Chicago Restaurant Info

Accounting - Percentages

Check some industry standards, and do some calculating on your own to see if you fall within the range, where you need to lower your costs etc.  This is where inventory control and menu items hold hands. You may have to eliminate non cost effective items.

ts = Total Sales            be = Break Even x = multiply              / = divide by adv = advertising etc (newspapers, phone books, printing..) oper exp = operating expenses, i.e. legal, accountants, licenses, rentals interest = bank charges, bad debt, credit card % charges depric = depreciation on equipment/furnishing f & b = food and beverage mo = month

IMPORTANT to return, click one of the below Accounting/Main Page/Site Index Accounting/ Costs Accounting Inventory & Purveyor Accounting Daily Sales Accounting/ Personal Finance Page ONE Accounting/ Personal Finance Page TWO or use your browser's "back" button

To Get Your Food Cost: TS X % (you would like it to be)=Food Cost (and so on for other costs)

TS for the month X % (use a standard %) =???  Compare answer to what your REAL cost is VS what it should be

To Get % of a certain cost based on Total Sale:  Cost divided by TS = %

F & B Cost divided by % (of F & B % above) = what TS should be or is. i.e.  $11,900.00 (f & b cost) / 34% (Total % for f & b) = $35,000; profit = 0; thus $35,000 is your break even. i.e. $11,900 / 45% (if your f & b costs are that %) = $24,444.44; loss is $8,555.56 because TS $24,444.44 - TC $35,000 = ($8,555.56)loss TS - TC = P or L total sales minus total costs equals profit or loss.  You can apply this formula with other items that you want to reduce.

TProfit or TLoss + TCost = TS

How many people must I get?? TS (or breakeven) divided by 30 days = $ per day divided by average check = # of people per day. So, if the above chart is an example of a 3,200 sq ft restaurant w/80 seats, and the average check is $11.00 (based on the AVERAGE median price of your menu) then: $35,000 / 30 = $1,166.67 / $11.00 = 106 people per day (spending $11.00 each before taxes) Of course you can raise your prices on the menu to increase sales & profits,IF based on market demographics it reflects that it is possible, however, usually with that comes an increased rent due to great location/marketablity. Check with Chamber of Commerce to get your demographics!!

How much should my rent be?? FIRST, do all your calculations to figure out your break even (as close as possible) based on standard %'s and what your average check will be for your menu.  Follow all the steps above.  Thus, if based on the above graph it is a restaurant of 3200 sq ft:  TS-BE / 3200sq ft = cost per square foot Standard of 6% for rent then: $35,000 X 6% = $2,100 per month $35,000 / 3200 sq ft =  $10.94 per sq foot per month for that break even $amount.  (that is what the sq ft is costing you for that month) But in reality, $2,100 / 3200 sq ft = 66 cents ea. if you were just to rent it and do no business at all- have no other costs. However, depending on the location it may be more.  REMEMBER to use the standard of 6% for rent, or around there SO YOU CAN FIGURE out what your other costs HAVE to be in order to break even.  Single Net = Straight Rent  Double Net = Rent & Insurance  Triple Net = Rent, Insurance and TAXES.

What is my average per menu selection food cost?? If you f & b mark up is 51% then: $11,900 X 51% = $6,069 $11,900 + $6,069 = $17,969 / 30 days = $598.97 per day / 106 people = $5.65 ea to show a profit of: $6,069 BE $35,000 + $6,069 = TS$41,069 (see above)  which means your f & b COSTS should be right around 29% some items will cost more to make, some less. with no mark up & @ straight cost: $11,900 / 30 days = $396.67 ea. day / 106 people = $3.08 cost per person