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#1

How Do Buffets Make Any Money?

03-25-2005, 03:50 PM

I have a business degree and it still baffles me on how some buffet-style restaurants can make money.

For Example:
There is this buffet-style restaurant in town that offers all-you-can-eat seafood for $19.95. They offer lobster, snow and Alaskan king crab, shrimp, clams, oysters, fish, mussells, and other smaller seafood items like stuffed crab and hush puppies.

Now if you break it down, they should lose thier asses off if someone of average size came in to eat and got filled up. An average sized person (5'10" 175) can consume at least 2 lobsters (roughly 1lb a piece) a pound of crab, and some other smaller items like shrimp and clams.

The restaurant is obviously not spending as much on seafood as retail but wholesale prices even do not justify them making a profit. Let's say the lobster is going for $5 a lb, the crab legs $4 a lb, shrimp $4 a lb, clams about $3 a doz. That means just the average person will eat $21 of food.

That is just the price of the food. This doesn't include overhead like employees, rent, electricity, water, waste disposal, etc.

HOW DO THEY DO IT?!?!? Anyone ever run a buffet before and can give me some numbers to play around with? I'm completely baffled.
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#2

03-25-2005, 03:52 PM

Alcohol!
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#3

03-25-2005, 03:52 PM

It doesnt cost much money for them to buy it, since they buy bulk. My guess is that the drinks arent free either

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#4

03-25-2005, 03:54 PM

Originally posted by Fred Quimby

Alcohol!

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#5

03-25-2005, 03:56 PM

Drinks are part of it but food costs are lower then what you posted too. They don't get top quality

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#6

03-25-2005, 03:58 PM

The fat ass who can eat two lobsters, has a tiny gf that doesn't eat much = $$. Myabe they even have kids... who don't eat much = $$ (they don't charge them as much, but stil a lot). They drink a lot = $$. Extras, if they have that. If it's at a casino = $$. And most importantly, quantity (of people).

The bigger quantity, the cheaper they can buy it from the source.

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#7

03-25-2005, 03:58 PM

Those aren't real lobsters, they are replicas made in India ;)
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#8

03-25-2005, 03:59 PM

low quality food that fills you up quicker
i also noticed the local sizzler puts a lot of salt in their food making me drink alot of water/soda and fill up even quicker

ive also noticed the same trend on the cheap carnival cruises i took

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#9

03-25-2005, 03:59 PM

Originally posted by Antonio

Those aren't real lobsters, they are replicas made in India ;)

Outsources lobsters, that's a new
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#10

03-25-2005, 04:01 PM

Soft drinks, the draft kind not canned.

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#11

03-25-2005, 04:03 PM

keg o beer = 15 gallons

15 gallons = 1920 ounces

1920 / 12 oz glass = 160 glasses of beer

160 / $30 keg cost = 18 cents per beer your cost.

Sell for $3 * 160 = $480 revenue - minus $30 cost.

You clear $450 per keg
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#12

03-25-2005, 04:04 PM

Originally posted by bringer

low quality food that fills you up quicker
i also noticed the local sizzler puts a lot of salt in their food making me drink alot of water/soda and fill up even quicker

ive also noticed the same trend on a cheap carnival cruise i took

Yep. Chinese buffets also put a lot of cornstarch on the food to make diners feel "fuller" quicker.

Another key factor in buffets' profitability--the $9.95 to $19.95 they charge factors in profit in light of the fact that 1) they stack the menu with many filler dishes (salads, fruit, low end meat/veg dishes) 2) most people do only 4 or less trips. If these trips to the buffet line are spaced out between higher priced and lower priced dishes (weighted towards the lower priced ones of course), the likelihood of the whole dinner exceeding the restaurant's break even point is reduced. IMHO

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#13

03-25-2005, 04:06 PM

It's actually rather easy to make money in the "buffet-style" restaurant biz. Especially if you specialize in it like Golden Coral, Ryans, etc.

Here is the breakdown:

1. The majority of food is low cost/high feedability (mash potatoes, mac -n- cheese, gravies, rice). These items can be purchased in bulk for near nothing. A 50lb bag of rice cost less than $30. You can feed about 200 people on a 50lb bag of rice.

