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Factors that affect your restaurant's profits - Part 1

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Factors that affect your restaurant's profits - Part 1

Many people open a restaurant thinking that if they have the most delicious food in town, an exceptional atmosphere and decoration, people will come to their doors. However, they ignore the basic principles of the restaurant business which can lead to failure in the first five years.


To help you manage your profit margin and keep your doors open, let's look at some factors to consider.


-Labor Costs

 Make sure they're clocking in when they're supposed to so they don't overspend on the payroll.


-Food waste

Take a look at the amount of food they are throwing away after every meal they serve. If it's too much, the portion sizes are too big.

 Also, you can reduce food waste by using as much of each item as possible. For example, use chicken bones and vegetable scraps to make a broth.


-Employee Theft

You may not want to think about it, but many restaurants have high rates of theft among their employees. The staff sees an easy meal and takes advantage of it.

Combat employee theft with a good food cost tracking system. Take frequent inventory and know exactly where your food is going.

Also, if you offer staff a meal before or after their shift, consider keeping it on a set menu. This keeps them from eating the items on your menu that are hard to prepare.


-Staff rotation

Most restaurant owners do not consider employee turnover when they think of profits, but you can take a portion away.

The restaurant industry is known for its high turnover rates, so the loss of staff is nothing new. Every time you have to hire and train a new employee, it costs you money, and time.

Some measures to improve your employee retention rates may be these:

  • A better salary and an increase in benefits.
  • Treat your employees well by acknowledging their hard work with a thank you.
  • Offer promotion opportunities.
  • Train your employees on an ongoing basis.
  • Invest in leadership training for your managers so they know how to lead.


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