A well organized and understandable restaurant profit and loss statement can provide infinite value to a restaurant owner. The best format to use allows the owner to understand his prime costs, total variable costs and the required contribution number necessary to cover fixed costs and desired profit.
Controlling Food Costs in The Restaurant Industry
The top two costs associated with owning a restaurant is labor and food. Controlling these costs in effect is the bottom line in your business. So how do you control food costs? First identify the correct quantity and quality of food you serve. Next, look at the flow of food on a daily and weekly basis. Finally evaluate tools and techniques to reduce food volume and waste. By taking these steps, an owner of a restaurant can set and control the costs.
In the restaurant business, alcohol is the single best margin generator. If you are going to have a profit, this is where the money is made. As an owner, you need to understand the value of alcohol sales and the associated costs. This aspect of operations not only generates high contribution margins, it covers its share of costs and ultimately adds to the bottom line.