{"id":16377,"date":"2023-03-22T09:16:29","date_gmt":"2023-03-22T13:16:29","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=16377"},"modified":"2026-01-28T04:49:32","modified_gmt":"2026-01-28T09:49:32","slug":"understanding-profit-margins-for-restaurants-2","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/understanding-profit-margins-for-restaurants-2\/","title":{"rendered":"Understanding profit margins for restaurants"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--has-illustration entry-header--has-illustration--generic\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tUnderstanding profit margins for restaurants\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2023-03-22T09:16:29-04:00\">March 22, 2023<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Understanding profit margins for restaurants\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/understanding-profit-margins-for-restaurants-2\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/kellydent\/\">\n\t\t\t\t<img decoding=\"async\" alt=\"\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2021\/04\/Kelly-Dent.jpg\" class=\"entry-author__image\" height=\"40\" width=\"40\" fetchpriority=\"high\" \/>\t\t\t\t<span class=\"entry-author__name\">Kelly Dent<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n<p>If you\u2019re serious about opening and running your own restaurant, you need to be thinking about revenue and profit margins early on in the game.&nbsp;<\/p>\n\n\n\n<p>Restaurant profit margins are relatively slim compared to other sectors. But there are ways for you to bolster your business and make sure it doesn\u2019t just survive but thrive.&nbsp;<\/p>\n\n\n\n<p>In this article, we\u2019ll help you to understand profit margins for restaurants, so you can apply the learnings to your business.&nbsp;<\/p>\n\n\n\n<p>Here\u2019s what we cover:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"#understandinng\">Understanding restaurant profit margins and how to stay profitable<\/a><\/strong> <\/li>\n\n\n\n<li><strong><a href=\"#average\">The average profit margin for restaurants<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#what\">What is the average net profit margin for restaurants in the US?<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#but\">But how much do restaurants actually make?<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"#how\">How to improve profit margins for restaurants: Minimize costs and increase revenue<\/a><\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"understanding\"><strong>Understanding restaurant profit margins and how to stay profitable<\/strong>&nbsp;<\/h2>\n\n\n\n<p>First thing\u2019s first: what are profit margins exactly?&nbsp;<\/p>\n\n\n\n<p>Simply put, this is the amount by which your revenue\u2014the money you\u2019ve made\u2014tops your overall costs as a business.&nbsp;<\/p>\n\n\n\n<p>Profit margins form an important part of your\u202frestaurant business plan, particularly when it comes to your menu and financial projections.&nbsp;<\/p>\n\n\n\n<p>This is because they give you insights into how much you need to charge per dish, how many covers you need to make per day, the size of your menu, and so on.&nbsp;<\/p>\n\n\n\n<p>There\u2019s no hard and fast rule about how high your margins need to be to make it in this industry.&nbsp;<\/p>\n\n\n\n<p>But as a successful restaurateur, you need to have these numbers at your fingertips to have a truly comprehensive view of your operations and make informed decisions.&nbsp;<\/p>\n\n\n\n<p>Read on to find out how to calculate your profit margins, and what steps you need to take to increase revenue and minimize costs for your restaurant.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"average\"><strong>The average profit margin for restaurants<\/strong>&nbsp;<\/h2>\n\n\n\n<p>The average profit margin for the restaurant industry is around\u202f2-6% globally, with data points that can range from 0 to 15%.