Restaurant Cost Structure - Restaurants 101

Cost Structure

Whether you are a single location café, multi-unit of fast casual concept, high-end restaurant or nightclub your Cost Structure needs to be set from the start. You need an understanding that everything that you do in those for walls will directly affect your cost/profit.

The concept location plays a major part in the cost for two reasons: First the sale price is controlled by your surroundings; Second the wages paid to employees are also controlled by surroundings. Below see a list of the Major Cost areas that need to be controlled. Restaurants 101 can show you how to build a cost system that is easy to understand and easy to use. We will also breakdown your cost and show you what you really should be running as your cost in the following areas:

Labor Cost

  • All hourly employees
  • Salaried employees
  • Security (if applicable)
  • Valet (if applicable)

Food Cost

  • Price out menu
  • Check Vendor pricing
  • Bulk Purchasing without waste
  • Training of preparation to control waste
  • Correct invoicing and inventory

Bar Cost – Beer/Liquor/Wine

All methods above in regards to controlling food cost in this areas plus the following:

  • Theft systems put in place
  • Checks & balances from ordering to inventory
  • Using technology to more exact
  • Understand product flow to help reduce overhead

Depending on your exact concept areas of focus will change to make sure you are driving the cost as low as possible without sacrificing quality or service. That is the key and really the most important part of controlling cost. Numbers that are too low are worse than numbers too high! Reason, if cost are high either the staff or guest are benefiting. If your costs are too low the guest isn’t benefiting nor is the staff because the guest isn’t returning. Restaurants 101 will show you how to balance this and will help you create a system that the staff will get involved in helping you. If you notice there is nothing about raising prices in here. Unless your prices are way too low raising them to lower your cost isn’t doing anything. The problem still exists and raising the prices isn’t the solution. Restaurants 101 will also help you with cost for Smallwares & Disposables.