4 ms·

It depends on how you define loss leader. Free breadsticks?(okay if you produce them in house or have a massive amount of locations), $15 worth of produce sold

It depends on how you define loss leader. Free breadsticks?(okay if you produce them in house or have a massive amount of locations), $15 worth of produce sold for $14? Hell no. 25% - that's the sales price you can put towards food costings, this should give you a rough idea of the unforseen costs. If your kitchen isn't running at better than 25% food costings, your kitchen isn't profitable. Some places you can take a cut from this if you are working with another industry(such as gambling), but for a pure restaurant/cafe, don't even think about not hitting that point.

jaggederest 9y ago
I find it interesting how you can narrow profitability analysis down to individual areas within a business. As an example: Look at the walk in fridge as a business that 'buys' food from grocers and 'sells' food to the chefs when they need it, 'losing' money when food is wasted. Similarly front of house 'buys' food from the kitchen.
- marak830 9y ago
  Hospitality is all about tracking minor costs. You're argument would be akin to the keyboard buying from the user to write code. I think I realise what you are leaning towards, and it is like that. Any piece of equipment has a direct relation to the ROI, honestly it's not pleasant to think of staff that way, but when the margins are that tight, it has to be done. (that's one of the reasons I left hospitality.) It's not like advertising where you can charge someone 20k for a dm campaign, people will only pay so much for food, and the 'whales' arnt really there (at least not enough to keep an entire restaurant running at a loss). When you're profit margin is less than 25%, and you can't guarantee the number of users per day, let alone per week, then you're damn eight everything is calculated as a cost down to the cent.
  - notyourday 9y ago
    > When you're profit margin is less than 25%, and you can't guarantee the number of users per day, let alone per week, then you're damn eight everything is calculated as a cost down to the cent. If you cannot project within your margin of error the number of covers you would turn per day or per week then you do not have a restaurant business, you have a hobby.

jaggederest 9y ago

I find it interesting how you can narrow profitability analysis down to individual areas within a business. As an example: Look at the walk in fridge as a business that 'buys' food from grocers and 'sells' food to the chefs when they need it, 'losing' money when food is wasted. Similarly front of house 'buys' food from the kitchen.

marak830 9y ago
Hospitality is all about tracking minor costs. You're argument would be akin to the keyboard buying from the user to write code. I think I realise what you are leaning towards, and it is like that. Any piece of equipment has a direct relation to the ROI, honestly it's not pleasant to think of staff that way, but when the margins are that tight, it has to be done. (that's one of the reasons I left hospitality.) It's not like advertising where you can charge someone 20k for a dm campaign, people will only pay so much for food, and the 'whales' arnt really there (at least not enough to keep an entire restaurant running at a loss). When you're profit margin is less than 25%, and you can't guarantee the number of users per day, let alone per week, then you're damn eight everything is calculated as a cost down to the cent.
- notyourday 9y ago
  > When you're profit margin is less than 25%, and you can't guarantee the number of users per day, let alone per week, then you're damn eight everything is calculated as a cost down to the cent. If you cannot project within your margin of error the number of covers you would turn per day or per week then you do not have a restaurant business, you have a hobby.