Where the money goes.
WHAT THE MAIN COSTS ARE
Food and beverage Labour Rent Power and water Everything else
WHAT TO TRACK AS PROPORTIONS OF REVENUE
Each of them.
WHY PROPORTIONS
Absolute figures grow with volume; proportions reveal control.
WHAT THE LARGEST CONTROLLABLE COSTS ARE
Food and labour.
WHAT THE COMBINED MEASURE IS
The two together, as a proportion of revenue.
WHY COMBINED
They trade against each other: preparation from scratch lowers food cost and raises labour.
WHAT TO ESTABLISH
A target for the combined figure, appropriate to your operation.
WHAT TO DO WHEN IT EXCEEDS TARGET
Establish which component moved, and why.
WHAT DRIVES LABOUR COST ABOVE TARGET
Staffing not matched to demand Overtime Overstaffing at quiet periods
WHAT TO DO
Build rotas from actual demand data.
WHAT DRIVES FOOD COST ABOVE TARGET
Portioning Wastage Theft Absorbed price increases
WHAT RENT SHOULD BE
A proportion of revenue that leaves room for everything else.
WHY IT MATTERS AT SIGNING
It is fixed for the term, and a bad rent cannot be managed away.
WHAT TO CALCULATE BEFORE SIGNING
Revenue required to support it.
WHAT TO REVIEW WEEKLY
Sales, food cost and labour cost.
WHY WEEKLY
Monthly review discovers problems too late.