2. You deal in volume customers. Example: you have a party of 10 come in to eat. 2 people go to town and eat up a lot of food. the other 8 only eat a plate or two. But they all pay $10 each. For that $100 dollars you only really give away $45 worth of food.

This allows you to have "t-bone steak night" once a week and "lobster night" once a month. This a very basic example, I could go further indepth............

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#14

03-25-2005, 04:07 PM

Hello. Many restaurants are LCN laundromats also. If you get what I mean. Its not just dishes they're washing in the kitchen.

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#15

03-25-2005, 04:09 PM

Other factors that can be counted in are:

#Low food costs, so they can still make a profit on each customer.
#Low staff or Lower staff wages.
#If it's a hotel they can re-coup costs in other areas ie: gaming, casion etc etc.
#things that were cooked ready but not loaded up for cunsumption.
#High priced drinks, at bulk low price purchase from a buisness pov.

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#16

03-25-2005, 04:09 PM

Originally posted by Fred Quimby

keg o beer = 15 gallons

15 gallons = 1920 ounces

1920 / 12 oz glass = 160 glasses of beer

160 / $30 keg cost = 18 cents per beer your cost.

Sell for $3 * 160 = $480 revenue - minus $30 cost.

You clear $450 per keg

YES!!!!!

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#17

03-25-2005, 04:15 PM

Originally posted by Fred Quimby

keg o beer = 15 gallons

15 gallons = 1920 ounces

1920 / 12 oz glass = 160 glasses of beer

160 / $30 keg cost = 18 cents per beer your cost.

Sell for $3 * 160 = $480 revenue - minus $30 cost.

You clear $450 per keg

Wow, that's some great data! I guess the bar business can be quite lucrative if you have a steady flow of patrons. Interesting.
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#18

03-25-2005, 04:16 PM

Originally posted by Boogie3

It's actually rather easy to make money in the "buffet-style" restaurant biz. Especially if you specialize in it like Golden Coral, Ryans, etc.

Here is the breakdown:

1. The majority of food is low cost/high feedability (mash potatoes, mac -n- cheese, gravies, rice). These items can be purchased in bulk for near nothing. A 50lb bag of rice cost less than $30. You can feed about 200 people on a 50lb bag of rice.

2. You deal in volume customers. Example: you have a party of 10 come in to eat. 2 people go to town and eat up a lot of food. the other 8 only eat a plate or two. But they all pay $10 each. For that $100 dollars you only really give away $45 worth of food.

This allows you to have "t-bone steak night" once a week and "lobster night" once a month. This a very basic example, I could go further indepth............

I knew that there had to be some mathematical equation they used. Those things are popping up like weeds and seem to be prospering. I always knew how rent-to-own places made a bundle (did a research study on them my Sr. year) but buffets always had me stumped.
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#19

03-25-2005, 04:19 PM

Originally posted by Fred Quimby

keg o beer = 15 gallons

15 gallons = 1920 ounces

1920 / 12 oz glass = 160 glasses of beer

160 / $30 keg cost = 18 cents per beer your cost.

Sell for $3 * 160 = $480 revenue - minus $30 cost.

You clear $450 per keg

what kind of kegs are you buying for $30? thats below cost for the distribution companys

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#20

03-25-2005, 04:20 PM

And remember they really cater to families with kids. The kids hardly eat much and are most intererested in the ice cream and desserts which already have a a HUGE mark up in price.

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#21

03-25-2005, 04:20 PM

Well first of all a Coke is probally $1.19 or more for 5¢ worth of coke. Waitresses are only paid $2.13 an hour, busboys/dishwashers $5.15. Also they hope some of these people come back when ther isn't a buffet. And also some people still order off the menu.
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#22

03-25-2005, 04:21 PM

For every fat guy that can eat more than $20's worth there are 100 people that only eat $5 worth

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#23

03-25-2005, 04:31 PM

Just a marketing tool to get new customers when they serve breakfast and lunch at regular menu prices.

