Every business has different types of costs. Imagine if it didn't take cold hard cash to run a business? We'd see all sorts of weird, curious endeavors! But business owners live with the reality that money keeps the entire production alive.
Today let's chat about sunk costs. My completely botched definition, which would make my economics professors shudder + change my grades, is that sunk costs are those that you have to pay for regardless of if you even have sold anything.
My primary business at the moment is my Etsy shop + MAN I know about sunk costs. Luckily it's an online shop + it's just me at the moment, so I don't have to worry about much overhead. I do take on the cost of my materials, which includes the matte board + shipping materials too. I also bought my own matte cutter so I could custom make each + every order, but hey, I can keep my costs low.
Restaurants, however, aren't quite as lucky.
Restaurants have plenty of sunk costs (and trust me they're a stressor!) Breaking them down can illuminate what’s critical to the day to day operations of a food business.
Three expenses your client worries about
Have you ever been in a restaurant where the owner was also cooking, seating people, serving + busing tables? Not really, right?
Sidenote: restaurants with this scenario will always have the best food + worst service, but moving on...
There are so many roles in a professional restaurant because the restaurant experience is much more than just the food. From start to finish there is a person to attend to your needs—but most restaurants will aim to keep their restaurant staffed as lean as possible.
Integral staff members will differ from restaurant to restaurant, but additional staff will most likely be part-time employees or contractors to keep labor costs low.
Rent costs are exactly what they sound like, the costs paid to a landlord for using their space.
This is a huge expense especially for businesses in major cities where rent is increasingly rising. This cost is a fixed + non-negotiable cost. At the very least, every restaurant needs to pay their rent.
Rent forces even the greats out of their space. So when rent begins to creep up, you have to be sure that financials will be reviewed to trim excessive or luxury costs.
It doesn’t matter if the kitchen is fully staffed, there are customers in their seats or if the menus are expertly designed—there needs to be food.
All food is not created equally. Purchasing premium ingredients, organic produce or buying from local farms will run up the food bill more so than bulk purchases from food distributors.
Food costs differ greatly from restaurant to restaurant often reflected in menu prices. The price of food fluctuates (+ is usually going up + up) so prices will adjust with those market changes.
So where do you fit in?
With rising rents, increasing food prices + director of operations looking to trim their staff, a designer or marketer needs to be indispensable to stay on the books.
An aspiring executive chef might start as a dishwasher. You might start as a contract employee. And hey, being a contractor is a great opportunity!
Here are a few of my top tips for working with a restaurant or food business a a contractor:
This one is easy. Show up. I know this seems like a 101 tip, but honestly, you would be surprised how often people can drop the ball on this one. Arrive + leave when you are asked to, but always show up mentally + (of course) physically.
No task is too small
Throw your job description to the window, because sometimes it's all hands on deck at a restaurant. At one of my previous jobs, I would have to package up gifts for concierges or move chairs for seminars while I was hired to assist with social media. Make sure that you are not being taken advantage of, but sometimes heavy lifting will be required to be a team player.
Know when to pick your battles
Again, you should never feel like you are being taken advantage of, but sometimes when it comes to your work fighting too many battles is just not worth it. Remember you are working for someone else + they will usually know what is best for their business. This is a good thing because they're sharing how you can help them out! Learn from them + you will prove your worth easily.
Food for thought // How do you prove your worth for your clients? List five ways you are indispensable + three ways you can improve. Embrace what you are good at + work on improving in your weaker areas.