Where are the Profits?

(Blogger's Note: Every Monday readers write. If you would like your question answered in this column email the question to editor@sonomanapafoodie.com.)

Dear Blogger;

I am writing you with the hope that you will set my wife or me straight. We each have certain thoughts about the restaurant we own. We have been at it for about 18 months and have had to struggle every step of the way. I am the chef, as I have been to culinary school, and my wife runs the front of the house. We just can´t seem to get ahead. And worse, every restaurant owner on the street tells us they are making a fortune at the business. Could we be the only people that are not making any money at this? My wife wants to sell and buy a bigger restaurant since we only have 80 seats. I want to continue with the project and turn it around. Any suggestions, advice? Please.

Frying Fries in Cincinnati...Dear Frying Fries,

Erase the thought that the struggles in the restaurant business will ever end. Whether you struggle with cash flow, profitability, employee problems, staffing, marketing, or just the day to day operation, the business is based on struggles. Some are easier than others but there will always be obstacles and challenges that new owners think of as struggles. As you become more proficient in the daily operation of the business the struggles will evolve into daily tasks.

Although it may seem like an eternity, 18 months is not a very long time to be in any business. And, one thing that few owners realize- if you are busy and serving a lot of meals, you probably are making money. You just have to know where to look for it.

Possibly costs are out of line. You may be squandering profits that are hidden in your expenditures. That is the major culprit in profit disappearance.

Ask yourself these questions:

Is your payroll percentage on target?

Are your food costs where they are supposed to be?

Is your bartender pouring the correct amount of liquor or wine for what you are charging?

The fact that you and your partner- in this case your wife-are thinking about different tactics to make money also needs to be resolved.

Immediately, you have to make sure that the team is all marching to the same drummer. You and your wife are the team. Delineating who is right and who may be wrong in your culinary game plan is not important. Deciding which plan to follow is what matters. Discuss both options and decide on the one which makes more sense.

In order to sell your restaurant it should be profitable. Analyze your profit centers- food costs, wine, and desserts. Make sure theses numbers are in line.

Often, when just beginning, owner´s always over staff causing ceiling high payroll costs. Try trimming payroll a bit.

Profits just don´t appear on the table at the end of they day. They are earned by tweaking a number here, trimming a bit of fat there, and constantly keeping your focus on the trashcan. Is your waste abundant? Are your portions too large?

All of these have a direct effect on how much money you put in the bank.

Keep working your plan. Discuss the possibility of opening another restaurant with your partner, once the one you are running is profitable.

And, as far as those owners down the street that tell you they are making a fortune, seldom does a restaurant owner admit that he had a slow, money losing, horrific night.

We are all gamblers. Have you ever met one that lost?