Tag Archive for: restaurant

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Restaurant Math – Thin Odds

You spend your life waiting for a moment that just don’t come/Well, don’t waste your time waiting – Bruce Springsteen, Badlands

You know the feeling you get when you walk up to a roulette wheel in a casino, place a $100 on 00, it comes up, you win $3,500, and then you let it ride on 00, hit it again, and walk out with $122,500? No? Me either.

The reason I don’t is that while it’s possible to come up with that combination, the chance of that happening on a 38-pocket wheel is 1/38 * 1/38 = 1/1,444 = 0.00069, about 7 times in 10,000 tries.

But that is more than twice as likely as the probability of a restaurant result I recently witnessed.

As we left a brewery, it had four open tables; each sat eight, B. Four parties waited, C, held in place by their policy not to seat parties of four or fewer in tables for eight. But, the chance of filling them up according to their plan and the data, A, is 0.13^4 = 0.00028, less than half that of our roulette gambit.

Meanwhile, those people stayed hungry. They and the restaurant both suffered.

We are, all of us, always playing games of chance. It pays to know the odds. Anybody up for blackjack?

#business #success #management #probability #sales #restaurant

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Restaurant Math

“I was at this restaurant. The sign said ‘Breakfast Anytime.’ So I ordered French Toast in the Renaissance.”
Steven Wright

Forget about ordering off the menu; first, you have to get a seat. That’s not a given anymore.

It was never a slam dunk to get into our preferred local eatery. Once COVID-19 forced all patrons outside with social distancing, it was harder still. As we sat waiting for some seats for the third weekend in a row, we began to fidget. What to do? In an era where restrictions abound, sometimes it’s hard to see the options.

Happily, we knew the owner and every boss in the place. I pulled our most-beloved manager aside and asked her if she would be willing to rearrange the furniture and make more money. I explained to her that smaller parties were crowding out larger ones. Why not go from the arrangement you have (which was A) to one with several smaller tables (which became B), I asked? If you track the revenue changes, you’ll be pleasantly surprised.

As shown below, she did just that. Revenue went up by over 25%. Unlike A, Setup B recognizes they face a Demand Curve, with more parties of one or two people than groups of five or more.

#demand #demandanalysis #restaurant #restaurantmath #profits #revenue