Is "nuantial" a word?

I was sitting at my desk yesterday, cookbooks at the ready, pen in hand, and David asked if I was doing homework. "No," I said, "I'm making a grocery list." "It's the same thing," he noted.

Chef Stazi began class today by completing the lecture he began on Friday, on factors affecting labor costs. We talked about types of compensation (direct, indirect, and deferred). He gave some examples of ways to proactively affect labor costs, like maintaining the proper staffing mix (full-time, part-time, seasonal, on-call), staggering start times, reallocating duties, and taking full advantage of the features of your POS (point of sale) system. Some of the more sophisticated systems will "block out" employees who try to punch in outside the parameters of their scheduled shift, so that you have to override them if you truly do want the employee to begin working. Chef is a firm believer in overtime as a last resort.

We talked about the absolute need for budgeting and forecasting. During break, in talking with Andy, I compared it to taking a long car trip without a map. "If you don't care where you're going, or when you'll get there, just get in the car and drive."

We were introduced to the three major financial documents, the P&L, the Balance Sheet, and the Budget, which Chef Stazi refers to as "our cast of characters." In his cogent, plain-spoken way, he attached them each to a time period: "the P&L is about the past, the Balance Sheet is the present, and the Budget is the future."

He spent some time elaborating on the philosophy of revolving debt, and the buy-versus-rent decision, issues which you approach differently as a business owner than you do as an individual. "In business, it's all about the time value of money, and keeping your assets liquid, and minimizing tax liability."

And we started a discussion about the concept of the contribution margin, the profit margin for each good or service that you sell. In culinary terms, this would be the menu price less the cost of the item. In Software, we were focusing on food cost percentage: the cost divided by the menu price. Today, Chef demonstrated how an item with a higher (i.e. "less desirable") food cost percentage could actually be more profitable than an item with a lower percentage. To wit:

Entrée: Menu Price: $35. Cost: $15. Contribution Margin: $20. Food cost %: 43%.
Dessert: Menu Price: $12. Cost: $2. Contribution Margin: $2. Food cost %: 17%.

So, while the dessert item (creme brulée, in our discussion) has a lower food cost %, you have to sell two of them to make the same profit that you do off one entrée (aged New York steak with asparagus and mushrooms, in our discussion). Though it's somewhat counterintuitive, there's no direct correlation between cost and profitability.

"What's a 401(k)?" Chef Stazi asked. Jordan said it was a government sponsored retirement plan. "A common mistake," Chef said. He called on me. "A tax-deferred savings plan," I answered. "I couldn't have said it any better!" the Chef replied.

Andy said, "That's why we keep her around."