Key Idea: Smoother Operations
Key Idea – In the absence of cost education, restaurant employees often assume “menu price –
food cost = restaurant profit.” To help his team internalize the skinny truth of restaurant margins, restaurateur Derrick Tung gave each of his employees a stack of 100 pennies and asked them to guess how many are left from each sales dollar after all expenses are paid.
Then Derrick shared his real “pennies per sales dollar” costs item by item for taxes, rent, insurance, workers’ comp, utilities, wages, ingredients, disposables, repairs, etc. At the end, only a few cents remained. Now Derrick’s team better understands why breaking a single plate is expensive and why it is so critical to satisfy every customer on every visit to keep them coming back!
Derrick Tung, Owner
Paulie Gee’s Logan Square
Key Idea – COVID-19 caused Will Grant to reevaluate his pizzeria profitability by “daypart.” He learned that, even after sizeable school orders, lunchtime labor costs had long matched sales, leaving nothing to cover ingredients. Switching to “dinner-only” instantly increased profits. It also freed Will’s time to focus on further boosting profitable evening sales.
Will Grant, Owner
Bainbridge Island, WA