Running a Restaurant or Food Business by the Numbers

Know the two biggest costs

Two lines decide most restaurants and food businesses: what you spend on food and drink, and what you spend on labor. Add them together and you have what many operators call prime cost. If it creeps up, the business gets squeezed from both sides, because rent, utilities and insurance do not move when sales dip.

Check prime cost every week, not every quarter. Compare it with sales for the same week. A week where sales fell but labor hours stayed the same is a scheduling problem you can fix by next Friday.

Cost every dish

Write a recipe card for everything you sell: each ingredient, the quantity and the current price. Add up the cost of a plate. Then compare it with the menu price. Many owners are surprised to find that popular items carry thin margins, while a few quiet dishes carry the business.

Ingredient prices move. Update the cards when your supplier’s prices change, and look at them again each season. Small, steady changes, a slightly different portion, a different cut, a supplier comparison, protect margin more than occasional big price hikes.

When you do raise prices, do it on purpose. Raise the items that sell well and are underpriced, not everything by the same percentage, and make the menu look the same afterward so no one feels the change as a shock.

Waste is cash in the trash

Track what you throw out for a few weeks. A simple log by the bin, with the item and the reason, will teach you more than any report. Over-prep, spoilage, plate waste and mistakes each have a different fix: smaller batches, tighter ordering, adjusted portions and clearer ticket handling.

Count inventory on a regular schedule, even a quick count of the expensive items. The gap between what you should have used and what you did use points to waste, over-portioning or theft, and you can only fix it if you can see it.

• Weekly: sales, food cost, labor and prime cost
• Monthly: full inventory count and supplier price check
• Every season: menu review and recipe card update
• Always: a waste log you actually fill in

Plan for the slow months

Many food businesses are seasonal, because of weather, tourism, school calendars or holidays. Look at the last two years of weekly sales and find the quiet stretches. Build a reserve in the busy months to carry rent, payroll and loan payments through them, and plan the menu and the hours for the slow season on purpose, not by accident.

Make sure people can find you when it matters. Hours, menu, photos and the phone number should be right on your Google Business Profile and your website, since much of the decision about where to eat is made on a phone in the minute before leaving.