Any restaurant managers out there?

I have a question about profit margins and will post it if I get a yes response.

Thanks in advance.

Was a GM for a few years out of college at a regional corporate restaurant that specialized in pizza and italian.

I'm pretty familiar with the business model and structure.  It's basically a "big three" model, at least ours was.  Balance Labor, Food Cost and Overhead (rent,utilities) with projected sales and thats how we got our profit margins.  We had expected sales and based on actual sales thats how we forcasted.  Hope this helps bro....I'll try to answer any specific questions if you want to post them.

     I need to find out what a restaurant would pay for a good 12 oz USDA PRIME GRADE strip.  I'm looking to supply a restaurant with them and have no idea how to price this.  My good friend told me he pays an average of $5 per steak (12 oz. choice strip) at his restaurant.  They cut their own and with my product they wouldn't have to.  They are frozen and individually vacuum sealed.  He sells his steaks for $14.99 and I'm sure they give you a salad and potato.  I can offer my steaks to him for less than half that, and I can't imagine that's NOT a good margin for him.

I put together a spread sheet and I need to talk to my supplier to see if I can drop ship at what quantity, and if I can get price breaks.  I used to negotiate with electrical suppliers so I'm not a total newbie to this game.  However, I am a newbie to pricing beef.

These steaks I have are the bomb, and my pricing will allow him to make 100% plus.  Of course he has spices, marinade, and sides to consider. 

I'm going to try his steak.  If it doesn't touch mine in quality, I will have leverage.  I'm pricing him at around $6.85, but with quantity he can get as low as $6.26.  However, he doesn't believe he has market for prime grade steaks.  In other words, he's not sure if that will actually sell more steaks for him.  I tend to disagree.  If you advertise prime and serve an exceptional strip, word will get around.

 If you are lucky enough to double your investment in a restaurant, get out as quickly as possible.  Most of them are money pits in the long run.  

Food is roughly 35%. You are over that.

Esplanade... different foods have different profit margins. Some restaurants make over 2,000% on pasta dishes. Nonetheless you are thinking my prices are way too low correct?

Here's some advice. Go manage a vegan restaurant and you won't have the steak issue.

He didn't say that. He said his friend currently pays $5 a steak, but the ones the he offers are far better quality, so he plans to offer them to him at $6.85, which is less than half of the $14.99 sale price that the guy sells them, marinated, cooked, and with a side.

I have no experience to chime in unfortunately. For a top steak, $14.99 would be on the low end of price though for my area, but I imagine my area has a higher cost of living than Ohio. A steak in a decent spot where I live is around $21.99 to $25.

It really depends on the customer base IMO. There are higher margin items like **DRINKS*** appetizers, desserts. If no one buys the higher margin items, the restaurant won't make too much money. I think the other guy is right, and $6.85 for just the meat is pretty high cost and doesn't leave too much room for profit after paying the rent, the cooks, and the electricity.

 

Items should be set at 3.5-4 times the the cost. One time for overhead, one time for labor, one time for the cost of the item, one time for yourself as an owner. That is how it's done. 14.99 is a cheap steak, cant find them around here.

F&B is a Trap get out if u Do NOT work on TIPS

Big Red is a vegan?  That explains why he is so ill-tempered.  You'll never meet a healthy or happy vegan.

i know a vegan and that broad is sick all the time. 

     In this part of Ohio there's not a whole lot of great restaurants to eat at.  You really need to go to Cleveland or Akron for the good places.  I don't eat out much though because I generally consider it a waste of money.  Especially when I know I can grill a killer steak at home.  And when you enjoy grilling, you're killing two birds with one stone.

     If you're ever in the Canton area, go to Baker's Cafe for steak.  Hands down the best steak in the area.  Fans of Lucia's will argue however. 

    

Yup Jon Fitch is super unhealthy.

I don't have knowledge with regard to steak but LarryWayne's response is the most accurate

I will say tho if you're just trying to supply this item to this restaurant and have nothing to consider other then the cost to you, some good old fashioned negotiating is the move. Find out what they pay for other similar items comparatively speaking and start there. It would be diff if wholesaling was ur business and there were other expenses to consider but sounds like ur doing this for supplemental income?

Possibly, if he ate meat he might of won more fights and UFC would have not cut him. 

No, no, no.  It doesn't work like that.  The market determines prices, not a formula.  

For an individual item market does determine price. What I meant was labor, overhead, food cost determine profit. It's a cumulative thing with regards to operations management I'm not sure if that's what he meant

No offense, but I had a co-worker that came from Ohio once. She was shocked when she moved here that a 1BR apartment started around 1100-1200 a month plus utilities and stuff.

$22 would be a decent steak starting around here. A good one is probably in the $30-40 range. Some of the upper scale places you're not leaving without spending at least $50 a person with tip.

The more expensive and better stuff is usually in the city. If he is surviving with his non-chain restaurant at $14.99 a steak, he's got his pricing niche, and I wouldn't be willing to either shave my profit or pass the pricing increase onto the customer.

Everyone knows that you get what you pay for, and if they want an upper scale steak, they can go to the city.

Applebees has a 2 for 20 thing where you get an entre and an appetizer for 2 for $20 total. One of the entrees is a 7oz sirloin steak which is pretty crappy, but they sell it with an appetizer for $10. He has that to compete with too.