PJ Media

As one whose family has owned restaurants in the past (not anymore, thanks to government regulation), I can attest to the cost of the food being but a small part. Permit me to provide a short list of some of the other things that go into the cost of a meal:

* Wages for the cook(s)–already mentioned, I know, but I am including it for the sake of completeness.
* Wages for the servers.
* Wages for the busboys & dishwashers.
* Payroll taxes, benefits, unemployment insurance taxes, and similar “hidden” charges for employees.
* Electricity to keep the lights on.
* Electricity, gas, or other utilities to keep the restaurant warm or cool enough for comfort.
* Electricity or gas for the stoves to cook the food.
* Electricity to run the refrigerators and freezers (and we’re not talkin’ the size of fridge and freezer you have in your kitchen, these are known as “walk-ins” for a very simple reason… they’re large enough for a person to walk into).
* The cost of the equipment, including but not limited to the stoves and ovens, deep fryers (you did want fries with your steak, right?), refrigerators, freezers. And, of course, the cost of maintenance and upkeep on them.
* Oh, and you need someplace to sit, so there’s the cost of the tables, chairs, booths, and upkeep on same.
* Don’t forget plates, and glasses, and silverware… and the inevitable cost of replacing broken items, or the occasional item that “accidentally” finds its way into someone’s bag… yes, it still happens.
* Then there’s the cost of the building itself… either a monthly lease or rental payment, or the property taxes if the building is owned.
* Maintenance and upkeep on the building and parking lot. If the restaurant is located in a shopping center, this is typically part of the lease or rental payment.
* City and/or county business licensing fees.
* City, county, state, and federal business taxes (separate from payroll taxes listed above).
* Fees for the sewer and garbage pickup… commercial venues, especially restaurants, pay far higher fees for these than do residential properties, because of the far higher volume of waste that they generate.
* Miscellaneous equipment and supplies, including the cash register, menus, order tickets, restroom facilities, toilet paper, etc.
* Advertising, which can be everything from a nice well-lit sign outside to newspaper, direct mail, radio, and/or TV ads. Oh, and these days don’t forget a website, though that wasn’t as necessary when we owned our restaurants… because the web wasn’t around then.

Whew! As I indicated in the last item, it’s been quite a while since we got out of the business, so I’ve probably missed a few things.

And, remember, I didn’t mention the cost of the food anywhere in that list.

You’re very welcome for the lesson in applied economics, Don.