Question:
When does it makes sense to add lunch, if you're dinner-only, or breakfast, if you're already serving dinner and lunch? And should you start out with one and add in others, or is it better to start out serving all three?
– Dania Rajendra, Restaurant PR Consultant, Brooklyn, NY
Answer:
Given the high cost of restaurant real estate, it is a good idea to maximize revenue by adding additional dayparts to service if you think the market would support it.
There are three things to consider in determining whether to add another meal service:
- How does the meal service fit in to the overall restaurant concept?
- Is it financially feasible?
- Do you have the management needed to cover the longer day?
These are questions many restaurants struggle with. I was thinking of this challenge recently as I ate breakfast (a cheap egg sandwich and weak coffee) in a sprawling midtown Manhattan brasserie with four covers at other tables and an equal number of bored tired-looking servers who were clearly displeased with management’s decision to open for breakfast. In that case the breakfast menu did not mesh with the overall concept, the local market had trouble recognizing the restaurant as a viable breakfast option, the sales volume did not justify the expense of adding breakfast service, and the sales forecasting and its associated scheduling were way off.
If you determine that opening for an additional meal service makes sense in terms of the restaurant concept, it becomes a case of break-even analysis to determine whether it is feasible. Break-even is the point where costs are covered. (A break-even primer for restaurants can be found here). The difference between this and other break-even analyses is that in this case you are only considering the new daypart—for example, 6 to 11 AM if adding breakfast. That means your revenue and expense figures should only come from those hours—easy enough when you are forecasting sales and projecting labor costs. For fixed expenses like rent, you can calculate the expenses for those hours as a percentage of the total operating day.
If, after your analysis, you think the additional meal service fits with your concept and you anticipate getting enough business to exceed your break-even point, it may be worth trying out.