I have often heard it said that a chef can either cook or has a good head for business, but seldom does a chef have both in equal portions. Of course, there are many chefs who can cook brilliantly and run a very profitable business with an excellent eye for details and numbers, although they are becoming more and more rare with each passing year. So, is this a new phenomenon or has it always been the case?
The answer lies in shrinking profit margins, which have been plummeting for nearly 20 years. Before that, there was plenty of margin for a chef with a poor business mind to still achieve profit, although many struggled. Often putting creativity and the pursuit of a perfect dish at the forefront of the operation, they never had to develop the business skills to make changes to their methods. Other revenue streams often covered this shortfall, and all was sweet. Now those revenue streams are also getting tighter and thinner, leaving less to prop up a poorly run operation.
If your customers love the product from your chef and the staff work well, the Catch-22 is a hesitancy to make any changes that may cause the chef to leave. With replacing a chef in a constantly contracting chef pool simply creating yet another business dilemma, tolerance kicks in and the diminishing profit margins turn into ever increasing losses.
At some point this becomes unsustainable and only then solutions are sought.
The main cause of this cycle mostly comes down to poorly or non-trained chefs. This includes young chefs who have been thrown into the head chef role with little training or experience and more senior chefs who are stuck in their ways. But with chefs’ apprenticeship times being reduced, there is little opportunity for the correct level of suitable training and experience to occur.
On a positive note, there are many digital systems now available that can identify the problem areas and lead to workable solutions. The key here is to actual use them, to set the correct pricing, with corresponding matching cost prices, that, if implemented, will achieve profit.
The ‘make’ or ‘buy’ question becomes critical in controlling wages, but as important is the effectiveness of rosters and how they are used. There is available technology to ensure that overtime is kept to a minimum, reducing those staff who always say “yes” to cover sickies, often resulting in “out-of-control” overtime figures for the month.
Whilst all of this can be very uncomfortable to address, due to the serious ramifications on a business in ignoring the situation, it must be taken seriously. Sometimes an outsider can more easily identify the problem areas and also provide working solutions.