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

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

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

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

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

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

7. 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

8. 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:

9. 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

10. 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

11. 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

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

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

14. 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

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

16. 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

17. Food Waste Solutions: Proper Training Is Key!

18. 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!

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