If you’re like many casino gamblers hoping to win big, you subscribe to the notion that “you have to spend more to make more.” However, if you’re managing casino foodservice operations, you know that’s not always true. Keeping costs down is a huge factor in your success. And by tracking costs closely, you can figure out what levers to pull to maximize your profits.
Focus on these five metrics to streamline your costs and keep your restaurant winning streak going.
1) Break-even point
Your break-even point is the point at which your business revenue is equal to your restaurant’s operating costs and expenses. Knowing your break-even point is one of the most valuable insights you can have, as it tells you what number you need to exceed in sales to recoup necessary restaurant costs and remain profitable. While it’s important to know your break-even point, you should go beyond that. Figure out how much profit you’re striving to make after you hit your break-even point each month, and establish your sales goals from there.
2) Food cost
Since it directly impacts your restaurant’s profitability, your food cost is a critical metric to track. To calculate your food cost percentage, divide your total food costs by your total revenue. As a general rule, a profitable restaurant should aim to keep their food cost between 28%-35%. By monitoring your food costs, you can determine when you should adjust menu prices, products and purchase quantities.
3) Labor cost
Labor is one of the highest costs you’ll incur in the restaurant industry, so keeping close tabs on it is a must. Labor cost includes payroll, benefits and taxes. To effectively manage it, you should know benchmarks for reasonable labor cost standards. Restaurants typically aim to keep their labor costs between 20%-30%, but this varies based on the type of restaurant you’re running. If you’re running a high-end casino restaurant, chances are you’ll be toward the top of that range since your guests have higher expectations for service.
4) Prime cost
When you combine your food and labor costs, you get your prime cost. While it’s important to know the percentage breakdown of your prime costs (i.e., food versus labor), just knowing your overall prime cost is a useful way to manage your budget. If you’re mindful of your prime cost, you can react quickly and adjust it as needed to ensure you stay profitable. But bet smart — keep your restaurant’s prime cost at 60% or less than your sales and revenue.
5) Employee turnover rate
This is the percentage of employees that leave voluntarily or are let go and need to be replaced during a specific time period. In the fast-paced foodservice industry, employee turnover is expensive and can hurt your operational efficiency. At the same time, the employee turnover rate in foodservice is notoriously high, at a whopping 72.9%. And since it costs an average of $3500 to replace employees, it’s essential that you take extra measures to find the right people and retain them.
Streamline operations (and win big!) with the right equipment.
As you’re tracking these metrics, keep all options on the table when figuring out where and how to improve your profits. While streamlining food and labor costs is essential, it’s also important to evaluate how budget-friendly equipment can increase your margins. Ready to double down on savings? Here’s how smart foodservice equipment can help you reduce food waste and save on costs.
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