We know how much food costs, so where does all the money on the bill go?

WHEN non restaurant people look at the prices restaurants charge, they often think that the owners are raking it in. Well it must be the case, mustn’t it, when you’ve seen a bottle of similar wine down the supermarket for just a few quid and here it is being sold for £15?

And we all know that vegetarian food only costs a quarter of that in meat dishes, so why is the veggie dish only 30 per cent less than that chicken dinner? Obviously the owner’s hiding his Porsche round the back. If only...

The industry’s key indices are fairly fixed and not rocket science.

After 20 per cent has been taken off for VAT, 25 per cent for wages, 10 per cent for rent and rates and 25 per cent for the food and the drink and 10 to 20 per cent for other overheads such as electricity and gas, along with all the stuff that gets thrown away such as cleaning materials and toilet rolls, there’s not that much left.

If an independent restaurant can make five per cent profit, it’s doing pretty well. And most don’t manage it.

And it’s those “overheads”, not exclusive to just restaurants but most businesses, that can be the real problem because there are a lot of them: licences, maintenance, replacement stuff that’s been broken, cleaning, accountants and solicitors and a fairly significant one — insurance.

When you buy or rent a house, you insure it against it catching fire or subsiding or flooding or being struck by lightening. You also take out insurance to protect the value of the things you keep in it. You possibly take out insurance against the possibility of not being able to pay the mortgage through illness or redundancy. But in restaurants you also have to take out insurance against damaging the staff or, fairly importantly, your customers. These public and employee liability insurances add up to quite a bit but are essential because if you’re inviting staff to come and work for you, and customers to come in a pay your wages, there’s always the chance that someone could get hurt.

Not through any deliberate act or even carelessness. It’s just that, despite the best practices and intentions, things happen. So you have to be covered, otherwise the resulting claims could put your company out of business, your staff on the dole and you in the gutter.

But while these insurance premiums bite into what little profit there is in many businesses, they also can actually prohibit many community projects where much voluntary effort is expended for small amounts of ‘profit’. The latter can all but be wiped away by the cost of short-term public liability cover.

It’s not surprising that many community-minded people begin to question if their physical effort is really worth it when such a large proportion of the limited returns goes towards insurance.

However, the importance of these insurances was brought to mind only this last weekend when we decided to throw a summer garden party with the aim of raising a bit of money for charities supported by Darlington Rotary Club. It did cross our minds to wonder about insurance.

After all, there are holes in our lawn where the dog’s been burrowing to China. Not to mention the danger of confusing bowls containing chocolate-covered raisins with little presents left behind by wild rabbits. Some children aren’t that used to the countryside and their parents don’t want to be overly vigilant while enjoying a glass of Pimms. So we considered there was always the danger of broken ankles and rabbit-induced tummy bugs which, without insurance, we mitigated against with strategically placed notices telling people to be aware and careful.

None of which did the least bit of good when the party marquee decided to act like a kite, somersault over the fence and across the drive, briefly landing upside down (thankfully) on a rather nice open-topped vintage Mercedes.

It was only the presence of a couple of trees and the quick thinking of a dozen of our guests that prevented it becoming a mobile carport on its way up Teesdale.

Luckily the owner of the Mercedes was able to confirm there was no damage, thus saving me from selling the house. It’s definitely made me appreciate the importance of insurance.

But its cost is a contributory factor as to why we read more and more about such regular summer functions being abandoned.