“What’s your break-even point?” is a question restaurant owners should answer instantly. However, the usual answer is “Well… hm… it depends on…” Very few people can answer immediately, which is very strange. So, that’s why we’ve decided to write this banal post 😉
The break-even point (BEP) of the restaurant is a vitally important characteristic, measured in money. It shows whether your monthly income is equal to the expenses (at the break-even point the profit is zero). The BEP may be negative if you spend more than earn or, vice versa, positive.
You cannot plan the budget for a month or for a year without this indicator. You cannot set the KPI for your manager and chef, create daily sales plan for waiters and so on. Already at the moment of creating the business plan the break-even point helps understand:
1. How much to earn in order to get zero;
2. What’s the level of your profit after which you’ll get the return of the investments;
3. What’s the payback period of the project;
4. Whether you should invest in this project;
5. The possible future mistakes, if the BEP will be changed with time;
And many other things.
If you treat this question responsibly, you can track the profitability of the restaurant on a daily basis. And even create the personal plan for every waiter, as the outcome depends on them.
As you understand, the BEP of the restaurant is a constant and live indicator. It is the tool you have to work with at least once a month.
Do you know your break-even point? If yes, write us in the DM (still, it’s a private information) and we’ll give reliable advice. Imagine, just several simple steps can help decrease the BEP by 3-5% 😉⠀
#RiveraPeople