$700K to $1.8M in 1 Year: How This Restaurant Owner Turned Things Around

About

In July 2023, Matthew Nicodemus purchased Flaco's Mexican Restaurant, a family-oriented dining staple in Naples, Florida since 1996. Flaco’s offers authentic Mexican food- Enchiladas, Tacos, Burritos and Chimichangas, as well as various different steak offerings. They also feature a full-service bar, and offer vegetarian and vegan options. Ranked among the top 5 restaurants in Naples on TripAdvisor, Flaco’s consistently receives 4/5 stars by customers delighted by their high quality food and excellent service.

Challenge

A total lack of cost management.

It became obvious to Matt after acquiring Flaco’s that, though they maintained a good reputation up front, their back office was a mess. Because portions were overly generous, and ingredient costs from suppliers were not being tracked, it was impossible to know how much any given dish that left the kitchen actually cost to make. This meant every dish that went out was burning an unknown amount into profit margins.

“There were major issues with portion control,” he explains. “Guys on the line weren’t even using portion spoons. At the same time, no one was making sure our ingredient costs were competitive from suppliers, let alone taking the time to calculate the cost for an entire recipe”

The restaurant’s initial reported sales were $1.1 million annually, but that number actually turned out to be closer to $700,000. Matt faced the challenge of restructuring operations and practices not only on the kitchen floor, but also in the back office. Tracking COGS was absolutely essential, but this had to work with more accurate portion control on the part of his employees.

“We were essentially giving away profit on every plate. When I actually mapped it all out, I discovered portions were totally out of control and constantly changed, even for the same dish.”

Solution

Strategic changes in portion sizes, employee training, and cost tracking tools.

Matt set out to boost profitability by focusing on cost tracking efficiencies- without sacrificing the customer experience. “Keep in mind,” he explains “this was at the height of food costs in mid 2023, so looking to fix costs was even harder than usual.”

One of the first moves was to right-size portions. He made sure the kitchen actually used portion spoons, and that each dish’s ingredient costs didn’t blow past the target profit margin. He even bought slightly smaller plates to reduce food waste, and encourage his cooks to be more careful with portioning. “I started asking how my guys can manage the costs better,” he explains. “Can you cook better food in less time? Are you paying for prep work that an oven could do?”

Matt made sure to constantly monitor prices from various suppliers via his invoices to ensure the restaurant was sourcing ingredients at the best available rates. He set up simple recipe calculations using Google Sheets. He fostered a better culture of accountability and emphasized cost-saving practices, which empowered his employees to also be part of the turnaround strategy.

“We just started looking at costs regularly and trained the team to understand how even a small scoop extra can impact profitability. Communication about costs and portions were the game-changers.”

Results

Double the Revenue, half the food costs

With a strategic focus on cost control, Flaco’s saw impressive gains. COGS tracking and portion control became Matt’s go-to for driving up profitability. “We were spending 76 cents on every churro, which I managed to cut down to 7 cents” he says.

This caused outstanding results in less than 12 months:

• 42% overall decrease in food costs
• Overall revenue growth of 157%
• 174% growth in profitability on a nightly basis
• Significant food waste reduction

For Matt, it all boils down to communication and honesty. In his view, if you don’t know the facts of your food costs, or actually try to hit pre-set margins on every dish with portion control, nothing will change. “The goal is to make small changes consistently,” he says. “Map out your target margins. Then just ask your chef how much food they think they're putting on a plate, then measure it together. If you find out they're using 12 ounces instead of six, it’s an opportunity for education, not punishment.”

Conclusion

Matt’s turnaround at Flaco’s shows that there’s no silver bullet to profitability: it all boils down to simple tools that help you accurately do cost tracking, and good in-kitchen portion control to match the margins you want. Understanding your costs down to the last cent and communicating those goals to your team can help you achieve significant growth and profitability— without ever compromising the quality your customers love.

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