Warren Daniel Seacoast Regional Director NH-SBDC Restaurant Tools Warren Daniel Seacoast Regional Director NH-SBDC

Source: Restaurant Finance Monitor. http://www. restfinance

Industry Considerations Technology Types of Restaurants Industry Standards Labor Cost Solutions Food Waste Solutions Startup Pitfalls

Technology More restaurants byte into technology POS Systems (see handout)

Types of Restaurants Full Service Quick Service Restaurants (QSR) Fine Dining Family Restaurants Quick Service Restaurants (QSR) Fast Food Coffee Shops

Industry Data Resources IBISWorld Businessrg.com Restaurant.org (National Restaurant Assoc) Restfinance.com Qsrmagazine.com

Industry Standards: Cost Drivers Independent Restaurant Average Based on Experience, Business Resource Guide & IBISWorld Type of Business Revenue/ Employee Wages Purchases Prime Costs Marketing Rent & Utilities Location Considerations Single Location, Full Service $52,600 33-35% 28-35% less than 65% 2.2% 9-10% Rent less than 8% Quick Service Restaurant $55,000 30% 32% 60% 2.8% 6-8% 10% Catering $44,400 25-40% 2.0% 5.4% Location does not have to be prime

Industry Standards: Labor Costs (Generalities) Includes employee wages, salaries & benefits Second highest cost in food service industry (after food/beverage costs) Target: 30-35% of total sales (10% manager salaries, 20-25% hourly employee wages) Source: http://smallbusiness.chron.com/food-service-industry-labor-cost-standards-13911.html

Labor Cost Solutions: Manage Seasonality Costs fluctuate from busy to slow season Average the weekly labor costs to get monthly costs Use monthly averages to obtain annual average Busier periods see better labor % vs. sales Excellent customer service when busy is key! Staff accordingly

Labor Cost Solutions: Minimize Overstaffing Cut down to “skeleton crew” when possible Discuss labor cost concerns and goals with everyone involved in scheduling Partially base management bonuses on reaching budgeted labor percentages

Labor Cost Solutions: Employee Productivity Low productivity at slow times drives up labor costs Cross-train employees Front-of-the-house: train some wait staff behind the bar  Don’t need to staff bartender during slow times Back-of-the-house: train staff on multiple food stations  One person can work multiple stations on slow nights

Food Waste: Top Three Culprits Driving Waste Overbuying Fear of Running Out Poor Knife Skills

Food Waste Solutions: Minimize Overbuying Can’t waste food you don’t buy Use production sheets – collect data Cross-Utilize Menu items Forecasting

Food Waste Solutions: Smart Menus Plan A, B & C for all purchased items Avoid single use ingredients Cross utilize as many ingredients as possible Menu according to season, weather, local events Test potential new menu items

Food Waste Solutions: Production Sheets Staff should know amount to prep each day Forecast based on collected data Use production sheets to order smart

Food Waste Solutions: Track Waste You can’t fix it, if you don’t know it’s broken Base future orders on past data Tracking waste is eye opening Tracking leads to goal setting

Food Waste Solutions: Proper Training Is Key!

Startup Pitfalls Overspending on equipment – consider used options Overspending on technology too soon Spend on marketing! Remodeling/Decorating is expensive! Food Expenses Work out systems prior to opening Evaluate your menu Identify areas of waste from Day 1!

Warren Daniel Seacoast Regional Director Warren.Daniel@unh.edu Thank you Warren Daniel Seacoast Regional Director Warren.Daniel@unh.edu