The Unwritten Rules of the Industry

Before you open Excel, you need to understand the philosophy of the floor. Below are 10 non-negotiable truths — just a small sample of the operational frameworks included in the main Operator's Toolkit.

Excerpt from Module 1: Operational Foundations
Financial Reality

1. Theoretical vs. Actual GP

Most owners look at a recipe card and say, "This burger costs $4 to make, I sell it for $16. My cost is 25%." That is Theoretical GP.

Actual GP is what remains at the end of the month after:

  • The chef burned 3 steaks.
  • The bartender gave a free shot to a friend.
  • The delivery truck shorted you 2kg of avocados.
  • Staff ate lunch without ringing it in.

"The Variance is where you bleed."

If your Theoretical is 75% and your Actual is 68%, you are losing 7% of your revenue to mismanagement. Our Toolkit includes the stock take sheets to close this variance.

Strategic Planning

2. The Chicken or The Egg?

Do you build a concept and find a site, or find a site and build a concept?

The Visionary

You have a rigid concept (e.g., "Authentic Nashville Hot Chicken"). You wait 12 months for the specific extraction and footfall required. You do not compromise.

The Opportunist

You find an incredible corner unit with cheap rent near a university. You ignore your personal dreams and build exactly what that street needs (e.g., Cheap Pizza & Beer).

The Fatal Mistake: Trying to force a specific concept into a mediocre site just because you are impatient to open.

3. The Chain of Command

A restaurant is an army. Without hierarchy, you have chaos. Here is the typical structure:

The Brain (Office)

  • Owner: Strategy & Financing.
  • General Manager (GM): The Captain. PnL responsibility.
  • HR/Admin: Payroll & Compliance.

The Face (FOH)

  • Restaurant Manager: Ops & Standards.
  • Sommelier: Beverage GP control.
  • Waiters: The Sales Team.
  • Runners: Logistics.

The Engine (BOH)

  • Head Chef: Menu GP & Ordering.
  • Sous Chef: Enforces standards.
  • CDP: Runs the station.
  • Kitchen Porter (KP): Critical. If they stop, the restaurant stops.

4. The "All-Day" Trap

Opening for Breakfast, Lunch, and Dinner looks like "maximizing revenue" on paper. In reality, it destroys labor models.

The Cost: You need two full teams (AM/PM). Utility bills soar. Staff retention plummets due to "Split Shifts."

Tip: Do one service perfectly before you attempt a second.

5. The Holy Grail: Private Events

This is where the actual net profit lives.

  • Room Hire: 100% pure profit margin.
  • Canapés: High GP compared to plated meals.
  • Whole Venue Hire: Charge a minimum spend for the whole building. Your GP will go through the roof.
  • Labor: Fixed and predictable. Zero wasted hours.

Build a name, then leverage the brand for corporate buyouts.

6. Bank Cash, Not Percentages

You can take a lower percentage margin to bank a higher cash profit. Don't be afraid of a lower GP% on premium items.

Bottle Type Cost Sell Price GP % Cash Profit
House Wine $5 $20 75% $15
Winner Bottle $30 $65 53% $35

The Play: Incentivize staff to sell the "Winner." The customer drinks better, the staff gets a bonus, and you bank more cash.

7. The "One In, One Out" Rule

A large menu is an inventory nightmare. 50 items require 500 ingredients. This causes spoilage, slow prep, and inconsistency.

The Golden Rule:

If you add a dish, you must remove a dish. Keep it tight.

Target:
25 Items
Max

8. The "3-Day" Rule

Inventory is just cash sitting on a shelf. If it sits there for a week, it's rotting money.

The Danger Zone

Buying bulk to "save money." If you buy 10kg of basil for a discount but throw away 4kg, you lost.

The Discipline

Order tight. Never hold more than 3 days of perishable stock. Running out creates demand; serving old food destroys reputations.

9. The Transmission: "The Expo"

In a busy service, the kitchen is the engine and the floor is the wheels. The Expo (Expeditor) is the transmission.

The Expo stands at the pass. They do not cook. They do not serve. They:

  • Call tickets.
  • Quality control every plate.
  • Control the pace of the room.

"A kitchen without an Expo is a car without a steering wheel."

10

10. Rent is Fixed, Time is Variable

You aren't just selling food; you are selling time at a table. Your rent costs the same whether you serve 50 people or 150 people.

Turns per Night Guest Count Financial Result
1 Turn 60 Guests 🔴 Break Even
1.5 Turns 90 Guests 🟡 Profitable
2+ Turns 120+ Guests 🟢 The Dream

The Art of the Turn: Clear plates promptly and drop the check swiftly without rushing the guest. It is a hospitality ballet.

This is just the tip of the iceberg.

Our Toolkit contains the actual PnL templates, shift schedulers, and menu matrices to manage all of this.

Get The Full Toolkit