Budgeting & controlling cost 6

Budgeting & controlling cost 6

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  CHAPTER 14 RESTAURANT OPERATIONS, BUDGETING, and CONTROLLING COSTS •Front-of-the-House Operations •Back-of-the-House Operations •Control –Food –Beverage •Controllable Expenses –Labor –Guest Check Control •Productivity Analysis & Cost Control
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  FRONT-OF-THE-HOUSE • Front ofthe house refers to the hosts, bartenders, servers & bussers. • The visual appeal of the building & parking area are important to potential guests. – Guests receive a first impression known as curbside appeal—or, would you even stop or get out of the car?
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  FRONT-OF-THE-HOUSE • The firstthing restaurant managers do is to forecast how many guests are expected and share that information with the kitchen. • A guest count is arrived at by taking the same day last year and factoring in things like today’s weather, day of the week, and so on.
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  FRONT-OF-THE-HOUSE • The elements of management are planning, organizing, communicating, decision- making, motivation & control. • Schedules and checklists help organize the restaurant. • A “lead sheet” lists staff on both shifts so you can easily see who is on duty.
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  BACK-OF-THE-HOUSE OPERTIONS: • The back of the house is sometimes called the “heart” of the operation. • The kitchen is the center of production. • Production sheets are created for each station, detailing all the tasks necessary to bring the food quantities up to par stock of prepared items & to complete the preparation on time.
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  BACK-OF-THE-HOUSE OPERTIONS: • The chef makes sure that all menu items are prepared in accordance with the standardized recipes and that the line is ready for service. • During service, either the chef or a manager may act as a caller—in an attempt to control the ordering and expediting of plates at the pass.
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  CONTROL • There isso much food and beverage in a restaurant that, unless management and owners exert tight control, losses will occur. • Restaurants can use programs like Chef Tec, which shows the actual food cost compared with the ideal food cost. This is known as food optimization. • The food cost percentage should be calculated at least monthly: – The formula for doing the food cost percentage is Cost/Sales × 100
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  LIQUOR CONTROL • Controlof liquor is critical to the success of the restaurant. • Management decides on the selling price and mark-up for beer, wine, and liquor. – This will set the standard for the beverage cost percentage. – Normal pouring cost for beer is 24 to 25%. – Wine should have a pouring cost of 26 to 30%. – Liquor pouring costs should be 16 to 20% of sales. – Combined, the beverage pouring cost should be 23 to 25% of beverage sales.
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  CONTROLLABLE EXPENSES • Term used to describe the various expenses that can be changed in the short term: – Variable costs – Payroll – Operating expenses – Marketing – Heat – Light – Repairs – Maintenance
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  LABOR COSTS • Dependingon the type of restaurant & the degree of service provided, labor costs may range from approximately 16% of sales in a quick-service restaurant to 24% in a casual operation & up to about 30% in an upscale restaurant.
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  LABOR COSTS • Projectingpayroll costs requires the preparation of staffing schedules & establishing wage rates. • Staffing patterns may vary during different periods of the year, with changes occurring seasonally or when there are other sales variations. • Payroll and related costs fall into two categories: • Variable (percentage ratio to payroll). • Fixed (dollar amount per employee on the payroll).
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  LABOR COSTS • Variableitems include those mandated by law: Social Security, unemployment insurance, Workers’ Compensation insurance & state disability insurance. • The fixed items usually mean employee benefits & include health insurance, union welfare insurance, life insurance & other employee benefits.
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  GUEST CHECK CONTROL •Without check control, a server can give food & beverages away or sell it & keep the income. • Guest checks can be altered & substitutions made if the checks are not numbered. – To avoid such temptations, most restaurants require that the server sign for checks as received & return those not used at the end of the shift.
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  GUEST CHECK CONTROL •For tight control, every guest check is audited, additions checked, and every check accounted for by number. • Some operators control restaurant income by having servers act as their own cashiers. – They bring their own banks of $50 in change; they do not operate from a cash register but out of their own pockets; they deposit their income in a night box at the bank.
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  PRODUCTIVITY ANALYSIS & COST CONTROL • Without knowing what each expense item should be as a ratio of gross sales, the manager is at a distinct disadvantage. • The simplest employee productivity measure is sales generated per employee per year: – Divide the number of full-time equivalent employees into the gross sales for the year.
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  The End Copyright ©2008 John Wiley & Sons, Inc.