For many restaurants the difference between success and failure can be a small as the lowest paid employee on the payroll or the price they charge for a soft drink. Before a person goes into the restaurant business they should take the time to have an ROI analysis done. This return on investment analysis will take into account the many factors that it takes to run a successful business from the moment of conception to the end of your first year and beyond. Your initial ROI analysis should be done before you either buy an existing restaurant or decide where to build your new restaurant. Location is one of the most important things that needs to be taken into consideration when you start out. If people cannot find your new restaurant, chances are you will not succeed. In the case of buying an existing restaurant analysis should be done to assess the past performance and the likelihood of future success under new management.
An ROI analysis should be done to take into consideration all aspects of the restaurant including the cost of payroll, employee benefits, inventory and daily operational expenses such as utilities and equipment repairs. This analysis should be done in such a way that it can give a five year outlook to work with, showing your estimated costs and profits in that time frame. Although every restaurant is different; the formulas that should be used to make them profitable are all the same, only the numbers that are used change. For instance an upscale restaurant may have a higher food cost to retail price ratio than a fast food restaurant. A regular ROI analysis can show you where you need to make adjustments to help make your operation more profitable, a slight increase in prices may mean the difference between success and failure. Staffing is probably the most expensive part of any business and a restaurant is no different.
Having a professional ROI analysis can help to ensure that your are making the best use of your staff. Perhaps tweaking the schedule a little will help to reduce the number of employees you need. It is possible that using three full time staff will be cheaper than 4 or 5 part time staff. Or perhaps you only need to have full staffing during certain hours and can reduce staffing in the off hours. All of these can help to raise your profits and reduce your costs. The professional financial consultant you hire to come into your restaurant and complete an ROI analysis should be someone who is knowledgeable in the restaurant business. He can then take a completely objective look at every aspect of your business from the staff to the way your cash flow is handled.
Every expense that your business incurs will be tallied against the money that you are taking in and suggestions can be made that will help to reduce your bottom line and keep your restaurant in business for years to come. With over 60 years experience in the restaurant business in both owning and running restaurants as well as completing an ROI analysis for other owners, Atlantic Restaurant Consultants can help you. Whether you are planning on opening a new restaurant or are struggling to find ways to keep your current one open they can provide you with the data you need to keep your restaurant in the black for years to come.