Restaurant Basics
When I first started as a restaurant owner, I didn't have a coach or someone holding my hand as I waded through all of the information needed to do things right. I had to learn through mistakes and any small bits of information I could ween from my competitors. It shouldn't have to be like this. Here are the very basics I have picked up through the years.
Get Open
We all dream of making our first restaurant perfect before opening the doors, but it's far more important to focus on getting started quickly while establishing a solid foundation. The finer details can be adjusted and improved after opening, as real-world experience will naturally reveal areas that need tweaking.
The quickest and most cost-effective path forward is to find an existing property that was previously a restaurant. This approach can save you a significant amount of money on the build-out and gives you the flexibility to customize the space to reflect your vision—without going over budget.
Understanding Percentages
For any restaurant to thrive, profitability is essential. Here's a simple breakdown of how your expenses should ideally be allocated to maintain a healthy balance:
25% - Food Costs: This covers everything involved in getting food onto the plate.
25% - Labor Costs: Includes salaries, hourly wages, payroll taxes, and administrative payroll systems.
15% - Overhead: Encompasses rent, utilities, licenses, repairs, and other recurring expenses.
Achieving these targets is no easy feat. Many restaurants fall short of these percentages, but with careful planning and consistent discipline, reaching them is possible—and once you do, operations become significantly smoother.
It's also worth noting that food costs shouldn't be limited to just ingredients. I recommend including everything that comes through your doors, such as cleaning supplies, paper goods, liquor, and beer. Taking this comprehensive approach ensures a more accurate understanding of your expenses.
Menu Planning
Whether you're considering hiring a chef or planning to be a Chef/Owner like I was, it’s crucial to plan your menu thoughtfully. One key aspect of this is cross-utilization—using the same ingredient in multiple dishes. This approach helps reduce food costs, waste, and prep time. Additionally, maintaining an organized kitchen and cooking line is essential. The French culinary term mise en place, meaning “everything in its place,” is a foundational practice for running a clean, efficient kitchen with faster ticket times.
When designing your menu, always keep food costs in mind. Lower-priced dishes can often be marked up by as much as four times their cost, while higher-end items like steaks or seafood typically allow for markups of 2.5 to 3 times due to perceived value and what customers are willing to pay. Beyond profitability, items like steaks, which are cooked to specific temperatures, come with a higher chance of being sent back. This is often not due to staff error but rather customers misunderstanding temperature preferences when ordering. Either way, a second steak ends up being cooked, impacting time and cost. Proper front of house training is essential to ensure the customer gets what they want.
Always be learning
In today’s fast-paced restaurant industry, where employee turnover is higher than ever, it’s crucial to understand every role in your establishment. You don’t need to be a master chef or an award-winning bartender, but having the skills to handle basic prep work or pour a drink can save you both time and money while reducing stress. Plus, it shows customers your dedication and can leave a lasting positive impression.
Why a Captain system works
As a business owner, you probably find yourself working harder and longer than anyone on your team. Chances are, you're also earning the least—or not paying yourself at all. But it doesn’t have to be this way. For example, servers typically earn 20% of every dollar that comes through the door, all without investing significant capital or bearing the stress you face daily. They work shorter shifts and avoid the heavy responsibilities that weigh on owners like you.
What if there was a better system that could transform your business and your quality of life? Enter the Captain System. In this model, you—or a designated hire—manage all the tables in the restaurant while earning a fixed salary. Meanwhile, tips are redistributed to cover payroll costs, allowing you to pay your team more efficiently.
This system allows food and drink runners to receive a higher hourly wage, enabling you to attract and retain reliable staff. With more funds available, you can also hire additional kitchen staff, improving cooking times and increasing the number of scratch-made items on your menu. More in-house preparation directly lowers food costs and elevates your restaurant’s reputation within the community.
The bartender’s role can remain as is, but they can assist with table service during busy periods. For larger restaurants, hiring a second captain may also be necessary to keep operations running smoothly.
Here’s an example of how this system could work:
Weekly Sales: $20,000
Tips Collected: $4,000
- Captain Salary: $1,000
- Kitchen Staff Wages: $3,000
- Food Runners Wages: $1,000
- Total Payroll: $5,000
In this scenario, your out-of-pocket payroll expense would only be $1,000—or 10% of sales. Remember that 25% scenario from above.
By adopting the Captain System, you can reshape your restaurant’s workflow, reduce stress, and finally create a sustainable model that works for you and your team.
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