“You make money in rooms and lose it in food and beverage.”

That was the very first sentence I heard in my first Hospitality Management class at Michigan State University. Forty years later, I still haven’t forgotten it.

Decades in the hospitality industry have taught me that my professor was right—to a point. But finding the exception to that rule was the whole point of going to school: learning how to actually make money in food and beverage.

There isn’t a whole lot of magic to making a profit in this industry. It comes down to solid planning, hard work, and relentless attention to details.

Reflecting on my career, here are three essential lessons every operator needs to master to keep their bottom line in the black.

1. Location Means Understanding Your Demographics (Not Just Visibility)

Whether you’re operating a brick-and-mortar sit-down, a quick-service spot, a ghost kitchen, or a food truck, one rule remains supreme: you must be where your target customers actually are.

I recently saw a major burger chain allow a franchisee to open in a heavily trafficked retail area. It was on a main road right next to a Walmart, built to exact company specifications—complete with table service, takeout, and a drive-thru. The food was delicious and priced right, the building was brand new, and yet . . . it failed within six months.

What went wrong? The franchisor looked at surface-level demographics and missed the real story: the store was built in the heart of an Orthodox Jewish neighborhood (in fact, one of the neighboring stores was a Kosher grocery store). They don’t mix milk and meat at the same meal, so no cheeseburgers.

A standard non-Kosher burger joint was doomed from day one. Great visibility means nothing if the local community won’t eat your food. Always research the deep cultural and lifestyle dynamics of a neighborhood before signing a lease.

A great resource for finding a good location is a book by Heather K. Turner – Finding a Location for Your Restaurant. It is easy to read and full of great ideas. You can find it on Amazon.

2. Your Menu Isn’t About You—And Home Recipes Don’t Scale

Just because you love a dish doesn’t mean a crowd of paying customers will. Furthermore, the favorite family recipe you make at home rarely scales cleanly when you’re suddenly prepping it in mass quantities.

Before putting a dish on your menu, follow this process:

• Test at scale: If you don’t already have access to a commercial kitchen, rent time at a local commissary kitchen equipped with commercial gear (if you’re in the Greater Cleveland area, you have several great options to choose from) to see how the recipe behaves in high volume.
• Gather real feedback: Don’t rely solely on friends and family—they love you too much to give you the brutal truth. Take your scaled dishes out into your target community. Host a tasting at a local church, sponsor a community event, or cater a private house party to get raw, unbiased input.

3. Set SMART Goals to Stay on Track

There’s an old saying in business: “If you don’t know where you’re going, any road will take you there.”

To keep your business focused through the chaos of launching and operating, you need SMART goals:

• Specific
• Measurable
• Attainable
• Relevant (to the business)
• Time-bound

Once you identify where you want your business to go, establish three to five SMART goals for your first year (including your pre-opening development phase). For every goal you set, outline two to three actionable strategies to help you achieve it. This applies to ongoing restaurants as well.

What’s Next?

Want to dive deeper into building SMART goals specifically tailored to restaurants? Keep an eye out for my next post, where I’ll share real-world examples you can adapt for your own venture.

Over the coming weeks, we’ll also tackle purchasing strategies, labor optimization, waste control, and the critical operational details every restaurant owner needs to master. See you in the next post!

Richard M. Brooks
Certified Business Mentor
Email: richard.brooks@cbmentors.org
Cell: 216.403.7284
Website: https://clevelandbusinessmentors.org

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