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#24

03-25-2005, 04:50 PM

I heard about a husband and wife who got kicked out of a buffet last year for going for too many servings of roast beef. They were on the Atkins diet and each had 12 servings of roast beef before they were asked to leave lol. They consumed about 6 lbs of roast beef each

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#25

03-25-2005, 04:52 PM

Originally posted by HighOnAcid

Now if you break it down, they should lose thier asses off if someone of average size came in to eat and got filled up. An average sized person (5'10" 175) can consume at least 2 lobsters (roughly 1lb a piece) a pound of crab, and some other smaller items like shrimp and clams.

Fuck man, I cant eat that much at all, I'm only 145lbs but very active.. I guess I could eat that over a while, but I dont eat big meals I eat lots of mid/small ones.

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#26

03-25-2005, 04:52 PM

Originally posted by KRL

Hello. Many restaurants are LCN laundromats also. If you get what I mean. Its not just dishes they're washing in the kitchen.

I know of many wealthy people that open restaurants just to claim a loss on their taxes.

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#27

03-25-2005, 04:56 PM

buffets make money by offering a higher ratio of cheap hi carb foods.

hi carb = cheap
low carb = expensive
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#28

03-25-2005, 05:05 PM

Originally posted by Furious_Female

I know of many wealthy people that open restaurants just to claim a loss on their taxes.

Hmmm very interesting. Both parties win

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03-25-2005, 05:17 PM

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03-25-2005, 07:09 PM

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#31

03-25-2005, 08:45 PM

Some peoples math in this is way off. My fiance's best friend works at The Home Town Buffet (national chain). So I am pretty sure you all know what they basicly serve.
Reality is the cold case (aka Salad bar) is the most expensive part of the buffet. Then they will have the "main courses", which are that nights theme like seafood sundays or BBQ tuesdays and so on. Along with your stanbys which are roast beef or briscut, ham, several chicken types, soups and such.
Then they have their various desserts and the like. Plus free drinks (soda to milk).
They also have to keep refilling the hot and cold cases with fresh food constantly, even if they are no longer letting people in. Until there are less than a few tables with people, then they can start shutting it down.
Now the target audience of course is seniors and families. Children and seniors also pay less than the 10.00 entry fee. Here is the kicker, they keep the cost per person under 1.30 cents (for dinner) and generaly if it goes over 1.00 the manager gets very pissy. Get that under 1.30 per person! and on a general the dinner crowd is 500-1200 people per night.

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#32

03-25-2005, 08:50 PM

Originally posted by Fred Quimby

keg o beer = 15 gallons

15 gallons = 1920 ounces

1920 / 12 oz glass = 160 glasses of beer

160 / $30 keg cost = 18 cents per beer your cost.

Sell for $3 * 160 = $480 revenue - minus $30 cost.

You clear $450 per keg

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#33

03-25-2005, 08:50 PM

Originally posted by Lord of the fungi

Some peoples math in this is way off. My fiance's best friend works at The Home Town Buffet (national chain). So I am pretty sure you all know what they basicly serve.
Reality is the cold case (aka Salad bar) is the most expensive part of the buffet. Then they will have the "main courses", which are that nights theme like seafood sundays or BBQ tuesdays and so on. Along with your stanbys which are roast beef or briscut, ham, several chicken types, soups and such.
Then they have their various desserts and the like. Plus free drinks (soda to milk).
They also have to keep refilling the hot and cold cases with fresh food constantly, even if they are no longer letting people in. Until there are less than a few tables with people, then they can start shutting it down.
Now the target audience of course is seniors and families. Children and seniors also pay less than the 10.00 entry fee. Here is the kicker, they keep the cost per person under 1.30 cents (for dinner) and generaly if it goes over 1.00 the manager gets very pissy. Get that under 1.30 per person! and on a general the dinner crowd is 500-1200 people per night.

When SleazyDream is near the buffet, the cost go up to 18,15$ per person
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#34

03-25-2005, 09:03 PM

Originally posted by Crypt

When SleazyDream is near the buffet, the cost go up to 18,15$ per person

Almost clever. To bad Sleazy is just one person. For every eater who can somehow set them back 18.15 there will be 10 more that eat .40 cents worth.

