4 Creative Ways to Measure and Increase Restaurant Profits

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January 27, 2021

When we think about the success of a business, the first thought that usually comes to mind is profit.

Profit is the amount of financial gain when we subtract our expenses from our sales. That sounds simple enough, we just need to make more sales than we spend.

But wait! How are you going to accurately calculate the labor and cost of sales involved in the business? Especially in a business where you have flexible hourly rates or sales totals. Worry not! Here are a few tips to assist in keeping track of labor and cost of sales in your business.

1 - Use software.

Not just any software, but one that is specially designed for restaurant and hospitality sectors like Push. Having to do things in your head or with pen and paper is frustrating and takes up precious time. With Push, you can forget most of the manual work and put the focus back into your business rather than calculations.

With a click of a button, Push allows you to view reports that show you the exact percentage being spent on labor compared to your sales. Data is generated, sorted and filtered in different ways that are meaningful to you; such as by time period or by positions. Furthermore, Push can be integrated with your POS system to automatically grab and input sales numbers, so you don’t have to manually input it!

A comprehensive software like Push is highly recommended if you want to get rid of the headaches attached to labor cost calculations.

2- Track costs.

Get into the habit of recording the price of inventory items purchased. It's much easier down the road to make calculations when all the data is right there in front of you - when you need it!

Let’s say a bag of 15 potatoes costs $3; which comes out to 20 cents per potato; and you’ve made a record of this on a spreadsheet. You just came up with a new dish that makes use of two potatoes.

Since you’ve recorded prices of your inventory items, you can easily bring up your spreadsheet and see that you'll using about 40 cents per dish. This will assist in centralizing the data for subsequent price changes, so you can adjust accordingly.

3 - Think holistically.

Now that you know the ingredient costs involved in your new dish, costs that are associated may not immediately jump out. The cost of turning on the stove for an hour to heat up 20 potatoes is a bit different than turning it on for 1 potato.

Sometimes, it’s not just the price of the ingredients you put into a dish; there are other aspects you need to think about as well. The tips above are not meant to be comprehensive; but they should be thought of as a starting point to building a foundation for practices in keeping track of labor and cost of sales.

4 - Input your data correctly.

Using an integrated system will help you make the most of your system by pulling information from sales, labor and tracking. You can measure reports in real time and demystify how much you are making, spending and taking home.

In conclusion

It's so important to measure metrics when running a business, and every hour you have is valuable. When you choose an integrated all in one system that allows you to pull data from different parts of your business, and track inputs from different places, all you have to do is sit back and focus on the fun stuff.

increase profits

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December 2020


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