Beyond the Kitchen

Recipe Costing Blog - Beyond the Kitchen

This blog is perfect for both the inexperienced and experienced restaurant owner. My goal is to share my experiences and build on them from my reader’s experiences and to share those thoughts on my blog. We can all better ourselves by learning from other’s experiences and mistakes. Besides touching on the basics, we will venture into higher-end, more complicated actions including legal, partnerships, accounting, costing and marketing. As you read on, keep an open mind to the ideas presented, be ready to absorb anything and everything. There will be times, certain topics will sound or seem too complicated to understand at first; however, all of the pieces will eventually come together. Think of this journey as a guide and an expedition through business planning. As the pieces begin to connect, you will have a clear, and complete picture. If that sounds promising to you, then let’s get started on this blog!

Recipe Converter

Consistency Using A Recipe Converter
If you’re in the food and hospitality industry, then you know scaling recipes is essential to managing and controlling your food costs. In a restaurant, consistency in this industry is vital to a restaurant operators success. That repeat customers must always feel like the food was perfectly done every time visiting the restaurant. If it’s a slow day, you may only have to prep a half batch of your famous lasagna or on a busy weekend  you may need several trays to keep up with demand. Here is the problem, there may be several cooks in the kitchen and this means everyone must be on the same page.


Prime Cost

Restaurant Prime Cost Components
In any restaurant, prime cost is composed of food, beverage and labor costs. As a restaurant owner, you want to make sure to keep your prime cost below 65 percent. If you’re operating prime cost at 65%, then you are stating that 0.65 cents of each dollar goes towards food, beverage and labor costs. This does not include utilities, marketing cost, operational costs and rent. Monitoring your prime costs weekly will allow you to make adjustment before month end. For example, if you see your prime cost hit 75% in one week, then try to bring your prime costs down to 55% by adjust labor and reviewing purchasing.

Prime Cost Formula
Cost of Goods Sold (COGS) + Total Labor Costs = Prime Cost


Owning a restaurant has it’s advantages and disadvantages

People got to eat! For years upon years, people have been hardwired to grab something to eat when they are hungry. This is a major advantage for any startup restaurant. The only thing you need to consider is the future of your product, and will there be a demand for it in your local geographical area. That’s really it in my opinion. People have to eat and here in the U.S. and around the world is something we all enjoy to do. It’s not like opening a haberdashery. Food is universal, and our very basic senses can lead us there. We’re lucky to live in a country where you can try cuisine from all over the world without having to travel to those parts of the world. When people see a restaurant they know there will be food, but now you have to get them into the door and we’ll discuss marketing later on in this guide.


Top ten restaurant mistakes that are detrimental to your success

Plan Ahead To Avoid Mistakes
Business Plan
We offer a free business plan at our website. It’s a real working business plan specifically built for the operation of a restaurant. Use it as a guide and always work with a professional when your build your business plans. Don’t fall into the trap of not taking the time and effort to write a business plan. At a minimum, it will give you an idea of your concept, financial projections, and start-up cost. After writing your business plan, make sure to review it monthly because things will change and you should update your business plan regularly. If you decide to open a second restaurant, your first business plan is like a journal you can revisit to better prepare yourself for your next build out.


Letter of intent sample for your restaurant

Communicate Each Point Clearly
Let’s take a look at a sample letter of intent from one of my deals, so we can understand what’s in it. It’s important to educate yourself and knowing the details of your LOI will help you to weed out the attorney’s that may not know the basic terms we use in the restaurant industry. This was a deal I had to walk away from because the numbers were ridiculous and the rent was about $12k a month. We’ll talk more about budgets and what are good numbers later on. I’ve also listed other terms that I’ve seen in the past that may not be in this LOI.


Restaurant business plan free word document

Download Our Free Business Plan
Part of your due diligence is to also write a business plan. A perfectly good business plan will allow you to see your business’ pros and cons on paper. It will walk you through the process of operating your business and what it takes to be successful. Without a business plan it’s like walking in the dark feeling your way through to get from point A to point B. Can you imagine the bumps and bruises? If you’re not willing to do the work for a business plan, then don’t waste your time or money. At a minimum you will need to do the research. If you’re not a good writer, then there are people out there that will write your business plan; however, you must know your business. This way you’ll understand the details the writer puts into your business plan. I like to use elance for outsourcing work.


How to work with your restaurant architect

Your Vision Must Be Clear
Like all aspects of this business it’s important that you know your design and layout well. You know what you want and are looking for and it’s up to your architect to capture that design. For me it has always been important to sketch my own plans. You can sketch them with pencil and paper or design it using excel or Visio. Visio is a cool tool I used during my software development days when I had to create flow charts. It had a cool feature for designing offices and I used it to design my restaurants. My designs are not proportionate and my architectural skills are novice at best; nevertheless, it gave my architect the idea on how I wanted my restaurant to be designed.


5 things you must know before hiring a restaurant architect

Ask Your Architect These 5 Questions
TIP: Before your architect works on his plans, make sure to get a copy of the plans for the location you will be doing the build out. If it’s a shopping center, you will need the following:

Get all zoning information from the landlord prior to finalizing a lease!!!
The plans for the entire shopping center
The plans for your specific location
The number of the mall or shopping center architect
All plans need to be on a CD Rom in .pdf format or AutoCAD



A Good Restaurant Real Estate Attorney
A good real estate attorney that’s been in the game for a long time will also be able to broker your deal. Make sure when interviewing your restaurant real estate attorney you ask them the following questions:

How long have you been working as a restaurant real estate attorney?
Can you also help negotiate and broker my deal?
What clients have you represented in the restaurant industry?
Do you have any connections with strip malls and indoor malls?
What are your fees?
How much do I have to have in escrow?
Will you review and negotiate my LOI (Letter of Intent)?
Does your fee also include legally reviewing and assisting me in executing my lease?


My Experience Applying For An SBA Restaurant Business Loan

Restaurant Business Loan Process
I’ve written and co-written many business plans not just for myself, but for other restaurant owners. We all planned on submitting these business plans to our banks and SBA. No matter how well our plans were written, we always got the same response, “NO”. The worst part is that the “No” took over 3-6 months, keeping our project at a standstill.