Stepping over dollars to save nickles
Do you manage your restaurant or run it?
Most Independent operators run their operations they don’t manage them. You simply cannot save your way to profit you must manage the major cost centers and understand which numbers to look at and how to react. The average non corporate restaurant runs approximately %4 profit while the franchise units runt an average of %15. Why you ask? These franchise units have basic numbers and formulas the abide by. Nothing fancy just simple every day numbers some historical data and a little forecasting is all. At the end of the day it all comes back to THE NUMBERS. How much is it costing you to produce every dollar that comes into your restaurant? That’s the key question. How much did you spend on food, labor and alcohol if you sell it, to produce every dollar? Once those variable costs are figured out your off to the races. Building Cost and Overhead play their part in how much you have left at the end of the month as well but there is very little you or your manager can do to impact those costs. The only major way to impact BC/OH is to increase sales. Once you increase sales you leverage those to cost center percentages. So in other words sales go up, those fixed cost percentages go down, it’s that easy. One thing to keep in mind with BC and OH is that if you feel closing for a day or for what you consider slow lunches that same logic applies. It’s great that you save on labor etc. but the fact you no longer have that $400 a day/11,400 p/m really impacts those fixed costs. Squeezing every minute out of that leased or mortgaged property is key. Get creative!