The business of operating a restaurant can be exciting and prestigious, but it is still a business first and foremost. No matter how skilled you are at running a kitchen, success and failure still come down to the bottom line.

 

The two most basic components of profitability are revenue and expenses. In most industries, individual examples of each are easy to recognize and classify for accounting and profitability projection purposes, but restaurants have a number of wrinkles that have to be taken into account.

Understanding Restaurant Revenue, Expenses, and Profitability

One hurdle to analyzing restaurant profitability is the fact that profit margins can be calculated by item, by customer, by menu, or for each week or month. Additionally, different kinds of dishes and beverages can have wildly different markup percentages.

 

Adding in relatively intangible expenses like labor complicates these calculations further. At the end of the day, though, the combined revenue from each plate has to cover both fixed and variable expenses. 

 

Understanding a restaurant’s major cost and revenue contributors, and seeking out new opportunities to increase profitability, is an ongoing endeavor in the hospitality industry. Determining how to ensure this is done most effectively is the focus of this course.

What This Course Will Teach You:

This intensive five-hour course will delve into the mystery of restaurant profitability analysis, starting with headline items and moving on to more specific and practical exercises. Some knowledge of accounting and experience in the restaurant industry will be assumed on the part of students.

 

After completing the lectures and exercises, you will:

• Be able to segment and analyze base restaurant revenue.
• Use key performance metrics, competitor comparisons, and industry benchmarks to gain insight into pricing and operational concerns.
• Plan menus and promotions with an eye on revenue generation.
• Apply intelligent food and beverage cost controls.

 

It’s a well-known statistic that many restaurants fail during their first year in business. Succeeding in this industry requires a combination of multiple, indispensable elements as far as operations are concerned. Without understanding profitability, though, your chances are already reduced significantly