Category: Profit and Loss


A good way to build sales within the four walls of the restaurant is to run server contests that focus on selling items that can increase your check average, help get rid of high inventory items before they go bad (this works great in the case of over ordering which also helps combat high food cost), help increase sales in an area that may need a little help such as wine or liquor, and can also help build sales on slower nights.
If you provide great contest prizes this can have a huge impact on employee morale and can help generate competition amongst the servers and once everyone is on board it can be fun and everyone wins.
Here is a list of some on the contest I have done or seen done in the past:
Bingo-fill out a sheet of paper with a bunch of squares listing the menu items or drinks you would like sold. The first one to complete it wins.
High category sales, such as appetizers, wine, dessert etc…
Highest check average.
Wine feature contest for a month based on highest sales. Usually, three winners; first, second and third place.

Here are some the prizes I have offered in the past.
No closing duties or side work.
They get to write their own schedule for the next week.
Trade outs with other restaurants or local businesses.
Beer, wine and liquor purveyors can also give some really good prizes.

Anytime you can get your employees to compete with each other, can create a positive fun atmosphere where they can win some really cool prizes it a great morale builder.

Bar Costs

In most casual upscale restaurants, I would guess that average bar (alcohol) sales are probably about 25-30% of the total sales. As with food cost the bar has several factors that need to be taken into in order for anyone to properly manage the costs costs of a bar. They include good purchasing practices, proper pouring of drinks, a good draft beer system, proper storage of wine, eliminating theft and making sure your bartenders are ringing everything up and not stealing from you.
This is an area that you absolutely do not want to over purchase any high end wine or liquor as these tend to run several hundred dollars and are slow movers. That is a lot of money sitting on the shelf and unnecessary inventory on hand can lead to miscounts and theft. Track your purchases and utilize your product mix reports when placing purchases.
Ensuring the bartenders are properly pouring drinks is essential. I use a marked wine glass with either tape or a measured amount of water next to the area the bartenders are pouring drinks so they use it as marker when pouring actual wine. If you use jiggers it is important to make sure the bartenders are using them on every drink and they must know their recipes to use the proper jigger size. If you are a free pour bar as we are, then the bartenders must complete a pour test sheet so you can see how accurate they are on different size pours. They must also know their recipes. Over pouring kills you liquor cost while under pouring kills your business as weak drinks will not bring your guests back.
It is important to have a good draft beer system complete with keg savers. I have found that Keg savers help prevent air getting in the lines by allowing you to bleed the line after tapping a new keg. This helps prevent the 3-4 pitchers of foam that is poured off after each keg and believe me, this ads up and some beers pour off more that 4 pitchers of beer. I also like to use the Beer Blast system that makes Nitrogen from the outside air. It replaces the Nitrogen tanks that you need for Guinness and also mixes a little bit into your regular kegs that I have found helps to ensure they are empty. (It is important to keep a back up of Nitrogen just in case the system goes down, but this has not happened to me in 5 years in three different restaurants) How many times have you thought the kegs were tapped to early as you shake the empties feel what seems to be a lot of beer left in them? This adds up as well.
Improper storage of wine causes it to go bad sooner than it would if it were stored properly.
Theft is a concern in every restaurant and as much as you would like to trust every one you simply can not. I like to keep every thing locked up except what is in my back bar. If you have an overnight cleaning crew, it is important to keep an eye on your draft beer as that is a perfect opportunity for them to steal beer. I have heard and seen some keg handle locks, but have personally never used them.

Food Cost

Food cost is a constant challenge for managers and kitchen managers. Let your guard down and your throwing product away because it was improperly prepared, stored, portioned, over ordered, or rotated.
All menu items should have recipes that have been costed out so you know the food cost of each menu item.
Recipe adherence is a very important aspect of food cost as improperly prepared food can result in an inferior product that must be discarded.
Following proper sanitation and storage procedures must be followed to avoid any unnecessary contamination that can shorten the shelf life of a product.
It is also important that recipe portion sizes are followed. Under portioning affects the quality therefore, you are not giving the guests what they are paying for and over portioning will have a negative impact on your food cost.
Using your product mix history and following sales trends when ordering food is a very important tool to help prevent over ordering. Over ordering can result in product spoilage and also increases the chances of miscounts when doing inventory.
It is important to set expectations at the hiring process as well as during the training process. Most employees these days do not take the responsibility to focus on costs. Therefore, it is very important that management is constantly following up on product labeling and dating to ensure proper rotation of product.

Declining budgets

Most people do not understand or care about the value of declining budgets. Declining budgets are an intricate part of managing the business. With out them you are are running the business blind.

Declining budgets allow you to know exactly where you are at any point in the period and make adjustments according to your sales. If your sales are trending down from you budgeted sales, then you can adjust you declining budget as well. Also, if you have any unexpected costs in a particular category, you can make adjustments to the other categories so you can still come out with your overall projected budget.

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