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Help with restraurant cost.

 
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BBQBubba



Joined: 18 Mar 2006
Posts: 10

PostPosted: Sat May 27 06 8:27 pm    Post subject: Help with restraurant cost. Reply with quote

I'm looking to start a BBQ restaurant in the Houston area. Any idea as to the percentage of cost of operation for each dollar in sales. Is there any such # that would equate to success or failure, with the idea that quality and service are a given. Also would there be along with this an expected # of average daily sales (costumer volume) to be expected. I realize there are alot of unknowns to possibly come to any true conclusion. For any of you currently running a BBQ restaurant maybe you could throw some round about #s for me based on your personal experience without being to personal. I would greatly appreciate any info. I'm currently working to try and put a business plan together to hopefully secure some extra funding.
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kjwalker
BBQ Fan


Joined: 20 Dec 2005
Posts: 165
Location: Shanghai, China

PostPosted: Sun May 28 06 9:01 pm    Post subject: Reply with quote

Seems both your questions hinge on where you place your restaurant. Out in the country your operations costs would be lower, but your foot traffic would also be lower presumably. In the middle of the city, it would be vise versa. I think you need to pinpoint possible locations and then do a study of the area demographics to help answer these questions.
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Uncle Fester



Joined: 30 May 2006
Posts: 14

PostPosted: Tue May 30 06 7:41 am    Post subject: Re: Help with restraurant cost. Reply with quote

BBQBubba wrote:
I'm looking to start a BBQ restaurant in the Houston area. Any idea as to the percentage of cost of operation for each dollar in sales. Is there any such # that would equate to success or failure, with the idea that quality and service are a given. Also would there be along with this an expected # of average daily sales (costumer volume) to be expected. I realize there are alot of unknowns to possibly come to any true conclusion. For any of you currently running a BBQ restaurant maybe you could throw some round about #s for me based on your personal experience without being to personal. I would greatly appreciate any info. I'm currently working to try and put a business plan together to hopefully secure some extra funding.


I offer the advice I got from a Chef that owns a restaurant in Tampa, Fl. He started out doing catering much like you and I are in the process of doing.

Figure up a per person cost. Divide your actual cost per plate by .3

That includes everything that goes into! The cost of the paper goods, cost of the product purchased, cost of the wet naps, etc.
For an example: If whatever you are serving actually costs you $3.00 you would sell it at $10.00. Selling at this price is pretty much industry standard!

Hope this helps!
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BBQMAN
BBQ Super All Star


Joined: 13 Jun 2005
Posts: 15474
Location: Florida

PostPosted: Wed May 31 06 6:28 pm    Post subject: Reply with quote

I'm with KJ on this one. Different areas will come into play when you factor net sales. What other types of food are available in the general area? Do people already know your food?

Any business needs to be advertised to get the word out, especially new ones! You will have to build up a base of "regulars" over time, that will help spread the word. Word of mouth is your best advertising, but takes time to develop.

Most small business' fail in the first year due to lack of funding. You will need to be able to handle your own finances for a while without taking a profit from the new store. Try to figure your expenses as close to actual as possible, and then add in some extra money for unforseen happenings. Also, figure profits on the low side so as not to be left in a bind if you have a slow start!

Uncle Fester, what is the name of your friends place here in Tampa?
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BBQBubba



Joined: 18 Mar 2006
Posts: 10

PostPosted: Sat Jun 03 06 8:41 am    Post subject: Reply with quote

There is only one other BBQ restaurant in this town. All others are either Mexican, fast food burger joints and two buffet types in a town of about 25,000 people.
An article was recently written in the local paper that growth over the next 4 years was expected to be about 40,000 in addition to our current population. There is a large growth moving S. of Houston and we are next on the list for this growth movement.
I have live in this town for 45 yrs and know alot of people. I have been told for years that that my meat is far better that what is available here now. The past year I have done a few catering events ( weddings, family and school reunions) and they have all gone well thus far.
My guess that the current local BBQ business would easily seat 150+ people and every day is nearly full at lunch and dinner times. I sat in on several occasions and watched 30 people come through the line in 20 minutes from opening.
I feel I have a very warm market here to begin with and spreading business by word of mouth will be no problem.
I've read that the cost for your served plate should not exceed 25% of the sale price. If I were to serve 100 people a day with an average each spending 7.50, Would this even begin to be feasible with $2,500 month lease, $500 a month in insurance, electric ?, gas ?, wages ?, supplies ?
Any other comments or suggestions would be greatly appreciated and thank you already to Uncle Fester and BBQMan
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BBQBubba



Joined: 18 Mar 2006
Posts: 10

PostPosted: Sat Jun 03 06 8:43 am    Post subject: Reply with quote

Thank you to KJ also.
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BBQMAN
BBQ Super All Star


Joined: 13 Jun 2005
Posts: 15474
Location: Florida

PostPosted: Sat Jun 03 06 7:16 pm    Post subject: Reply with quote

Sounds like you have a good start there!

You should also consider a beer and wine liscense. Beer goes great with BBQ, and has a very high profit margin. It will however up the cost on your liability insurance, but should be well worth it!

Keep us posted on how things go for you! Very Happy
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kjwalker
BBQ Fan


Joined: 20 Dec 2005
Posts: 165
Location: Shanghai, China

PostPosted: Sun Jun 04 06 7:39 am    Post subject: Reply with quote

Where are you exactly? I know south of Houston a little and got around to most if not all of the que restaurants in the area.
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BBQBubba



Joined: 18 Mar 2006
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PostPosted: Sun Jun 04 06 7:45 am    Post subject: Reply with quote

I live in Alvin. Looking at areas along hwy. 6 or downtown.
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Reflect
BBQ Fan


Joined: 16 Nov 2005
Posts: 220

PostPosted: Wed Jun 07 06 1:47 am    Post subject: Reply with quote

Get with the SBA (They don't just work with loans they have some GREAT resources) and make a business plan now instead of later. It wll help answer questions of this nature. Also don't outsource the writing and research in the business plan, that is a sure sign for failure IMHO.

Take care,

Brian
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JimH
BBQ Super Pro


Joined: 09 Feb 2005
Posts: 1978
Location: Houston, TX

PostPosted: Wed Jun 07 06 2:08 am    Post subject: Reply with quote

BBQBubba wrote:
I live in Alvin. Looking at areas along hwy. 6 or downtown.


Alvin is exploding in growth and your closest competition is that place in Manvel that is also an Ice House if I remember correctly. You should do very well because it's one of the few places without much in the way of BBQ.
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