Alice has a small restaurant. She’s a fantastic cook and the tables are full every night. But she’s making barely minimum wage, because the cost of inputs—meat, veg, staff—keeps creeping up. How did she boost her income into six figures?
Making money in the restaurant business is about inputs, not just outputs like number of covers. In her market, she can’t just double her menu prices, so she has to look at how she can create the profit margin she needs to make her £100,000. By finding out where her talents truly lay, she ended up with a completely different menu . . . one designed for profit.
Today, every dish on her menu is put together from a minimal list of inputs—ingredients she can buy in bulk. Only then does she think about what dishes to cook from them. (These are her real professional skills: her creativity as a chef. Anyone can cook a great dinner from the priciest ingredients, but it takes real skill to turn the basics into a celebration on a plate.)
Instead of hand-cut beefsteaks, she buys—essentially—a huge side of steer, and does the bladework inhouse. Instead of precut chips, she orders a huge sack of potatoes and cuts them herself, serving six jumbo fries per dish instead of a shovelful.
In short, she doesn’t use anything where she’s paying someone else’s value-add. Her Critical Success Factor is how much value she can add to that side of beef herself, using her special expertise.
Today, her menu is smaller (half a dozen dishes or so) and her cost of ingredients per dish even smaller. The gross profit margin on each dish hits 80%. Alice’s tiny fifty-cover-a-night dining room now serves her up £122,000 in net profits, a tripling. Turnover (the amount diners pay) hasn’t risen much, and didn’t need to: she concentrated on profit margin not sales.
Alice’s issue was cost control. By bringing some underused skills into the mix, she cut costs massively with the bonus of a much smaller menu reducing wastage and hassle. She concentrated on the things that showed her creativity and cut out the rest. Alice is a six-figure freelancer.