\u00a0<\/p>\n\n\n\n<p>Translation: there\u2019s no 1-size-fits-all answer, primarily because revenue and expenses can vary so significantly between countries and, for example, fast food restaurants and Michelin-star venues.&nbsp;<\/p>\n\n\n\n<p>It also depends on the day-to-day running costs, rent, utilities and so on in your area, and how well you manage your finances as a business owner.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what\"><strong>What is the average net profit margin for restaurants in the US?<\/strong>&nbsp;<\/h2>\n\n\n\n<p>Restaurant expenses range from rent and utilities to payroll, maintenance, marketing, software, licensing, and admin.&nbsp;<\/p>\n\n\n\n<p>So keeping on top of your cash flow and making sure your profit margins are thick enough for your business to succeed is key.&nbsp;<\/p>\n\n\n\n<p>As we\u2019ve just mentioned, profit margins for restaurants vary depending on the kind of business you\u2019re running, and how you run it.&nbsp;<\/p>\n\n\n\n<p>The bottom line is that costs in the restaurant industry are higher than most. Pair that with the fact that pricing in the sector is highly competitive and it comes as no surprise that margins seem relatively low.&nbsp;<\/p>\n\n\n\n<p>Caf\u00e9s, for example, see profit margins as high as 20%, while high-end catering companies can see margins of around 15%.&nbsp;<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Small business survival toolkit<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get your free guide, business plan template, and cash flow forecast template to help you run your business and achieve your goals.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-aee5a8c2-281d-42bb-8da2-eda5b62f63c6\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your free toolkit<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t<div class=\"single-cta__downloads\">\n\t\t\t\t\t\n\t\t\t\t\t10,548 readers have downloaded this toolkit\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1327127856-1440x810.jpg\" class=\"single-cta__image\" alt=\"Female hands working on a laptop\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1327127856-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"but\"><strong>But how much do restaurants actually make?<\/strong>&nbsp;<\/h2>\n\n\n\n<p>We\u2019ve already touched on the fact that your restaurant\u2019s annual turnover depends on a number of variables, so it\u2019s difficult to nail down a realistic figure, particularly when you\u2019re the new kid on the block.&nbsp;<\/p>\n\n\n\n<p>That being said, the overall numbers for restaurants or food-service businesses in the US are encouraging despite the challenges faced during the pandemic.&nbsp;<\/p>\n\n\n\n<p>According to the <a href=\"https:\/\/www.npd.com\/news\/press-releases\/2021\/the-u-s-restaurant-industry-recovery-through-second-quarter-has-been-slow-and-steady\/\" target=\"_blank\" rel=\"noreferrer noopener\">NDP Group<\/a>, 2021 saw a steady recovery from the pandemic, with restaurant attendance overall returning to pre-pandemic levels.&nbsp;<\/p>\n\n\n\n<p>While still not back above pre-pandemic levels, quick-service restaurants, which account for 81% of restaurant visits in the U.S., realized a gain of +15% in 2021.&nbsp;<\/p>\n\n\n\n<p>And although slightly down overall, compared to pre-pandemic levels, dine-in, (or on-premises), visits to full-service restaurants increased by +214% in 2021, compared to a decline of -80% in 2020.&nbsp;<\/p>\n\n\n\n<p>According to the <a href=\"https:\/\/www.ers.usda.gov\/topics\/food-markets-prices\/food-service-industry\/market-segments\/\" target=\"_blank\" rel=\"noreferrer noopener\">Economic Research Services at the US Department of Agriculture<\/a>, in 2021 full-service and fast-food restaurants\u2014the 2 largest segments of the commercial food service market\u2014accounted for about 70.5% of all food-away-from-home sales.