Are You Relying Too Much on Your P&L

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If you're waiting until you get your P&L to know how your restaurant is performing it may be too late. While a monthly or 4- week P&L is extremely important, it should be used primarily as a tool to confirm what you already know.

Prime costs like food, beverage and payroll, which typically consume 60% to 65% of every sales dollar, should be tracked weekly. If you're waiting until the end of the month to find how you're doing in these areas and there's a problem, what can you do about it? Calculate these costs 52 times a year versus 12 and you've got a shot at nipping any problems quickly.

I know smart operators who have calculated their sales break-even point and tell me they have a good sense of how much net income they should be making at any sales level. If the P&L numbers are much different from their break-even model, they know either the numbers on the P&L are wrong or they have an operational problem.

The restaurant business is a numbers business. Are you getting the numbers you need when they could do you the most good?

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Why Prime Cost Is the Most Important Number (That Should Be) on Your P&L

Prime cost (food, beverage & labor) consumes in excess of 60% of sales in most restaurants. They are your largest and most volatile costs. Without good Prime Cost controls even high volume restaurants can have profitability problems. Learn what your Prime Cost should run and how to keep excess Prime Cost from choking your profit.

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This series of worksheets is a tool to efficiently capture sales, purchases, payroll and inventory information to generate one of the most valuable reports in any foodservice operation. Prime cost is composed of the 2 biggest and most volatile cost areas in any restaurant, food & beverage and labor cost. Having accurate, weekly feedback on prime cost is essential to keep management informed and focused on their biggest and most vulnerable cost control areas.

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Break-Even: It's Like Having Your Own Financial Crystal Ball

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