Old School Cafe Management Skill: That Item Makes Me This Much

Operator Solutions Using Mocafe

Last night, a perfect New England summer night, I was talking about cafe and restaurant management with an old friend, a former executive chef (like me), restaurant owner and major lines food salesman. The topic of passion was how old-school successful operators calculate the hourly success of their business.

One of the tricks old-school operators use is knowing exactly how much money each item sold puts to their bottom line. A good operator can stand in the middle of the shop and point at each item sold and tell you:

That turkey panini puts $3 to my bottom line. That frappe makes me $2 every time one is sold. Thatapple fritter drops a buck in my pocket every time we sell one.

Now they aren’t telling you how much each item sells for; they’re telling you how much profit each item makes.

How many operators today, or, cafe managers, can tell you how much a sale of every item in an hour puts to profit?

How do you calculate this? In future blogposts, I’ll cover calculating food or beverage cost, calculating labor cost, and calculating operating expense and how to calculate each of these factors on a per item level. Basically, it works like this (example):

Item Sell Price – Ingredient Cost – Labor Cost – Operating Expense = Profit, or, “What Goes In Your Pocket”

By the way, neither of us ever shied away from revealing this information to our staffs. In fact, we often shared this information, as doing so 1. taught staff valuable skill toward becoming a more valuable employee and 2. motivated them to upsell customers to more profitable items.

Have you calculated the profit you make from the sale of each item you offer? We’d love to hear your opinion and methods of tracking cafe performance.

Jeff from Mocafe

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