Business and Operations
The Pizza Chef: January-February 2016
Running a profitable pizzeria
By Diana Cline
One of the most challenging things about running a successful restaurant is controlling your costs and maintaining profitability.
This is a daily battle and you must be relentless if you want to make money in this business. Proper food controls and accurate recipe mapping are absolutely essential to ensure profits are not thrown in the garbage or given away. Your weekly food cost should be no more than 30 per cent if you are serious about keeping the doors open without constantly injecting money into your business.
It requires a lot of proper planning and accurate projections to keep your restaurant stocked with enough products to not run out of anything but not have so much on hand that it spoils. The only difference between inventory and waste is timing. A three-day-old case of Roma tomatoes is inventory and has value; a three-week-old case of Romas is waste and has cost you money.
There are many ways to control your waste and one of the most important is to have properly maintained equipment. If your equipment is running poorly, it is costing you money in many different ways. Any refrigeration equipment should always be at the proper temperature to ensure product quality and food safety. Many operators view equipment maintenance as a bother and only fix things when they break. This is false economy as it always costs you much more to fix something after it breaks than it does to do routine maintenance so it doesn’t break down. If your walk-in cooler breaks down you could potentially lose thousands of dollars in perishable product in addition to lost sales. Properly maintained equipment uses less power and will keep the temperature more stable and extend the life of your product. This in turn saves you money, frustration and downtime. We use an equipment maintenance schedule at the cucina. It allows us to keep track of when we have serviced our equipment last and when we need to do it next. Once again this is a very easy thing to incorporate into your restaurant. A simple piece of paper on a clipboard will do the trick. If you really want to get fancy you can use an electronic organizer.
Another way to control your food cost is to accurately map out every recipe on your menu. It’s not that difficult and will give you accurate information on how much each item on your menu truly costs you to produce. This exercise in turn allows you to price your products properly and gives you the opportunity to actually turn a profit. In order to map out a recipe you need to have a standard recipe for each item on your meanu. You should have recipes for everything that you sell. This helps to ensure consistency of product and allows you to project how much product you will need to do a given amount of sales.
Here is an example of how to map out a simple recipe.
For this exercise we will map out a 12” cheese pizza. The standard recipe would include a 12” dough ball, 5 oz of marinara sauce, 5 oz of mozzarella and a pizza box.
Now let’s calculate the cost of this item: dough ball = $.35, marinara (100 oz can costs $10 or $.10 per oz, so 5 oz of marinara = $.50), mozzarella (1 lb of mozzarella costs $4.80, 1 lb = 16 oz, 1 oz of mozza costs $.30 so 5 oz = $1.50), a bundle of 12” boxes costs $25 (1 bundle = 50 boxes, $25 divided by 50 = $.50).
Add all these numbers together – $.35, $.50, $1.50 and $.50 – and you now know that is costs you $2.85 to make a cheese pizza. Now you want to run a 30 per cent food cost, so you will need to price your pizza at $9.50 to meet your projections.
How did I come up with this price? Take your costs ($2.80) and divide by 30 per cent and that number will tell you how much you should charge for that pizza. $2.85 divided by 30 per cent equals $9.50. This is a very simplified example, but you get the idea. Conversely, if you charge $5 for that $2.85 pizza, you can see that it would be impossible for you to sustain: at 57 per cent food cost, you can’t afford to pay staff, rent, phones, gas or electricity. Never mind maintenance on your equipment.
Many independent operators have never done this exercise and are unaware of their true food costs. If you can use a scale and are comfortable using a spreadsheet, then you can easily do this. I know this exercise will take some time, especially if you have several different sizes on your menu, but is well worth investing the time. You will have a much better understanding of what to charge for your products and you will definitely have more money in the bank at the end of the month.
Diana Cline is a two-time Canadian Pizza magazine Chef of the Year champion, internationally recognized gourmet pizzaiolo, owner of Diana’s Cucina & Lounge in Winnipeg, Man., and a director for the CRFA (now Restaurants Canada) from 2009-2013. In addition to creating award-winning recipes, Diana is also a consultant to other pizzeria owner/operators in menu development, creating systems to run a pizzeria on autopilot, along with marketing and positioning to help operators grow their business effectively and strategically. She is available for consulting on a limited basis, for more information contact her at email@example.com.