Evaluate restaurant cost

Evaluate All Restaurant Costs Involved

Restaurant costs are a significant part of running a restaurant and need to be evaluated and planned carefully. Below are the significant costs involved in starting a restaurant business:

Food Costs- Food cost is the cost of all the raw materials used in preparing a dish. Ideally, the food cost should be around 30-40% of your menu price.  You’re in the business of making food, but if your food costs are out of line you’ll end up losing money. Make sure you keep track of your inventory, prepare food well, avoid waste, and keep prices competitive.

Overhead Costs– Overhead costs are the other expenses that are not related to food or labor. These include:

1. Rent- The rent covers a significant part of your restaurant costs, and is profoundly affected by the location of the restaurant. However, the rent should never exceed 10% of your total revenues.
2. Interiors– You can decide on the interiors based on your restaurant concept and theme, and your budget.
3. Kitchen equipment- Purchasing the right quality equipment may seem like heavy on the pockets, but they always recover their costs in the long run. Know about the various types of essential equipment without which you cannot run a successful restaurant, here.
4. License- Restaurant licenses are an essential expense of your restaurant, and cannot be ignored. Based on your establishment type, the license fee varies. We have covered the topic of restaurant license in detail below.
5. POS- The new age, modern technology POS can smoothen your restaurant operations like never before. The price of POS depends on its features and functionalities, that should be chosen considering your restaurant needs. We have covered the topic of POS below in detail.
6. Marketing- You should ideally spend 1-2% of your revenues on marketing your restaurant. There should be a perfect balance between offline and online marketing. Word of mouth marketing, along with digital marketing can do wonders for your restaurant. You can’t depend on repeat customers, so you’ll need to keep your marketing efforts up to make sure your revenue stream doesn’t thin out. Establish a strong social media presence, try an ad in your local paper, participate in the local fair, or host a small non-profit get together at your restaurant to keep marketing your business.

A lot of restaurateurs have the urge to hire, hire, hire. While you will probably need to hire some staff to make your restaurant a success, don’t go overboard. Paying employees can be daunting, especially in the first few months when you’re not making a lot of money. It’s not always easy to figure out how many staff to hire the right amount of staff, Invest in training your employees To better manage your staff, make sure you have employee training materials ready. Create job descriptions, codes of conduct, and an employee handbook. Create a training guide so employees are well prepared for their respective positions. Document recipes for your cooks so every meal is made to perfection. In other words, give your employees all of the necessary tools to succeed,As the owner, you can’t have an ego. If your idea of owning a restaurant is walking around in a pretty dress and makeup and asking customers what they think of the food, you’ll be in for a surprise. You have to be willing to do every job. From chopping vegetables to seating customers, you’ll have to fill in from time to time.