Some useful tips to calculate revenue the restaurant business

The restaurant industry is growing at an exponential pace with the concept of modern kitchens & multi-outlet quick-service restaurants opening in a metro city. We’re being introduced to mainstream Pan-Asian cuisine, quirky concept cafes & exquisite new sorts of desserts. All of this indicates that the restaurant industry is booming with new players entering the market and disrupting the industry and at the same time customers willing to offer an opportunity to new offerings in the market. With the market growing, many try to get a piece of this growing industry with their restaurant venture and earn a profit. 


How is restaurant profit calculates for the final Profit & Loss statement?


Restaurant profit may be a function of revenue and price. Restaurant Profit = gross revenue – Total Cost. This easy equation may be a great deal for all business owners. Ultimately, all business decisions are taken so as to ensure the survival of the business, earn a huge profit, or aim for revenue growth or expansion. a profit & loss statement of your restaurant provides you with an actual picture for the phase of your restaurant and helps you. reference to taking a P&L statement of a restaurant. 


Profitability elements that count to check the profitability of restaurant business :


A restaurant business owner should have themselves aligned with important financial milestones in the business like having operating profits, reaching the break-even point, maximizing all revenue streams, and more. Here may be a quick look at all key elements that you must be thorough with while aiming for a profitable restaurant business in India. 


Revenue Components

Sources of business from which you generate good sales are known for revenue components. For a restaurant business, orders are pretty much the first and only source of revenue. However, the restaurant got more orders in various ways. restaurant franchise owner from dine-in orders, delivery takeaway orders, and online orders to generate maximum revenue. Key metrics to trace your revenue trends are daily/weekly/monthly orders, average basket size, and repeat rate.


Operating Profits

The sum of all revenue generated by a business minus all costs incurred during the time of operations is working profit/loss. A restaurant will generate revenue from dine-in customers, delivery orders, or event catering while the prices that it might incur within the process will include rent, staff salaries, cost of staple, utility bills, and marketing costs. Higher operating profits make sure the survival of the business in the long run. 


Break-even point

The point in business where the all-time total revenue is adequate to costs incurred since the inception of the business is referred to because of the break-even point. For a new business, this is able to be an important milestone as all revenue made up of this point onwards (minus the operating costs) is profit for the business owner. Basically, now in the business, the restaurant owner would have recovered the initial investment that might be required to commence the business. 


Cost of operations

Digging deep into the value of operations, your primary costs every month would be the value of raw material and inventory which might be your food costs. Ideal food costs vary from 20% to 35% of the asking price of the dish which makes it pivotal to stay track of your cost per dish or cost per serving. Eliminating all waste types of things can bring down your operational cost and make your operation more efficient. Operation costs also will include staff salaries, utility bills, marketing costs, and third-party commissions if the restaurant has partnered with an aggregator. 

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