Restaurants, break-even

Restaurants, break-even

Restaurants, break-even

Reopen your dining rooms in an approved area of your restaurant. Follow all new health and safety rules. Now it’s time to focus on your bottom line. This requires not only increasing all sales but also reducing costs. Understanding how to reduce regulatory costs – food and work are two big things – helps you drive performance improvements that can increase your financial impact.

While these are not always convenient in the restaurant industry, you can use strategies to increase sales and improve your management costs. Use these ten tips to improve your profit margins in these uncertain times and ensure you reach a crossroads.


Reevaluate your supply costs

One reason for the increase in CoGS could be that your suppliers have increased the prices of your ingredients. If a particular element has gone up in price, you may want to seek a new supplier, try negotiating a lower contract price with your current supplier. If your supplier is unwilling to lower the price, then compare the cost with other suppliers. An improved, specific location-based inventory management system can identify price errors. While your relationship with suppliers is essential, you should also consider your profit scores.


Cost out your menu items and recipes

In achieving specific sales objectives, operating your restaurant also requires you to meet detailed cost specifications. The first step in cost-effective food production is to create a list of necessary items and pay the price for all the ingredients you buy. Using the master inventory lists, you can then calculate the cost of the entire recipe and menu item to compare the retail price of the menu item.


Compare actual versus theoretical food costs to optimize spending

Compare the actual price of food and supplement to spend money. Knowing the difference between spending money on food and what you should spend on food in a given time can help you use more efficient asset management. This is known as the gap or difference between your actual cost compared to theory. Any negative variance indicates a lost profit.


Promote your highest gross profit menu items

Top menu items can mean the average cost of a restaurant. For example, a more expensive entry with steak or fresh seafood has higher food costs but usually brings higher profits. Selling more pasta containers will lower your food costs but may result in lower yields. Surprisingly, most restaurant operators do not know the marks on each item on their menu. If you do not break everything in your menu with its ingredients to determine how much it costs to make money, then you are missing out on the opportunity to sell your most profitable menu items. Maybe that stack installation isn’t as high a line as you might think. On the other hand, that cheap pasta dish can be a top priority with the addition of shrimp or lobsters.


Review cost of goods sold daily

Coefficient Cost (CoGS) is the combined cost of food and beverages sold at your restaurant over some time. Daily reviews of your CoGS will let your restaurant managers know about issues such as garbage, theft, and segmentation errors so they can take immediate action.


Optimize labor by understanding sales forecasts by daypart

Many restaurants currently operate on reduced hours. For example, downsizing has declined due to increased work from home, which has led to a general decline in the breakfast industry. As a result, you will need to consider how the reduced hours will affect your forecast, not just daily but part of the day. Putting your projections on a reduced number of hours will help you make difficult decisions about how many employees you should have in the house each day.

Another way to save money is to use a daily report that exposes employee costs as a percentage of income and sales per hour (SPLH). This allows your store managers to make organizational changes based on this feedback to improve the rate of your employees. Collecting and analyzing your employee data will enable you to create effective employee cost management strategies by incorporating a staff share in customer demand. 


Forecast by revenue center

Monitor sales and service delivery from the beginning of the restaurant limits to unlock your business goals throughout the recovery. By analyzing this data, you can make wise decisions about the distribution of working hours for your business’s delivery and delivery components.


Use data-driven scheduling

Use your prediction data to create intelligent schedules. Advanced software configuration combined with sales data provided to your POS system lets you calculate your best sales and the number of customers served per hour of operation. Your hourly sales per hour (SPLH) is an essential indicator of productivity. With fast-paced restaurant technology, you can plan for employees while keeping your SPLH percentage goals in mind.


Continue promoting your takeout and delivery services.

If you have managed to stick to shipping and delivery only during the food restrictions, but now you see that the business is collapsing, now is the time to acknowledge your donations that you have not made. While your latest efforts may focus more on opening your dining room and serving those who eat it, it is essential to continue the revenue streams by highlighting those channels while your dining room is not over. Many diners are still not comfortable eating in restaurants.


Add digital gift cards to your gift card offerings

Digital gift cards are an excellent tool for consumers to share their restaurant food with family and friends on social media. It also introduces your restaurant to potential fresh customers.

In addition, digital gift cards are used more than just gifts in the current health-conscious climate. Many consumers purchase digital gift cards as a way to pay online without having to go online.


Improving your financial image in this uncertain time depends on a variety of factors. While increased sales are essential, limited power and other limitations require you to use design ideas such as menu engineering to increase check rate, raise profit margins, and focus on reducing costs. Improving asset and human resource management efficiency will help reduce overall operating costs and increase your priorities.


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