How a Return to the Basics Doubled This Owner’s Revenue

About

Ben Yehuda’s Pizza serves authentic, New York-style pizza in the heart of a D.C. Suburb. With 4.4 Stars on Google from hundreds of reviewers, Ben Yehuda’s has been a beloved staple of the local community since the early 2000s. But in 2013, a brush with potential disaster jolted owner Josh Katz into action, prompting a hard look at the business and some simple, but hard, changes that ultimately doubled his revenue.

Challenge

A Wake Up Call to Inconsistency

Because sales had been good prior to 2012, Josh initially didn’t see any red flags. “I took over an overall okay operation. There were obviously big inconsistencies and things weren’t documented well,” he explains. “But we had good employees and good, if inconsistent, growth.”

In 2013 everything suddenly changed. Sales took a huge dive. “I was thinking oh no, what was I doing wrong?” he says, “but I hadn’t changed anything! So I started diving into the numbers, our operations, our menu, our customer service - everything got a look as I tried to figure out what was going wrong”.

Though Josh didn’t know it at the time, 2013 was a down market for a lot of other restaurants. But while others might have blamed market conditions in general, Josh used it as an opportunity to take his restaurant more seriously.

He noticed three big problems: portion control, cost tracking, and menu engineering. When he actually tested it, his cooks were putting on average 1 pound of cheese per pizza. Plus costs weren’t being tracked, so there was no clear profit data from which sales downturns could be broken down into clear causes. Finally, the menu was obviously bloated- but as all restaurants know, changing one's menu can feel like a huge risk.

“Mistaking what was actually a downturn in the entire market for something only I was doing wrong laid the foundations for the restaurants’ success. While other restaurants in the area stayed static we really improved things.”

Solution

Consistency and Systemization

Portion control was more than just making sure sizes were consistent. It was about making sure customer expectations were consistent. “If you look at Outback Steakhouse or McDonalds, they always have a line out the door,” he explains. “I thought, hmm, it can’t just be about making a better tasting pizza, there has to be something more to reaching customers and making existing ones keep coming back.”

For Josh, this “something more” wasn’t just about buying portion spoons, food scales, and training employees to diligently use them (although he did this too). He downsized the default pizza offering to use way less cheese, and left it to customers to choose the old, larger portion as a free upgrade. But since that choice took extra effort, 95% of customers just stuck with the new, smaller default size. This meant consistent savings.

Implementing cost tracking software was the second crucial step. He subscribed to an expensive costing and inventory system and started mapping out ingredient costs, enabling him to actually see which items on his menu were performing and which weren’t. “We had a bunch of salads on the menu and an entire salad station taking up a whole employee’s time,” he says. “But when I dove into the numbers, only 7% of sales were from a station taking up 30% of my kitchen staff. So I cut my menu down.” He started focusing closely on his core product- the pizza- and cutting out distracting items.

Costing software let him compensate for losses, too. He could instantly compensate for a $100 dollar dip in french fry sales on Monday by having his team push $100 in sales of a high-margin product on Tuesday. This ability to quickly react and compensate was only made possible by tracking the numbers. These numbers also provided a simple "how-to" to grow top-line. Knowing which product were high-margin and high-volume made the decision on what to market and discount and bundle together all the easier.

“It feels like we’re actually professional now, compared to how things were when I took over.”

Results

Double the revenue, consistent profits

With a renewed focus on consistency of how his pizza was made, and clear systemization of tracking food costs, Ben Yehuda’s was able to predictably double its revenue over a decade.

• $800k to $1.6M in consistent yearly profit
• $30k in yearly savings for a single line item via portion control, let alone the entire menu.
• Halved wait times for customers: from 45-60 minutes to just 20 minutes

For Josh, the shock of 2013 caused a renewed focus on the fundamentals. “It’s really about consistency - both of what customers get, and how things run in the kitchen,” he explains, “and the only way to know if you’re being consistent is to actually measure things out. Measure what your cooks are doing, measure what things cost, measure what’s selling. Its simple, but its hard.”

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