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I mean 22k? If 11 babies are born per year what is the mean number of births per day? What does per mean? Study Guides. Trending Questions. What is the fourth element of the periodic table of elements? Still have questions? Find more answers. Previously Viewed. Unanswered Questions. What is the function of resorcinol in the seliwanoff's test? To obtain an even better handle on your labor costs, break out your front of house FOH , back of house BOH , and even managerial salaries so that you can control those elements even more closely.
Your FOH manager can then compare the scheduled hours of FOH staff to the actual hours, with the goal to improve these numbers on a weekly basis. Likewise, the executive chef can do the same for the BOH staff to really create a well-oiled machine.
Your prime cost is the total sum of your labor costs and your cost of goods sold CoGS , including all food and liquor costs. Not bad! Your break-even point is your tipping point. This metric represents how much revenue your business needs to earn to cover your expenses. Food cost percentage is the difference between what it costs to produce an item and its price on the menu.
This way, each dish accounts for the cost of its ingredients and leaves an acceptable margin for other overhead costs and profit. Monitoring your food cost percentage on an ongoing basis allows you to catch rising supplier costs, issues with portioning, spoilage, and shrinkage before any changes affect prime costs and profits.
Your mobile POS should be able to further break this down for you by day and menu item, like in this example:. Knowing this important restaurant KPI helps you strategically price menu items. On your mobile POS, run a report that shows your total menu item sales and individual contribution margins so you can compare the top menu items and their actual contribution margin. The calculation strips away the effects of financing, accounting, and capital spending for better comparability between restaurants.
The metric is also used as a tool to:. Gross profit represents the money your restaurant makes after deducting the costs of goods sold. It can be shown as number or a percentage margin. With CoGS deducted, gross profit tells you how much capital you have left to pay rent, labor, and other overhead expenses. Inventory turnover ratio refers to the number of times your restaurant has sold out of its total inventory during a period of time. You need to keep tabs on how often you use your entire inventory to prevent overstocking or understocking your shelves.
Overstocking inventory can lead to waste — of food and money. Typically, most restaurants that have fresh ingredients aim to turn their inventory over less than seven days or between four and eight times per month. The calculation for menu item profitability tells you which items on your menu have soaring profits… and which ones are flopping.
Similar to food cost percentage, menu item profitability is another way to gauge the performance of a menu item. With that information, you can compare items and make moves to highlight highly profitable dishes on your menu or focus on upselling. Your net profit margin represents the money your restaurant makes after accounting for all operating costs, including CoGS, labor, rent, equipment, hardware, and utilities.
Being profitable opens up a world of possibility for growth, expansion, investors, and even selling your business for a pretty penny. Of course, profit margins vary by concept. Note: Gross Revenue — Operating Expenses is your net income. Not great, but not the worst. A profit is a profit is a profit. Your next move would be to find ways to increase that number — without sacrificing service or quality — through increasing sales hello, marketing!
This means it is open 11 hours, and say it can serve 50 customers every hour when it is busy, but it also would have slow hours. Using an estimate of 30 customers per hour, this means that ideally there would be customers per day. However, to use a conservative estimate, I used customers per day in my model. These restaurants also have catering available too, which varies per restaurant.
This revenue projection can be found with math similar to below:. These projections may be modest. If you are to purchase a franchise, it may have more success depending on the name and reputation of the restaurant. Going down the line, the casual dining restaurant is more upscale than a fast casual restaurant. Restaurants may include a wine or bar menu as well. Because it relies on customers eating within the restaurant, you have to consider additional factors in developing a revenue projection.
What type of people will are trying to attract? Will the restaurant be open for breakfast? What will the layout of the restaurant look like? How much seating is available? How long will the average customer be at the restaurant?
Here are some assumptions I made for my projections:. Keep in mind while this seems like more revenue compared to the previous two models, the costs of a casual restaurant may be higher than a fast food or fast casual restaurant as you need servers and have the task of keeping eating areas clean.
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