Revenue & Profitability

COGS

COGS Targets

Food: 30% Wine: 33% Beer: 35% Spirits: 22% NA: 35%

Typical restaurant wine mark-up is x3. So, a bottle that comes in at $10 wholesale will be on the list at $30. If all wines are marked up exactly x3, then wine COGS should be exactly 33%.

COGS are comprised of two main calculations; dollar value and percentage of total sales

In restaurants, we typically aim for 25-33% COGS. When we price product to achieve 30% COGS, that means for every $100 in sales, it will cost us $30 in wholesale product. Example: we purchased a bottle of wine for $30, but sold it for $100. We make 30% COGS. 

Every month we calculate our COGS for each category of sales. To do this, we first use a calculation to determine the exact wholesale dollar amount of items that were in stock at the beginning of the month, but that are no longer in stock. 

  • COGS = Starting Inventory + Purchases - Ending Inventory

  • Example: We had $1,000 worth of beer on Jan 1. We purchased $600 worth of beer during January. On Feb 1, we counted $700 worth of beer on hand. Our COGS dollar amount is: 

    $1,000 + $600 - $700 = $900 (meaning, in January $900 of wholesale product was sold) 

  • Next, we divide the COGS dollar amount by sales to calculate our COGS percentage 
    Example: In January, we had $2,800 in beer sales. 
    $900 COGS / $2,800 sales = 32% 
    Our COGS Percentage was 32%, which is within our target range

Common COGS Issues

Forgetting to count a zone when doing inventory

  • If the bartender forgot to count, say, the beers on the rooftop bar, or a shelf in the wine room, the Ending Inventory will be underrepresented, which makes our COGS appear too high 

Theft or Not Ringing Something In 

  • When sales are not rung in for product that was consumed (via theft or forgetting to ring in sales, or accidentally ringing in sales under the wrong category) the sales # will be off, and our COGS will appear too high 

Taking Inventory Counts from Sheet to Shelf, instead of Shelf to Sheet

  • When staff counts from sheet to shelf, instead of shelf to sheet, they will miss any  new product that didn’t make it to the sheet. Counts will be missing on the inventory, and the Ending Inventory will be underrepresented, which makes our COGS appear too high

Labor Cost

Calculation

  • Cost of staff (payroll costs / gross sales)

  • In the f&b sections of all team month in review reports, payroll costs are based on the variable scheduled labor. It will not include salaried managers nor fixed schedule hourly employees like concierge. Using the tip sheet, use the cells “wages paid” and “supplement paid.” 

Staffing
Efficiency

Calculation 

  • labor hours / total club visits (including programming and events)

  • In the club, we have periods of service when guests are using the club and we need to provide service, yet not much revenue is being generated. Essentially staff efficiency is recognized as the number of staff hours needed to serve a given number of visitors. 

  • Membership dues contribute to the labor costs of coworking or free programming events. This interferes with how labor cost performance is traditionally evaluated.

Sales & Cash Flow

Drive Sales

Check average

  • Upselling

  • Add-ons

Club visits

  • Invite guests to return

  • Develop regular guests

  • Recover and impress after mishaps

  • Hype up parties, programming, and the chef

Minimize loss and waste

Accuracy of checks: common items left off checks are bottled water and bottles of wine since they don’t come from the service bar

Maximize profit

Mark up appropriately to at least hit the COGS targets, but take advantage when demand permits: holidays, parties, etc.

Cash Handling SOP

    • We have 4 x $200 banks totaling $800 on-site

      • Event (in safe) $200

      • Social Hall drawer $200

      • Rooftop drawer $200

      • Birdie’s drawer (CH2 only) $200

    • Cash sales and tips from previous services are stored in the club safe

    • The default $200 bank is:
      Twenties: $100
      Tens: $150
      Fives: $175
      Ones: $75

    • Collects cash payments from guests and turns in all cash (sales and tips) to the closing manager.

    • Making Change: The drawer at the bar may be used for making change for guests

    • A large bill goes in, and the same quantity is removed in smaller bills. Change is issued to the guest and the sales are retained by the server.

    • The bartender is responsible for their drawer.

    • Count the drawer to $500 at the beginning and end of their shift.

    • The amount over $500 should equal the cash sales + cash tips collected.

    • Sales and tips are turned into the closing manager.

    • Count and distribute cash to the drawers: am mod should retrieve the bank bags from the safe, and distribute the cash to the cash drawer.

    • Reset to default pars: The drawer should have enough change by Friday so we are prepared for the weekend. Make change from the event bank or at the bank. Avoid opening daily envelopes to make change.

    • Receive cash from staff: Collect cash from servers / bartenders at the end of their shifts, and note sales and tips on the daily cash envelope.

    • Deposit Tracker: Note sales and tips by day in the Daily Cash Drop tab in your club’s Petty Cash spreadsheet. Use this document to update the cash tips in our payroll software (Dolce).

    CH1 Petty Cash Spreadsheet

    CH2 Petty Cash Spreadsheet

    CH3 Petty Cash Spreadsheet

    • Counting: Each daily envelope is opened and counted. Over/short is noted in the comments section of the Daily Cash Drop tab in your club’s Petty Cash spreadsheet.

    • Alert the mod: Prior to making a trip to the bank, but after counting the contents of the safe, alert the mod so they can check both bar banks to reset them to the default.