The work of restaurants is multifaceted in terms of calculating all financial indicators. It is necessary to take into account many factors that will change day by day, carry out complex actions to determine the profitability of the business.
It will help in assessing the situation break-even point for a restaurant.
Features of the indicator
Knowing the break-even point of a restaurant is important, because this level is decisive for the business. If it is passed downwards, then urgent measures are required, because otherwise the establishment will go bankrupt.
Having reached this indicator in the restaurant’s activities, you can calculate further profit, determine measures to increase it. This allows you to accurately calculate the distribution of cash flows, understand the needs of the business.
To calculate the break-even point, you must do the following:
- Determine the fixed costs, which may include payments for rent or loan repayments, payment of utilities, the cost of equipment if it is leased. Payments for taxes and insurance are also taken into account.
- Variable costs include wages, the cost of products and other materials that ensure the operation of the restaurant. This article includes expenses for advertising, marketing, maintenance of equipment and the premises themselves.
- Next, the average bill per visitor and the monthly number of clients are taken into account to determine the level of income.
- Based on the expense and income items, you can determine the break-even point.
Features of expenses and income when operating a restaurant
Fixed costs are mandatory, they are difficult to reduce, because many items are determined by regulations or the conditions of third-party organizations. It is necessary to make a complete list of such expenses, highlight those that the business owner can influence, determine the means and methods for reducing.
Variable costs can be regulated using rational methods, taking into account their importance, necessity at a particular point in time. It is necessary to analyze the restaurant menu, the cost of products, and identify suppliers on favorable terms. If the expense parameters increase, menu prices will need to be adjusted to avoid passing the break-even point downwards.
Work on tracking all information must be carried out constantly, it is recommended to calculate the break-even point with a certain regularity, choosing the optimal period.
