Why Most Restaurateurs Don’t Actually Know Their Numbers

After more than fifty years in kitchens and opening multiple restaurants, I can tell you something that most people don’t expect to hear.

Most restaurateurs don’t actually know their numbers.

They think they do.

They know what their food cost “should be.”
They know when payroll feels too high.
They know whether the restaurant was busy last weekend.

But none of that is the same as truly understanding the business.

Restaurants are not sustained by activity.

They’re sustained by margins.

And margins are built on numbers — real numbers — not assumptions.

The “We’re Busy” Trap

One of the most common things I hear is:

“We’re busy all the time, but we’re not making money.”

And right behind that usually comes:

“Volume cures all.”

There’s some truth to that.

But only if your structure is correct.

If your menu is engineered properly…
If your labor is controlled…
If your margins are right…

Then yes, volume can amplify profit.

But if those things are off, volume doesn’t fix anything.

It just makes you lose money faster.

That’s where most operators get stuck.

They focus on getting more people in the door instead of fixing what happens after they walk in.

It Starts With Prime Cost

If you want to understand your restaurant financially, you start with one number:

Prime cost.

Food cost plus labor cost.

That number has to stay under 60% of your total sales.

And realistically, you want it closer to 55–58% if you want to build something sustainable.

Because once you layer in everything else — utilities, supplies, rent, taxes — there’s not much room left.

If your prime cost is too high, the math simply doesn’t work.

It doesn’t matter how good the food is.
It doesn’t matter how busy you are.

You can’t outwork bad math.

Labor Is Where Most People Drift

Labor is one of the biggest areas where operators lose control.

And it’s usually because they treat it like a fixed number instead of something that needs to be managed throughout the day.

Labor isn’t static.

It’s a moving target.

If you’re using a system like Toast, you can see your labor cost against your sales in real time.

That means you should know, at any given moment:

Where your labor percentage is
Whether you’re overstaffed
Whether you need to adjust

But most people don’t manage labor that way.

They write a schedule… and then they react after the fact.

That’s too late.

Good operators are constantly adjusting.

They phase people in as business builds.

They phase people out as it slows down.

Labor is not a switch.

It’s a dial.

Scheduling Is About Patterns

One of the simplest things we used to do — and it still works today — is track patterns.

What day it is.
What the weather is doing.
Whether it’s a holiday weekend.

All of that matters.

Because business isn’t random.

It follows patterns.

And if you understand those patterns, you can schedule more accurately.

That’s how you avoid overstaffing slow periods and getting crushed during busy ones.

The Cost of Small Things

Another place where numbers quietly get away from people is controllable costs.

Everyone focuses on food and labor, but the small things add up fast.

Burners left running all day.
Fryers running longer than they need to.
Lights on in empty areas.
Linen usage out of control.

Then you add:

Disposable containers
To-go packaging
Supplies

None of these seem like big issues on their own.

But together, they move your controllable costs well beyond where they should be.

And once that happens, your margin starts shrinking without you even realizing it.

Why PMIX Matters More Than You Think

Another mistake I see all the time is operators looking at food cost without looking at menu mix.

They’ll say:

“My food cost is around 32%.”

But they don’t know why.

That’s where PMIX comes in.

You need to know what’s actually selling — and how much of it.

Because one item can throw everything off.

If you have a high-cost item that represents a large percentage of your sales, it will drag your entire food cost up.

Even if you have lower-cost items on the menu.

So it’s not just about what things cost.

It’s about what people are actually buying.

Costing Has to Reflect Reality

I’ve never believed in perfect, theoretical costing.

Because restaurants aren’t perfect environments.

Things get overcooked.
Food gets wasted.
Portions drift.

So I always build in what I call a buffer.

If your numbers only work on paper, they don’t work.

They have to work in real life.

Not All Dollars Are Equal

One thing that gets overlooked is the difference between percentage and actual profit.

Some items may have a higher food cost percentage but still generate more dollars to the bottom line.

Those are your real winners.

At the end of the day, the only thing that matters is what actually goes into the bank.

Not just what looks good on a spreadsheet.

And Then There’s One More Thing

Even if all your numbers are right…

Even if your margins are perfect…

None of it matters if the guest doesn’t feel like it was worth it.

That’s what I call perceived value.

If someone pays for a dish and feels like they could have made it better at home, you’ve already lost them.

But if they feel like they got their money’s worth, they come back.

And repeat business is what makes the model work.

Final Thought

This business is not just about food.

It’s about math.

And it’s about discipline.

You have to know your numbers.

You have to understand what’s driving them.

And you have to manage them every single day.

Because at the end of it all:

Food brings people in the door.

But numbers keep the doors open.

— Chef Joseph Chouinard
The Hospitality Doctor