Your Kitchen is Losing Money. So Now What?

Posted by barblog on May 25, 2010 in Bar Management | 0 comments

So you’ve discovered that your kitchen isn’t the profit center you want it to be. Instead for some reason, your kitchen is dragging down the other parts of your business. Unless you are happy to run your kitchen at a loss, the chances are that you want to plug the losses as soon as possible.

If you have followed my previous recommendations to create a recipe card for every menu item,  then you have by now eliminated the poorly performing menu items, so this should not be the problem.

Assuming that you are now left with profitable menu items only, it’s time to stand back and take stock of the situation: The problem you have is that the ingredients purchased throughout the period are not being sold for profit – they are either being stolen, overcooked and thrown out, expiring before usage, not being delivered in the first place.

20% of your ingredients are going to account for approximately 80% of your profits or losses and these are usually your high end ingredients such as beef tenderloin, lamb, halibut, lobsters, crab etc.

It’s time to make a list of your top ten ingredients by unit cost.

Once you have this done, you’re going to track what happens to these items shift by shift for a week. Seems like a lot of work? So is losing your business because of a poorly performing kitchen.

I recommend doing this out of sight of the kitchen staff, even the Chef. Conduct your opening count before they come on duty and your closing count after they go home.

Use this Free Top 10 Inventory Sheet to track these items easily. If you are losing money in the kitchen, there’s a big chance it’s occurring with these items.

All you’ll need to do is an opening inventory of the items each shift, a list of the deliveries of these items each shift, the quantity sold (get this from the POS) and the closing inventory quantity. The Top 10 Inventory Sheet will then tell you if you are missing items instantly. If you have losses, it’s time to approach the Chef and ask for his feedback and answers as to the losses.

I would be very surprised if this wasn’t enough for him to take action in the kitchen and tighten things up, providing of course, that he is not the problem….

In any case, now that you are measuring regularly, you’ll be able to take appropriate action in the kitchen to put an end to the losses.

Could your kitchen be costing you your business?

Posted by barblog on May 24, 2010 in Bar Management | 3 comments

As trends have shifted over the past few years, most bar owners came to the realization that they couldn’t generate enough business by focusing solely on drink and so kitchens became a standard addition to the progressive bar.

Many of the bar owners that I have worked with were the first to admit that far from being their area of expertise, they were happy to leave the management of the kitchen to the chef. Sometimes this worked, other times it didn’t. I worked with a bar owner who ran his kitchen at a four figure loss for three months before it was brought to his attention, then there was the bar with more than 80 different dishes on the menu because the chef thought the more menu items, the more opportunities to sell…

Before you think this is an anti-chef rant, it’s not, I have great respect for the talented individuals that run profitable and award winning kitchens. However, you are the owner of the business and it is ultimately your responsibility to know where the costs, profits and losses lie in this vital area.

To work out if you have a profitable kitchen or not, follow these 8 steps: Read more..