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The article I mentioned on Food52.com The Kitchen Habit Chefs Can't Stand

Here is The USC Trojan Marching Band practicing Fanfare, Tribute, Fight On.

USC Band -- Fanfare, Tribute to Troy, Fight On!

and while I'm at it...

Beat The Farm!!!

1. Pareto's Rule
   1. Vilfredo Pareto was a 19th-century economist and sociologist interested in land ownership and the social distribution of wealth.
   2. Pareto found a pattern: over 80% of the land in Italy was owned by less than 20% of the population.
   3. The Italian economy was highly concentrated among a relatively small group of individuals.
   4. In Pareto's garden, 20% of the pea pods produced 80% of the peas.
   5. Identify your critical few and watch them like a hawk
2. If you spend more than 1% of your food cost on it you should be paying attention to it.
   1. Food sales are 100,000 1% = 1,000
   2. Food sales are 30,000 1% = 300
   3. Follow that rule of thumb or find your own guideline
   4. You'll probably end up following 8 to 10 items.
   5. Zero in and start asking question.
      1. How the products are handled?
      2. Is there waste?
      3. Portioning - new prep guy or line cook?
      4. Yield - lazy prep?
      5. Spoilage - over ordering?
      6. Theft - make it hard to steal
      7. Make it easy for honest people to be honest
   6. Check the critical few daily
   7. Ask lots of questions
      1. Should I lock it up?
      2. Should I move it to a different location?
      3. Am I locking up the right things?
3. Stop looking at dollars and start looking at physical volume
   1. Calculate a theoretical usage by tallying item sales
      1. 300 single hamburgers
      2. 200 double hamburgers
      3. 500 patties sold
   2. Calculate actual usage
      1. 200 beginning inventory
      2. 500 purchases
      3. 100 ending inventory
      4. 600 patties used ???
   3. start asking questions
      1. Isolate the problem
      2. Resolve it and move on
   4. Toot your horn
      1. Nobody else will
      2. Over communicate
      3. Inspires confidence
4. Don't become blind to your own mess
   1. Refresh & focus
   2. Make a custom check list wunderlist.com
      1. Scan trash cans
      2. Review prep lists
      3. Check security devices & systems
      4. Actually take inventory don't just guesstimate orders
      5. Slow down and pay attention
      6. Be present and focused
      7. Breathe

1. Closing restaurants sucks
2. Running a cash cow restaurant rocks.
   1. Volume hides a multitude of sins and fool you into thinking you're a genius.
   2. If you know how, you can milk it.
      1. Creativity isn't just about flavors and piling the food into a little towers.
      2. Creativity is about creating and maximizing value.
      3. Don't run a special or put something on the menu to only figure out three weeks later it is at 40%
   3. Common mistake for young chefs
      1. Too many ingredients
      2. Weird ingredients
      3. Weird cooking methods
   4. Focus on tasty
      1. Classics are classics for a reason - learn to execute them well.
      2. Make people go yum.
      3. Make people forget to take a picture.
      4. Seasoning and basic cooking techniques
   5. Micro vs Macro - plate cost vs case cost
      1. Micro - plate cost
         1. Chicken at $3.00 per pound with 90% yield
         2. 3.00/.9 = 3.33 per pound
         3. 5 oz  = $1.25 + $1.50 for rice veggies and sauce
         4. $2.75/.25 = $11.00
      2. Macro - case cost
         1. $120 for a 40# case of chicken with 90% yield
         2. 40*.9 = 36
         3. 36*16/6 = 96
         4. 120/96 = 1.25 per portion
         5. Can you move 96 portions?
         6. Can you do something really cool to max the value of 1.25?
         7. Can you move five cases?
      3. Financial Model
         1. COG 25%
         2. Labor 35%
         3. Operating Expense 10%
         4. Occupancy 15%
         5. EBITDA 15%
            1. Find out what your is.
            2. In theory, pricing food to hit your target food cost will cover labor and your other expenses.
            3. Leave some wiggle room
               1. 30% target = 28% pricing
      4. Cheat Sheet download
         1. Portion cost on top
         2. Plate cost on the bottom
            1. $5.00 per pound at 80% yield and a 6 oz portion = 2.34 per portion
            2. Add an estimated amount for accompaniments ($2.00)
            3. $2.34 + $2.00 = $4.34 plate cost (round up to 4.50)
            4. Target 25% and you need to charge at least $18.00
   6. It is all philosophy
      1. Success equals attitude and competency
      2. How are you looking at the opportunities and challenges?
      3. Are you asking smart questions?
      4. If you sold nothing but this one new item all day would it help or hurt?
      5. If it would hurt you change it or drop it?
         1. Don't get romantic about the food get creative with it and give the customer what they want
         2. When people see the plate go by, do they ask what is that?
         3. Is the trash can in the dish pit full of food?
         4. Talk to the customer and find out.
            1. Too many chefs afraid of negative feedback.
            2. Grow a pair and listen.
            3. Hear a problem, solve it, they will be blown away
               1. Nobody does this!!!
            4. Talk to everyone
            5. Get the manager to teach you.
   7. Look for vendor specials and clearance items