&nbsp;<\/p>\n\n\n\n<p>That\u2019s still an impressive sign of recovery considering the unique challenges faced by the sector as a result of the pandemic and rising cost of food.&nbsp;<\/p>\n\n\n\n<p>The US Government created \u201cThe American Rescue Plan Act of 2021 (ARPA)\u201d that provided funding to help small-business restaurants continue trading despite any revenue losses caused by the pandemic. $5 billion of which was allocated to the restaurants whose gross earnings were less than $500,00.&nbsp;<\/p>\n\n\n\n<p>As more people are vaccinated and restrictions continue to ease, we can expect numbers to continue to grow as the country regains economic stability.&nbsp;<\/p>\n\n\n\n<p><strong>How to calculate profit margin for your restaurant business<\/strong>&nbsp;<\/p>\n\n\n\n<p>When it comes to calculating profit margins for your restaurant, there are 2 types you need to know about: gross profit and net profit margins, respectively.&nbsp;<\/p>\n\n\n\n<p>Restaurant gross profit is what remains after you\u2019ve deducted all the costs of goods sold (CoGS) and is particularly useful when it comes to measuring the day-to-day efficiency of your business.&nbsp;<\/p>\n\n\n\n<p>However, it doesn\u2019t factor in things such as running costs, making it just part of a wider, more detailed picture.&nbsp;<\/p>\n\n\n\n<p>And that\u2019s where your net profit comes in.&nbsp;<\/p>\n\n\n\n<p><strong>Gross profit margin<\/strong>&nbsp;<\/p>\n\n\n\n<p>To calculate your gross profit margin, use this formula:&nbsp;<\/p>\n\n\n\n<p><strong>(Selling price \u2013 CoGS) \/ Selling price = Gross profit<\/strong>&nbsp;<\/p>\n\n\n\n<p><strong>Gross profit x 100 = Gross profit margin in %<\/strong>&nbsp;<\/p>\n\n\n\n<p>So, if you\u2019re selling a main course for $18, and it costs $6 to make, here\u2019s how that calculation would look in action:&nbsp;<\/p>\n\n\n\n<p><strong>$18 \u2013 $6 = $12<\/strong>&nbsp;<\/p>\n\n\n\n<p><strong>12\/18 = 0.67<\/strong>&nbsp;<\/p>\n\n\n\n<p><strong>0.67 x 100 = 67% Gross profit margin<\/strong>&nbsp;<\/p>\n\n\n\n<p><strong>Net profit margin<\/strong>&nbsp;<\/p>\n\n\n\n<p>Next up, your net profit margins.&nbsp;<\/p>\n\n\n\n<p>This is the best way to check on the overall profitability and success of your establishment.&nbsp;<\/p>\n\n\n\n<p>Simply put, you need to deduct the costs of running your restaurant from the total revenue. Those costs include anything from supplier invoices to payroll, rent, utilities, taxes, and so on:&nbsp;<\/p>\n\n\n\n<p><strong>Total revenue \u2013 Total expenses* = Net profit<\/strong>&nbsp;<\/p>\n\n\n\n<p><strong>(Net profit \/ Revenue) x 100 = Net profit margin<\/strong>&nbsp;<\/p>\n\n\n\n<p><em>*Total expenses = CoGS plus the costs of running your restaurant as detailed above.<\/em>&nbsp;<\/p>\n\n\n\n<p>And to put that into practice, say your revenue for last month was $100,000, with expenses of $60,000:&nbsp;<\/p>\n\n\n\n<p><strong>$100,000 \u2013 $60,000 = $40,000<\/strong>&nbsp;<\/p>\n\n\n\n<p><strong>$40,000\/$100,000 = 0.4<\/strong>&nbsp;<\/p>\n\n\n\n<p><strong>0.4 x 100 = 40% Net profit margin<\/strong>&nbsp;<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Small business survival toolkit<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get your free guide, business plan template, and cash flow forecast template to help you run your business and achieve your goals.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-aee5a8c2-281d-42bb-8da2-eda5b62f63c6\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your free toolkit<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t<div class=\"single-cta__downloads\">\n\t\t\t\t\t\n\t\t\t\t\t10,548 readers have downloaded this toolkit\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1327127856-1440x810.jpg\" class=\"single-cta__image\" alt=\"Female hands working on a laptop\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1327127856-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>So, how much do restaurant owners make?