opening up a bottle just to pour their bottle of Cab, now you've got three glasses of Cab in one bottle, three glasses of Cab and the other one that are slowly dying, and on a Saturday night at 9:30, I don't know that we're going to sell six more glasses. And then let's say we're closed Sunday and we reopen Monday, how good is that Cab really going to be? It's crucial that we have communication there. Number two, if you are not using a jigger to pour your mixed drinks, your cocktails behind the bar. I promise you, you are pouring out tens of thousands of dollars every single year. I'm tens of thousands of dollars. Here's the thing. A jigger makes sure that we are not overpowering, which is good because then we're not over serving our guests. Number two, it makes sure that we're hitting our beverage percentage. Right. Our cost. And number three, again, it's making sure there's consistency of drinks. While it's great to get wasted, a gin and tonic that's out of balance just doesn't taste good. And when you're taking so much effort to make sure you've got great beer, great wine, great food, having a cocktail that's heavy handed isn't enjoyable. It just doesn't taste good. Right. And then you got one person having one experience, another person having another experience. Maybe one person feels slight, it may one person feels like they're getting special treatment. None of it's good. You want uniformity in your restaurant. So we talked a lot about the kitchen, but I couldn't get off this episode without talking about the bar. Because the bar represents an incredible opportunity to make up profitability. It also represents an incredible opportunity for, for waste. When it comes to waste behind the bar. Right. Really taking care of your wines by the glass. Really taking care to use jiggers. I can't tell you how much that will make for a better guest experience and a more profitable restaurant. And that's it, guys. Short and sweet. One final request. I've been asking this a lot recently, but I'm going to ask again. If you get any sort of value from this show, please take a couple of minutes. Go leave us a five star rating and review on Apple podcast. That more than anything helps us grow. This community, lets other people know that there's value here, that it's a community worth being a part of. I appreciate you guys. Thank you very much and I will see you next time.
[00:25:49] It.
