A restaurant not only involves food service, but also a business that requires attention in all its areas, including structure, processes and capacity for growth. What do you think makes a hamburger global?
Once upon a time there was a beautiful restaurant called “La Cosecha”
La Cosecha” was a popular restaurant in the city thanks to its homemade food, exceptional service and warm atmosphere. However, management lost control of costs as ingredient, labor, and maintenance expenses increased without adjusting strategies to compensate. Prices were not adjusted and effective measures were not implemented to manage inventory and reduce waste. Additionally, inefficient scheduling led to higher labor costs due to unplanned overtime.
“La Cosecha” restaurant faced financial problems due to lack of cost control and outdated technology compared to other restaurants. The point of sale system was basic and inefficient, making it difficult to accurately track sales and expenses. In addition, they hired personnel without knowing the appropriate profile, they did not have clear processes and their inventory was manual. These issues affected the restaurant’s quality of service and reputation, resulting in negative reviews and the closure of the business after 12 years of operation. It is important for entrepreneurs to maintain sound financial management and adapt to changes to ensure the longevity and success of the business.
General Costs:
a. Rental and Utility Costs: Definition: Includes the rent of the restaurant premises and the costs of public services such as electricity, water and gas. Example: If the restaurant pays $3000 in rent and utilities per month and has monthly sales of $20,000, the cost of rent and utilities would be $3000 / $20000 = 15%.
b. Marketing and Advertising Costs: Definition: Includes spending on advertising, promotions and marketing to attract customers to the restaurant. Example: If the restaurant spends $500 on marketing and advertising per month and has monthly sales of $20,000, the marketing and advertising cost would be $500 / $20,000 = 2.5%.
c. Maintenance and Repair Costs: Definition: Includes the cost of maintaining and repairing kitchen equipment, furniture and other restaurant facilities. Example: If the restaurant spends $300 on maintenance and repairs per month and has monthly sales of $20,000, the cost of maintenance and repairs would be $300 / $20,000 = 1.5%.
You know that all costs are important; It is important to monitor and analyze these costs regularly to ensure they are in line with sales and make adjustments as necessary to maintain a healthy and profitable financial operation. It is advisable to know, according to your restaurant, the percentage for each cost that you should manage.
- The above is an example of %, which may vary depending on your business.
- For example, if you defined the cost of food to be 35% and it is above that percentage, it may be necessary to re-evaluate each cost, suppliers, inventories, product losses, preparation times, etc. (seek to reduce costs in all possible areas).
The ability to measure something enables its continuous monitoring and improvement.
Operating margins: Operating margins measure the profitability of a restaurant. Operating costs are directly related to margins, so it is important to control them to maximize business profitability. Some strategies to reduce costs include optimizing inventory, improving energy and water efficiency, training team, and establishing processes. A restaurant is a business and should be structured as such.
To maximize a restaurant’s profit, it is important to consider both cost reduction and revenue increase.
Regarding cost reduction, measures such as inventory optimization, back office technology can be implemented to correctly project, better monitor and control costs, and make informed decisions for your business.
On the other hand, to increase income, you must know the most profitable dishes. If you still don’t know it well, we will explain it in the following topics. Follow us at www.athoz.net / @athoz.io
However, it is important to remember that the key to maximizing profit is not indiscriminately cutting costs or raising prices unreasonably. The real strategy is to find the right balance between costs and revenues, and provide quality service that keeps customers coming back again and again.
Critical to a restaurant’s success is considering location-specific operating costs and taking steps to reduce them without compromising service and food quality. Discipline in finances and management tools free up time and allow you to easily see the situation of the restaurant. Follow @athoz.io social media and visit www.athoz.net for more information on the topic.
We end each post with gratitude towards the vibrant world of gastronomy. We deeply admire those who give life to each dish and build unforgettable experiences. At ATHOZ – Innovative Back-Office Technology for Restaurants, we work tirelessly to drive your success, because we understand, respect and love the passion behind every restaurant. Join us on this culinary journey, following us to discover how we can collaborate and enrich this delicious journey together. Let’s make gastronomic magic!
We are a technology company that offers innovative solutions for the gastronomic industry with easy-to-use back office tools, designed to simplify internal tasks, save time and automate processes, which is a direct saving of money.
If you need help with the above, please contact us.
Team ATHOZ /Galos Corp