1. What does the P&L do
   1. It reports sales and expenses
      1. Not the actual cash but commitments either coming in and going out
   2. Where do the numbers come from?
      1. Sales - cash, credit cards, client invoices
      2. Expenses - bills and invoices posted during the period,
         1. Invoice date determines when the charge is reported
      3. Restaurant p&ls generally have five main sections
         1. Sales
         2. Cost of Goods - food & beverage (usually consumables but some restaurants consider paper cogs usually fast food - burger wrapper, soda cups)
         3. Labor (not just payroll but salaries, taxes & benefits)
         4. Operating Expenses
         5. Occupancy
      4. Pro tip, most accounting programs allow you to click on the dollars (food cost) and see a detailed report of every transaction.
         1. Example - main line vendor sells dairy, meat, grocery, paper, chemicals. You can see if only the food on the invoice. 
   3. EBITDA
      1. Earnings Before Interest Taxes Depreciation and Amortization
      2. More numbers below this line but you don't need to worry unless you own the place.
      3. Basically how much the sales cost to execute
         1. Sales - Cost = profit or (loss)
         2. Did you make or lose money?
   1. Problems with P&Ls.
      1. Bookkeepers make mistakes
         1. Don't take it personally and don't make assumptions about whether or not it is deliberate
         2. If you don't understand how it works you can't spot the mistakes
      2. By itself, it can't tell you where you are bleeding.
      3. You have to have something to compare it to.
         1. Usually a budget or last year's sales.
         2. Know your Industry standard, are you a pasta joint, steak house, seafood house?
         3. Variance means the difference between two compared numbers
            1. Actual food cost $12,000 or %30
            2. Budgeted food cost $10,000 or 25%
            3. Variance $2,000 or 5%
      4. P&Ls usually aren't completed until one to two weeks after the end of the period.
         1. By then you are half way through the next period and its too late to react
         2. This has given rise to flash reports & weekly inventory
   2. It's just a reporting tool
      1. controlling costs starts with
         1. Charging the right price
         2. Purchasing effectively
         3. Not wasting or losing the product
         4. Performance standards
            1. if its good enough for the food, its good enough for your operations
   3. Next week - charging the right price.

1. #1 misunderstanding among the chefs was the belief that high inventory hurts food cost
   1. Running inventory to zero
   2. 86'ed items at the end of the period
   3. Often most expensive menu items with the highest gross profit contribution.
   4. Skewing food cost & shooting self in the foot
2. Chef's who didn't understand the financials were easy to dupe
   1. Regional manager pressuring chefs with  false labor target
      1. Logic - if they fight for 8% maybe they will hit 10%
   2. Threatening them, scared for their jobs
   3. Consequences
      1. Understaffed
      2. Poor quality
      3. 86'ed items
      4. Miserable and stressed
3. Balance Sheet
   1. Tells the owner how much the business is worth
   2. The accounting equation: Assets = Liabilities + Owners Equity
   3. $100,000 value of the business = ($200,000) loans and debt + $300,000 equipment, inventory & cash
   4. It's the same as Your House Equity = Mortgage + Value of The House
4. Why This Matters is Inventory
   1. Nearly every chef misunderstood this one thing
   2. Inventory does not hurt food cost
   3. Inventory just moves the change in food  inventory on or off of the balance sheet
   4. Too little - can't service the guest
   5. Too much - money sitting on the shelf
   6. Turn your inventory
   7. Talk about turnover in a later episode
5. Summary
   1. Don't be ignorant, you don't have to be an accountant but you can't afford to be ignorant.
   2. Ignorant gets you fired
   3. If you don't understand a number, ask someone and keep asking till it makes sense to you
   4. Its a lot easier than you think
   5. Don't waste time beating yourself up if you struggle at the beginning and don't give up
   6. Sooner the better

If you have ever cooked on a range with burner heads like this...

Then my work has impacted your cooking career. I'll tell you how it happened.

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