Success Story

Focus on Prime Cost and Engaging the Entire Staff in the Process Provides Ownership with Ideas for Solutions

You can't manage what you don't measure, the old saying goes. But armed with RestaurantOwner.com's Prime Cost Worksheet, Matt and Jessica Borza are doing a great job of both.

For the longest time, the Borzas were able to manage their restaurant on gut feeling and strong memory. But over the 20 years, their restaurant had grown exponentially.

"Costs became out of whack, profitability was suffering, and it was difficult for me to put my finger on the root cause," Matt recalls. "The restaurant was not as profitable as it should have been. With the high volume, it was mind-boggling why profits weren't where they needed to be. In fact, it was losing money even in spite of strong top-line growth."

While the couple has implemented several strategies gleaned from RestaurantOwner.com, Borza says "the best system by far" was the Prime Cost Worksheet. Adopting it forced the Borzas to look not only at their costs, but at implementing several underlying systems to enable them to arrive at those numbers. Uncovering this information, he says, "was definitely eye-opening. We were able to see right away that both our food and beverage costs were much higher than industry average."

Having the ability to see the numbers more clearly and benchmark against the industry was, of course, quite helpful. Over the course of last year, he notes, "We were able to dig into our costs. In some cases, we found that we weren't holding our vendors accountable for pricing. In other cases, we realized that we needed to increase our prices to cover our costs."

The corrective action taken in 2017 enabled the couple to enter 2018 strong. "We built a budget to guide our decisions and monitor our revenue and expenditures."

In addition to their fiscal systems, the Borzas also improved their communication in 2017. As he explains, "We are fortunate to have a fantastic team, and our turnover is very low. However, we hadn't shared a lot of information about the business with our staff in the past." The couple used the data from the Prime Cost Worksheets to educate the team about the restaurant's costs, and to engage them in developing ideas and solutions that contributed to the bottom line.

"We organized a challenge to both the front-of-the-house and kitchen teams,- Borza recalls, and incentivized them to adopt some of the changes necessary - and had fun celebrating our successes together when they achieved results."

The Borzas also started holding all-staff meetings for the first time last year. "At our last meeting, one of our team members asked us to post the numbers again. We had been posting the weekly prime cost figures for several months in 2017 during our internal staff competition, but had stopped doing it once the competition was over."

As it turns out, the staff actually liked seeing the numbers and having a better understanding how they were doing as a business. "At their request, we have started to post them again."

Borza says he and his wife are enthused about the rest of 2018. "Not only have the changes we've made and the systems we've adopted given us peace of mind, but we also have been able to plan improvements to the facility that we couldn't fathom even one year ago."

The Borzas are planning a renovation to the facility that is intended to give their more-than-a-century-old building a facelift and better functionality. "It is gratifying," he concludes, "to be able to reinvest in the business."