Veteran chef and business owner, Jacqui Tyson, says understanding finances is a crucial part of running a successful food business.
Tyson has worked in the food industry for 24 years and is the owner and Creative Director at From Thought to Finish.
Speaking on MoneyMovesJa with Kalilah Reynolds, Tyson said that owning a restaurant or a cook shop is one of the riskiest businesses as sales tend to fluctuate drastically.
“For you to cook and serve people you have to be very brave and you have to be very creative because your a high risk taker. Every day your taking a risk because you don’t have any set figures unless you have a set contract,” she said.
This is made worse by the fact that many business owners, especially smaller establishments, are not tracking their daily expenses.
“In today’s world, costs are continually escalating; what you buy one product for today when you go back to the market it’s different,” she explained.
She said that for business owners to make the best and most accurate decisions, they must have a clear understanding of their profit margins.
“For example, if you serve 60 lunch at $1000 each, that 60,000 but your expenses come up to $45,000. By the time you take out your gas and everything, you’re really only going home with $5,000 profit,” she said.
“But because we’re not calculating it like that, we don’t realise that it’s a small profit margin we’re working with,” she added.
She said that to keep prices down, owners need to be innovative and how when to swap out menu items.
Additionally, she said it is important to know when to cut your losses and start over.
“I learnt from studying in Europe that when something is not giving you the returns, lock it down. Stop the bleed immediately,” she said.
Tyson’s other tips were, “don’t let the passion leave you and find things that you do well and stick to them and maximise them”.
“If you do a good stew peas, or a good curry goat, then people will eat that,” she said.
However, she emphasised that understanding your costs is the main factor in keeping the doors open and then customers coming.
“Every little bit you spend, just keep a book and write down how much it cost to do 40 or 60 lunch; that will tell you the real cost of the lunch,” she advised.
