Real-Life Math
"A restaurant manager uses math every second of every day. We have to be able to, of course, count money, but also figure out if our current labor and sales are going according to our budget for the day, do inventory, calculate food and labor costs. It goes on and on," says restaurant manager Eric Brandt.
While you don't need to be a math whiz, you do need a solid grounding in the basics. In this business, a wrong calculation can make the difference between making a profit and losing money. In fact, without basic math skills, you wouldn't be able to do the job.
Brandt knows this very well. He has managed restaurants for years. "Every successful restaurant operates on a fairly tight budget," says Brandt. "A tight budget doesn't mean you don't spend any money. It just means that you have to be very careful about what every dollar is spent on. It's the manager's job to make sure that every dollar is spent wisely."
In any restaurant, the biggest expense a manager has to keep an eye on is food. The next big thing is the cost of labor.
"Labor is how much all of the people who work in the restaurant get paid," says Brandt. "One of the hardest decisions a manager has to make on a day-to-day basis is when to send employees home. Labor cost is always calculated as a percentage of the total sales of the restaurant, so the slower business is, the smaller the labor budget is.
"On one hand, every minute that the employee is working, they are costing the company money. On the other hand, when the restaurant is busy, or might get busy, the employees need to be there to take care of the guests and make the company money. Sometimes, when the restaurant isn't very busy, the manager has to send an employee home and then do that employee's job him or herself in order to keep labor cost for the day within the budget."
It's 8 p.m. on a Tuesday night. The restaurant will be open for another hour. There are 4 employees on duty: 2 cooks making $8 per hour, a bartender making $6 per hour and a server making $3 per hour. All 4 came to work at 4:00. Each employee has about 2 hours of work left to do, including his or her clean-up time.
You must figure out whether you need to send one of your employees home early. If so, which one? To do this, you'll need a few facts. You know what their hourly wages are, as well as the length of their shifts. From that, you'll have to figure out how much you've already spent on labor this day, and how much more labor will cost you by the end of the night. Here are some more facts:
Sales for the day were expected to be $500. So far, there has only been $420 in sales. You know from experience that the last hour on a Tuesday will only bring in about $40 more in sales, bringing the day's total to $460. Your labor budget is 30 percent of your total sales.
Do you have to send someone home? If so, who do you send home?