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#35

03-25-2005, 09:13 PM

Originally posted by Lord of the fungi

Some peoples math in this is way off. My fiance's best friend works at The Home Town Buffet (national chain). So I am pretty sure you all know what they basicly serve.
Reality is the cold case (aka Salad bar) is the most expensive part of the buffet. Then they will have the "main courses", which are that nights theme like seafood sundays or BBQ tuesdays and so on. Along with your stanbys which are roast beef or briscut, ham, several chicken types, soups and such.
Then they have their various desserts and the like. Plus free drinks (soda to milk).
They also have to keep refilling the hot and cold cases with fresh food constantly, even if they are no longer letting people in. Until there are less than a few tables with people, then they can start shutting it down.
Now the target audience of course is seniors and families. Children and seniors also pay less than the 10.00 entry fee. Here is the kicker, they keep the cost per person under 1.30 cents (for dinner) and generaly if it goes over 1.00 the manager gets very pissy. Get that under 1.30 per person! and on a general the dinner crowd is 500-1200 people per night.

I worked in restaurants while in college and I know about food cost and the sort. This is why I find the $1.30 per person a bit unbelievable. That number just seems way, way off. I could understand $10 per person average but $1.30? I just can't believe it.
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#36

03-25-2005, 09:16 PM

Originally posted by HighOnAcid

I worked in restaurants while in college and I know about food cost and the sort. This is why I find the $1.30 per person a bit unbelievable. That number just seems way, way off. I could understand $10 per person average but $1.30? I just can't believe it.

I am using home town buffet which is a national chain as my point of refference. They do not do the whole crab legs and lobster rutine.

When price to get in is 9.99 per adult (not seniors), ya really think it would be 10.00 per person? Trust me this chick has worked there for 7 years now.

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#37

03-25-2005, 09:19 PM

Originally posted by HighOnAcid

I have a business degree and it still baffles me on how some buffet-style restaurants can make money.

HOW DO THEY DO IT?!?!? Anyone ever run a buffet before and can give me some numbers to play around with? I'm completely baffled.

so you have a business degree huh?

and your asking this question here?.

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#38

03-25-2005, 09:21 PM

Originally posted by jonesy

so you have a business degree huh?

and your asking this question here?.

Yep. Is that a problem? I may be educated in some things but I'm far from being educated in everything. Some of the replies have been very educational to me. I love input and other people's opinions.

How about you? Has this thread helped out any on your goal in acheiving your G.E.D?

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#39

03-25-2005, 09:23 PM

buy food in bulk.......
serve hudge crowds......
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#40

03-25-2005, 09:26 PM

Originally posted by fl_prn_str

buy food in bulk.......
serve hudge crowds......

Great business plan.... i'm going to do that

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#41

03-25-2005, 09:44 PM

Most of your national chains run a 25% food cost. This means that for every $10.00 they charge they have a $2.50 budget. So for nights when they do seafood it is likely to cost more than $2.50/person but other nights such as BBQ night they run a lower cost. As for the cold items (salads, etc.) being the most expensive that is just not true. A case of shitty lettuce is like $9.00 and feeds a bunch of people. On the salad bar the most expensive items will be the tomatoes and the salad dressings.

You may also notice on nights like lobster night that a lot of the lobsters have 1 claw. LOL. It is true I swear. These are lobsters that either when caught or while they are at the purveyor lost a claw and are sold at a lower price. If you are paying $3.00 for a dozen clams you need a new vendor. A 10# bag is typically under 10 bucks. As for shrimp they typically serve them in the shell and people get real sick of peeling them quite quickly so they save there too. Basically they just balance everything out. For every expensive item there is a dirt cheap item.

As for filling up on sodas. Ding, ding! You got that right. The wait staff is in trouble if you have a glass less than half full. Experienced waiters will have you a new glass before you are even half way finished. Dessert is always jello, ice cream and such. Very cheap.

Now, if you ever find a $9.99 all you can eat Jumbo Stone Crab buffet drop me a line. Those I can eat all day. Just make sure they crack those claws for me and no frozen shit!
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#42

03-25-2005, 09:54 PM

I guess it all depends on the audience you cater to...

