Restaurant Management

4 Areas Where Your Restaurant Can Go Green AND Save Money

 

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.

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Restaurant Accounting

What Makes Up a Restaurant’s Profit and Loss Statement

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:

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Restaurant Management

Are You Losing Money to Food Waste?

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.

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Food Cost Management, Restaurant Accounting

The Restaurant Portion Control Profit Triangle

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.

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Case Studies

How Brendan’s Irish Pub reduced bottom line costs by 40%

Brendan’s Irish Pub is a popular and successful eatery with three locations in Newbury Park, Agoura Hills and Camarillo, California.

Brendans Irish Pub Restaurant

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.

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Restaurant Management

Taking Advantage of the Holiday Rush

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.

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Restaurant Accounting

Where Does Your Profit Go? Understanding The Magic Nickel

Revenue from a restaurant is a great thing, but more important than a dollar of revenue is a few cents of profit. For many restaurateurs, a mere nickel in profit emerges from a dollar’s revenue after expenses and costs take their toll. How can this be, you wonder? You keep track of your expenses — don’t you? You know what you spend on food, beverages, and labor. What other profit goblins could there be?

Revenue

Let’s start with revenue. In a typical restaurant, the bulk of your revenue is from food and beverage sales. You may have other small sales, such as souvenirs, or surcharges for banquet room rentals and the like. No matter the source, you bring in a dollar of revenue, and then the costs start to nibble away.

So how do those costs typically breakdown?

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Restaurant Management

5 Ways to Turn Walk-Bys Into Walk-Ins

While the bulk of marketing may be moving towards social media and internet outlets, many restaurants still heavily rely on foot traffic. This is often especially true for restaurants in mostly pedestrian areas, or restaurants located near a cluster of other restaurants or within a shopping mall.

The objective here, of course, is to convince possible customers (who may simply be strolling by) to stop and eat at your restaurant as opposed to any number of other restaurants that may also be within walking distance. Sometimes, though, this is easier said than done. As with all marketing tactics, the goal is to convince diners that your restaurant is superior to others within your area.

Here’s how to do just that.

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Restaurant Accounting

How to Save Money in the Restaurant Business Without Raising Prices

Profit is the name of the game for many a restaurant, whether it is an independent business or part of a chain.

When profits are high, you’re happy.

On the other hand, when they plateau or decrease, you could be scrambling for solutions. Often, an immediate answer is to raise your prices. Before you do that, though, you should first explore a few other possibilities to save money.

Redefining Labor Costs

Labor costs vary from restaurant to restaurant and from source to source, but consulting firm BDO put them at 30.5 percent of sales in 2016, an increase of 0.8 percent. Ideally, labor costs should be no more than 28 percent to 30 percent of sales, although that percentage excludes employee benefits, which could constitute up to 6 percent of sales.

So how do you make labor costs work for you?

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Restaurant Accounting

How to Calculate & Manage Your Restaurant’s Prime Costs

As a restaurant owner or manager, it’s important that you keep your costs low and your profits high. That’s often easier said than done, however.

For restaurant accounting purposes, your prime cost is the magic number. When this number is high, you may be in trouble. When it’s low, however, your profits will soar. Here’s how to calculate and manage this important figure.

What are prime costs?

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