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advice for new start up

 
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gelenn



Joined: 12 Mar 2014
Posts: 22
Location: Albany, Ga

PostPosted: Thu Jul 16 15 3:43 am    Post subject: advice for new start up Reply with quote

I'd like to get advice from you all on a couple of things. I opened a BBQ and wood fired pizza restaurant the last of February. We have 88 seats inside and 48 seats outside on a covered patio. The building is about 8 years old but sat empty the last 5 years before I remodeled it and opened. We opened heavy on labor and didn't cut as soon as we should have. March sales were almost $100,000 but then dropped to $74000 in April, while labor remained about the same. We have since cut but obviously still not enough. My sister owns a number of successful restaurants in Atlanta and recently merged with another person and he has reviewed my financials and made the following recommendations. I want you guys input to whether or not these numbers are realistic for our type of restaurant.

He recommended the following:
1. Immediately cut hourly payroll to 25% of sales,
2. Get food costs to 28% (is this doable with our meat costs? and we cook fresh every day, we do not retherm food to sale the following day. Brunswick stew, Collards, Baked beans will get the leftovers)
3. Renogotiate the lease to no more than 5% of gross sales,
currently it is about 7.75%.
4. Ask on 3-5 months rent abatement.

I have about a $250000 investment in this venture with $100,000 in equipment and $150,000 in leasehold improvements.
What are you guys thoughts on his recommendations?
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Grills Gone Wild
BBQ Fan


Joined: 15 May 2010
Posts: 212
Location: Rockwall, Texas

PostPosted: Thu Jul 16 15 11:12 pm    Post subject: Reply with quote

#1 - Correct. You need to get payroll in line with your sales.
#2 - Apparently he doesn't know BBQ. I don't see 28% being realistic unless you have a way to sell out every day and not selling brisket.
#3 - Ideally that would be great if you can do it, but where you are at is good. 8% and less is what your goal is.
#4 - Not sure if a landlord is willing to do it, but they may with what sounds like a bunch of improvement you have done.

Good luck!
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jbass
BBQ Fan


Joined: 06 Jun 2010
Posts: 122
Location: Cairo, GA

PostPosted: Sun Jul 19 15 1:01 am    Post subject: Reply with quote

You would still be a little high on labor at 25% for your location.

What are your percentages on pizza vs q vs beer/liquor sales?

I do agree you where very heavy on labor, I told my wife that the 1st time we came by the store. Food cost can be brought down to 28% across the board if you count the pizza into the mix but you would be hard pressed to get it below 30% on the q alone.

I will be up your way next week. Do you have time to sit and talk for a little bit?
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Harry Nutczak
BBQ All Star


Joined: 01 Mar 2007
Posts: 8558
Location: The Northwoods

PostPosted: Wed Jul 22 15 2:03 pm    Post subject: Reply with quote

The most important thing in that list is to get your combined food & Labor costs under 55%, getting them under 50% is even better.

I start getting my beak tweaked when my labor creeps over 15%

Are you using a POS system? If not, Why not?

That has been the biggest thing for me, I knew I hadf money walking out the door, but I couldn't pinpoint where it was exactly happening. I knew drinks were being occasionally forgotten on bills, and then I started catching sides and entire entrees not being charged for too.
So a POS system with a "No ticket, No food" rule being strictly enforced brought things into line and saw an immediate improvement in cost ratios.


My product line is identical to yours with BBQ & Pizza, but I am not able to run a WFO here due to insurance idiocy. What concessions did you need to make to get your insurance carrier to allow a WFO in your establishment.

Heck, insurers here will not allow my UL-Listed, zero-clearance pit within 10 feet of any structure. When I mentioned a wood-fired pizza oven, they schitt their pants!
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gelenn



Joined: 12 Mar 2014
Posts: 22
Location: Albany, Ga

PostPosted: Sun Jul 26 15 1:07 am    Post subject: Reply with quote

Thanks guys.
We are working hard on getting the labor % to 25%, I envy you Harry 15% really!. Of course, part of getting to that goal is increasing sales, particularly catering, which I haven't focused on as much as I should have trying to get the store functioning as it should. I'm making it a top priority this next week to increase catering and capitalize on the buzz going around about our food quality. I also have to capitalize on my mobile wfo investment, its the only one in this area.
Our pizza sales are 17% of food sales, alcohol (beer, wine & liquor) is only about 10% of sales. We ran Wild Pizza Wednesday this past Wednesday which offered 1/2 off on any pizza (also advertised "you don't like it, you don't pay for it! only had to comp 2 pizzas!), 1/2 off Margaritas, 1/2 off fresh made lemonade, and $1 domestic draft beer. We were slammed most of the day, probably our biggest traffic day since the first week we were open. The idea was to get people aware of and try our pizza. Our BBQ was getting such good reviews I felt guests were coming in with only one thing on there mind--Q. And you all are right, to get food costs in line pizza has to have more than a 16% share of sales.
Harry, never had any issues with either my smoker or the wfo either by the fire department or our insurance carrier. We are insured by Columbia. Yes we have a POS. We caught 4 servers stealing by voiding out tickets when they were paid in cash--each has from 7 to 12 felonies charges each for doing this! About $5,000 in loss to me. And the we were stealing from ourselves, we had the wrong prices for different items in the POS from what they were on the menu, about $8,000 pissed out the window!!
To get our labor costs under control I am budgeting our labor costs according to each individual day's average sales revenue. And if sales are slower than average, we cut people, if sales are average or above we then have the necessary staff to accommodate. I never thought I'd have to micro-manage to that degree! I really wish I had pursued my original concept of counter service instead of full service!!!
jbass I'm available most anytime if you come up, just text me before so I'm sure not to be out running errands. I'm still interested in the CVAP if you still have it.
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Harry Nutczak
BBQ All Star


Joined: 01 Mar 2007
Posts: 8558
Location: The Northwoods

PostPosted: Tue Sep 01 15 2:41 am    Post subject: Reply with quote

If I had a liquor license, (and room for a bar) i'd be sitting real pretty due to the entire community being fairly soaked with alcohol for a large percentage of their awake hours.
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