Restaurant Industry Standards

Restaurant industry standards are a hierarchy of financial and production standards.  Restaurant industry standards are reviewed and evaluated for the small business owner in this section of the website. Learn more about how small business restaurants make money.

Pizza Restaurant Audit Guide used by the Internal Revenue Service

Pizza Restaurant Audit Guide

In the mid 90’s, the Internal Revenue Service created an audit guide specifically for pizza establishments. Today, this guide along with the Retail Industry Guide, specifically Chapter 4 which covers the examination techniques for the food service industry is used to audit the typical family style pizza restaurant. If you own a pizza restaurant, this article is designed to prepare you for an audit.

Fixed and Variable Costs in a Restaurant

Fixed and Variable Costs in a Restaurant

Many restaurant owners and managers do not understand the difference between their fixed and variable costs. The problem with defining fixed and variable costs in a restaurant relate to their connection with sales. In addition, reasonable assumptions have to be made in order to delineate between fixed and variable costs in the food service industry. 

This article will explain the difference between fixed and variable costs in a restaurant, provide examples of both and educate the reader on proper analysis procedures to create baselines for improvement.  I am a big believer in the feedback loop method of business operations in order to maximize profit and reduce overall stress for the owners and management team. 

Alcohol Costs – Monitor Closely

Alcohol 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. 

How to Purchase Equipment for a Restaurant – Business Finesse

restaurant equipment

Purchasing equipment for a restaurant is a daunting task. There are three phases to successfully purchase restaurant equipment. The first is planning, see How to Purchase Equipment for a Restaurant – Planning Phase for more information about this phase. The second is research, go to How to Purchase Equipment for a Restaurant – Research Phase for an understanding of this phase. This article covers the third phase of purchasing equipment, using business finesse to negotiate the best deal.

How to Purchase Equipment for a Restaurant – Research Phase

Research Phase

This is really an extension of planning. If done properly, this will take a few weeks of work for a new restaurant. The key is to go through your list and look at the different models for the needed equipment that are out there. Yes, it is OK to look at the new models because you want to look at the features the newer models have that you will not see or come across as you look at the older models.

Controlling Labor Costs in a Restaurant

Labor Costs in a Restaurant

There are two costs that stand out in the restaurant industry. Food and labor comprise more than 45% of the typical expenses of the restaurant. No other expense comes close to these two costs. This article is dedicated to controlling the labor costs in your food service operation.

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