Keeping a restaurant profitable is one of the most challenging tasks in business today. That’s why it’s crucial to review your numbers and current practices. Restaurant accounting is more important than ever for your success.
Having helped restaurants navigate the pandemic and emerge stronger, we’ve learned some key lessons for restaurant owners to remember.
The top 7 accounting considerations for most restaurants:
Food Costs: Have you recently reviewed your food costs? Are they under 40%, ideally closer to 30%, of your revenue? Make sure you track these costs monthly. If food costs are rising, consider reassessing your suppliers or adjusting menu prices for high-cost dishes.
Menu Changes: Is your menu due for an update? Simplifying offerings, reducing food waste, and cutting costs can significantly impact your bottom line. Focusing on a few excellent products often leads to higher profits and helps your restaurant stand out in a competitive market.
Labor Costs: Are your labor costs 20% or less of your revenue? Watch out for overtime or overstaffing that can eat into your profits. Stay updated on local minimum wage laws, as increasing labor costs can quickly threaten your profitability.
Credit Card Processing Fees: When was the last time you reviewed your credit card processing fees? Consider finding ways to reduce these costs. Platforms like Toast can help analyze data and potentially lower credit card fees, though setup costs might be high. Learn more about Toast here: Toast.
Cash Flow: Do you struggle with cash flow? Seasonality can affect foot traffic and food offerings. Keeping your budget up-to-date and managing your finances effectively can provide significant opportunities for improvement. Good accounting and accurate projections help you make better business decisions.
Delivery Services: Are you working well with delivery companies? Not all foods ship or deliver well. Consider delivery as both a marketing expense and a service for customers who love your food. Reevaluate which items should be offered through delivery. Maintaining your reputation is crucial, so ensure that delivery offerings meet your quality standards.
Property Ownership: Do you own or lease your building? Your location is critical, but fixed costs are also important. Owning your location instead of renting can contribute to long-term stability and viability.
If it’s time to take a closer look at your restaurant’s financials, let’s connect. My goal is to help you view your business from a new perspective, enabling you to make informed decisions, innovate, and achieve greater enjoyment and profitability.
