Restaurant owners and managers wear many hats. Some even wear a chef hat. More commonly, though, they are responsible for accounting, inventory, marketing, menu design, online presence and many other aspects. All of these functions combine to make fun, challenging and, yes, stressful days. Fortunately, a few key tools can reduce stress and boost your restaurant’s bottom line. Here are a few of our favorites:
When you open a new restaurant, one of the most exciting duties is writing the new menu. As you decide what you’ll offer, you create your brand and establish your place in the local economy.
It’s not enough, though, to know what you want on the menu. You also have to consider how you’re going to price each item.
Price your various menu offerings too high, and you risk selling less of each dish. Price them too low, though, and you damage the profitability of your establishment. Eventually, this could drive you out of business.
So where’s the middle ground?
If you’ve ever been out to eat at a restaurant where you and your dining companions ordered the same dishes, you know just how different the same entrees can look.
While this may be mildly amusing as a diner, it sheds light on a serious problem many restaurant owners face. The problem is portion control, and the consequence is decreased restaurant profitability.
Fortunately, there are things you can do to get the issue under control and ensure it doesn’t hurt the future of your restaurant.
If you work in the restaurant world, you’re probably aware of this foundational truth: Profit margins are low, and even a small misstep can cause them to be nonexistent.
Luckily, there are a few tried-and-true ways to improve your restaurant’s profitability. Here’s your starter guide:
With consumer concerns regarding environmental sustainability continuing to grow, more and more restaurant owners are becoming environmentally conscious and searching for new ways their business can go green.
One of the main challenges faced by restaurateurs is aligning responsibility with their business’s bottom line. The good news is that there are a number of sustainable practices that can actually help restaurant owners save money — all while catering to a customer base that is becoming more demanding.
Regardless of if you are running a five-star, elegant dining restaurant, or a smaller, mom and pop style eatery, a profit and loss statement is a necessary tool. More than just having a P&L, you must know what it shows, how the statement works, and how you can use the information it contains to determine the strengths and weaknesses of your business.
The Restaurant’s Profit and Loss Statement Defined
The profit and loss statement used by restaurants is also referred to as a statement of operations, statement of earnings, and income statement. It’s like the P. Diddy of restaurant accounting forms. A P&L is a management tool used for reviewing the total expenses and revenue of your restaurant during a certain time period.
At its most basic level, your P&L is going to reflect costs that are being subtracted from sales. The result of this provides a rough estimate of your restaurant’s overall financial health. For example:
As a restaurant owner, you are undoubtedly familiar with the problem of food waste. Businesses are typically obligated to offer everything on the menu, whether or not it’s ordered twice daily or twice weekly.
Much waste also comes after the food has been ordered and offered to the customer. Not everyone cleans their plate, even if the service and culinary techniques are impeccable. Even if you’ve made a profit on that meal, the value of that food goes into the compost.
Thankfully, there are ways to curb commercial food waste in order to help your bottom line and prevent further harm to the environment. This not only increases stability in your restaurant budgets but promotes an overall philosophy of sustainability in food production.
If you’re like most restaurant owners, you’re not sure how much it costs to make any one dish in your commercial kitchen. That makes sense, given the unstable nature of restaurant commodities and the realities of invoice creep.
In the modern world, food costs are some of the most important factors in overall profitability, but most owners and managers aren’t sure how to get a grasp on them accordingly. After all, many recipes require a few dozen ingredients, and it’s hard to price those out accordingly. Add to this the stress of rushing to keep up with customer demand, and you’ve got a tough equation to solve.
Brendan’s Irish Pub is a popular and successful eatery with three locations in Newbury Park, Agoura Hills and Camarillo, California.
Prior to turning to Sourcery, an AP and AR solutions provider, manager Dan Margolis stated he felt as though he was “flying completely blind” when it came to making changes to inventory and stock purchases to keep costs down.
After implementing Sourcery solutions, Margolis was able to see significant savings across the board, leading to more revenue and profits for the restaurant.
The holidays are a slow time for some industries, as businesses close to give employees some time off and celebrate with their families. The restaurant business is not one of these industries.
There are many things restaurant owners and general managers can to do to make sure that the incredibly busy six-week period from Thanksgiving to New Years goes off without a hitch, leaving customers with happy holiday food memories.