In Vegas there are things like 1.95 steak & eggs & a shitload of buffets.... a lot of the buffets in Vegas are awesome (taste & price) for a reason, they bring your ass right back into their casino

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#43

03-25-2005, 09:57 PM

buy in bulk
serve in volume (have you ever seen an empty buffet spot)= $$$$$

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#44

03-25-2005, 10:05 PM

Originally posted by Fred Quimby

keg o beer = 15 gallons

15 gallons = 1920 ounces

1920 / 12 oz glass = 160 glasses of beer

160 / $30 keg cost = 18 cents per beer your cost.

Sell for $3 * 160 = $480 revenue - minus $30 cost.

You clear $450 per keg

$30 a keg?

Ya if you make it 50% water.
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#45

03-25-2005, 11:16 PM

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#46

03-25-2005, 11:38 PM

Originally posted by HighOnAcid

I have a business degree and it still baffles me on how some buffet-style restaurants can make money.

For Example:
There is this buffet-style restaurant in town that offers all-you-can-eat seafood for $19.95. They offer lobster, snow and Alaskan king crab, shrimp, clams, oysters, fish, mussells, and other smaller seafood items like stuffed crab and hush puppies.

Now if you break it down, they should lose thier asses off if someone of average size came in to eat and got filled up. An average sized person (5'10" 175) can consume at least 2 lobsters (roughly 1lb a piece) a pound of crab, and some other smaller items like shrimp and clams.

The restaurant is obviously not spending as much on seafood as retail but wholesale prices even do not justify them making a profit. Let's say the lobster is going for $5 a lb, the crab legs $4 a lb, shrimp $4 a lb, clams about $3 a doz. That means just the average person will eat $21 of food.

That is just the price of the food. This doesn't include overhead like employees, rent, electricity, water, waste disposal, etc.

HOW DO THEY DO IT?!?!? Anyone ever run a buffet before and can give me some numbers to play around with? I'm completely baffled.

You honestly think the average person is eating 4 lbs of food when they go to a buffet? That's world champion eating contest category eating and you are saying that's the average person?

Plus, if you ever notice on a buffet, they fill it up with a lot of cheap "filler" food like chicken, hush puppies, potatoes, etc. Smart people just eat the good shit but most women like to try a little of everything and get filled quickly.

Buffets make tons of money.....off just about everyone who walks through the door.

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#47

03-26-2005, 12:35 AM

Originally posted by bringer

low quality food that fills you up quicker
i also noticed the local sizzler puts a lot of salt in their food making me drink alot of water/soda and fill up even quicker

ive also noticed the same trend on the cheap carnival cruises i took

I'd think that's certainly part of it.
And buffets - so I hear - are popular with old-timers who are cheap, but eat less.
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#48

03-26-2005, 12:47 AM

Originally posted by HighOnAcid

I have a business degree and it still baffles me on how some buffet-style restaurants can make money.

HOW DO THEY DO IT?!?!? Anyone ever run a buffet before and can give me some numbers to play around with? I'm completely baffled.

Amount restaurant pays for food = x
Restaurant misc expenses = y

They sell their food for x*n, where n > 1, and x*n > x + y.

Simple.

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Drake

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#49

03-26-2005, 12:50 AM

Originally posted by KRL

Hello. Many restaurants are LCN laundromats also. If you get what I mean. Its not just dishes they're washing in the kitchen.

haha quite true. A lot of businesses are merely fronts for the real business going on behind closed doors.
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jonesy

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#50

03-26-2005, 03:40 PM

Originally posted by HighOnAcid

Yep. Is that a problem? I may be educated in some things but I'm far from being educated in everything. Some of the replies have been very educational to me. I love input and other people's opinions.

How about you? Has this thread helped out any on your goal in acheiving your G.E.D?

no problem here fucko - i wasnt questioning your intellect, just your choice of forum to ask a non relevent question.

some people have common sense and some have none at all - your comments lead me to believe you hold neither.

you'll find the REAL answers your looking for at a resturaunt message board not at an adult webmaster one. that was the point you misguided arrogant tool.

but i forgot you "love input and other people's opinions" thats cool.
even if they have no fucking idea, experience or relevancy on how a buffet resturaunt is operated.

i got an idea - ask how much an ATM scene pays at the food network message board.

.
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