From our three week seminar on Fruits, Herbs & Spices we moved into a five week seminar on Food Management. Chef Jim, our Knife Skills instructor, reappeared to guide us through “various types of operations within the food-service industry, and the common financial and managerial aspects of running any successful operation”. He warned us at the start of the first evening that this was a seminar he inherited from a prior instructor and while the subject matter was critically important to future chefs and business owners, it was not a favorite of students. He promised to try to run an engaging class and make the evenings interesting. He also pretty much guaranteed attendance by having a quiz at the start of each class and assigning a final project/presentation that could only be done with knowledge gained, and built upon, in prior classes. Smart guy. The evenings were indeed informative and Chef Jim was enthusiastic and on-point, making the dry topics of P&L’s, labor costs and recipe costing as fun as they possibly could be.
Like most of the kitchen labs and seminars over the course of the program, I really enjoyed the Food Management seminar. Of course that’s not to say it was fun sitting through 3 hours of lecture and exercises in P&L’s, recipe costing and menu engineering after a full day in the kitchen, but the knowledge gained will be super helpful when I (eventually) get to the place/time when I can open my own business. In the meantime, it gave me a better understanding and appreciation of the tight margins, hiring challenges, menu changes, etc. that employers and owners go through every day. A good perspective everyone in the culinary world should have.
Top 10 Things I Learned/Was Remind Of in Food Management:
1. Prime Cost = Total Food Cost + Total Labor Cost will likely be a little over half of all costs and are the two areas where you as the owner/manager have direct control. Anything over 65% is cause for concern. Other costs, such as rent, taxes, insurance are out of your control, basically “fixed” costs. The lower you can keep your food costs (limiting waste, sourcing strategically from several vendors, using one ingredient in several dishes on the menu) and your labor costs (working long hours yourself, enlisting family & friends, hiring lower costs interns/externs) the higher likelihood you will have a viable, perhaps even profitable business.
2. Include a salary for yourself in your labor/payroll costs. This ensures that a) you get paid and b) you have a realistic view of the actual business expenses.
3. Advocate for yourself & be vigilante about making sure that you are getting the quality and quantity of product you ordered and expected from your vendors. Check EVERY order before the delivery person leaves. Mark the invoice at the time of delivery if product is missing or damaged, don’t wait to negotiate later.
4. There is more to working in food than commercial operations such as restaurants, cafes and bakeries. There’s a whole world of food service possibilities from institutional (universities, hospitals, government agencies, armed services) to industrial (corporations, ex. Google, Amazon). Sometimes these operations offer more robust benefits and/or family friendly hours so should definitely be on the job search radar.
5. When selecting vendors consider quality, price, reputation, service level, available delivery times. Then pick the one that makes sense for what you’re doing. If you’re opening a small sandwich shop catering to busy office workers that want to grab something quick, fresh and reasonably priced to take back to their desk you probably don’t need to buy organic micro greens from a local farmer. A good quality romaine would be a better choice. If however you’re opening a sandwich shop in a chic town center where the median home price is $1M and your target market has high disposable income and is greatly interested in what they’re eating/where it comes from, those organic micro greens are a must. Buy them and price your product accordingly.
6. Know your menu. Understand what is selling, what is not. Make changes based on the numbers AND what your customers want. If you have a product that is selling very well but is a few points below the average on contribution margin you are smarter to keep the product (make customers happy!) and try to lower the food cost than taking it off the menu or changing it drastically.
7. The upper third of the menu is the “power zone”. This is where you want to put your high contribution margin/popular/special items. The rest of the menu gets read afterwards.
8. Your menu is your “silent salesperson”, it communicates EVERYTHING from the identity, brand, atmosphere, philosophy, price point, etc. You want to get this right. I think that here it is absolutely essential to know what you want to be, what you want to say before you show it to your first customer.
9. It really is location, location, location. Some places are going to support the type of business you want better than others. You need to understand your target market (income, population growth, median age), local regulations (liquor license availability, noise ordinances. outdoor seating rules), competition (direct & indirect – hey gas stations sell coffee too!) and possibilities for growth and expansion.
10. A lot of mistakes/missteps can be corrected/smoothed over and ultimately forgiven through exceptional customer service. People may not remember the food but they will remember how they were treated.
Chef Jim also shared with us a list of thoughts and advice for those of us entering into the food industry. It was a conglomeration of things he has picked up along the way in his 20 years in the culinary industry. It’s an awesome list. You’ll have to go through the program to see it. My favorite? “Remember, the way you treat people below you is just as important as the way you relate to your superiors”. A lot of people, in and out of the food industry, need a reminder of this!
For our final project/presentation were tasked with creating a business proposal for a new food business, including a menu, standardized recipes for three menu items and a sample P&L. We then presented our “business” to Chef Jim and the class. It was a lot of work but a valuable exercise. It gave me a large dose of reality in regards to all of the moving pieces that are involved in opening and operating a small business. Also made me realize I have some work to do on my actual business plans and that as Chef Jim said, there is more work than one person can handle. A business partner, or partners, are now something I am seriously considering. Building a “dream team” with the right mix of food, marketing and business knowledge.
Below is the menu for my FICTICIOUS business. The name/logo is a real possibility, as is the menu content. The list of vendors are some of my favorites. The location and plan were completely made up… Although I do think the Seaport could use a nice little bakery for all the new residents coming into all those new buildings.