<\/strong>&nbsp;<\/p>\n\n\n\n<p>According to Glassdoor, the\u202f<a href=\"https:\/\/www.glassdoor.com\/Salaries\/restaurant-owner-salary-SRCH_KO0,16.htm\" target=\"_blank\" rel=\"noreferrer noopener\">average salary for a restaurant owner<\/a>\u202fin the US is $60,659.&nbsp;<\/p>\n\n\n\n<p>From broken equipment to faulty plumbing, missing inventory and beyond, unexpected costs are a fact of life when you work in this industry.&nbsp;<\/p>\n\n\n\n<p>Your early days as a restaurant owner can feel overwhelming at times but there are ways to prepare and account for these financial road bumps and make sure you still pay yourself a decent salary.&nbsp;<\/p>\n\n\n\n<p>And remember, if this is your first year in business, your expectations for salary and turnover need to reflect that if you\u2019re going to reap the rewards in the long term.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"how\"><strong>How to improve profit margins for restaurants: Minimize costs and increase revenue<\/strong>&nbsp;<\/h2>\n\n\n\n<p>Shoring up your profit margins is about more than the way you price your food and drink offering and keeping an eye on your\u202fprofit and loss account.&nbsp;<\/p>\n\n\n\n<p>Here are a few top tips for boosting revenue and\u202fcutting down on unnecessary costs.&nbsp;<\/p>\n\n\n\n<p><strong>Tips for increasing restaurant revenue<\/strong>&nbsp;<\/p>\n\n\n\n<p><strong>Ecommerce<\/strong>&nbsp;<\/p>\n\n\n\n<p>Over the past year, restaurants and cafes across the country have kicked their ecommerce plans into overdrive.&nbsp;<\/p>\n\n\n\n<p>Some venues ramped up their existing online offering, while others, such as coffee chain PJ\u2019s Coffee, pivoted their operations during the pandemic to make ordering via mobile easy, allowing guests to \u201corder, pay, customize their favorite products, earn rewards, and find their nearest PJ\u2019s Coffee locations all from a few clicks on their device,\u201d according to Ryan J. Stansbury, its CFE and Vice-President.&nbsp;<\/p>\n\n\n\n<p>How could you follow suit?&nbsp;<\/p>\n\n\n\n<p>Consider creating a smaller menu for deliveries and collection, and maybe even branded merchandise that give customers the opportunity to enjoy your unique flavours at home.&nbsp;<\/p>\n\n\n\n<p>Take Dishoom, for example. The popular chain has an online store where customers can buy meal kits to help recreate their favorite meals at home, as well as cocktail kits, and their iconic cookbook.&nbsp;<\/p>\n\n\n\n<p><strong>Loyalty programme<\/strong>&nbsp;<\/p>\n\n\n\n<p>Consider setting up a loyalty programme to encourage customers to keep coming back, especially in your early days in business.&nbsp;<\/p>\n\n\n\n<p>You could offer anything from exclusive discounts and promotions to a freebie with every tenth meal.&nbsp;<\/p>\n\n\n\n<p>The choice is yours and your customers will thank you for it.&nbsp;<\/p>\n\n\n\n<p><strong>Evaluate your menu<\/strong>&nbsp;<\/p>\n\n\n\n<p>When you\u2019re planning your menu, take a quality over quantity approach.&nbsp;<\/p>\n\n\n\n<p>While it\u2019s important to offer your customers a good range of options, and cater for different dietary requirements, having too many items on the menu can be overwhelming to diners and staff alike.&nbsp;<\/p>\n\n\n\n<p>On top of that, you\u2019ll find yourself spending money on huge amounts of food that will likely expire before you get a chance to use it, which is essentially like throwing money in the bin.&nbsp;<\/p>\n\n\n\n<p>Review your menu regularly to figure out what works, what doesn\u2019t, and what you should try next to keep customers coming back for more.&nbsp;<\/p>\n\n\n\n<p><strong>Upgrade your POS<\/strong>&nbsp;<\/p>\n\n\n\n<p>A modern, cloud-based point of sale (POS) does more than simply process payments or organize reservations.&nbsp;<\/p>\n\n\n\n<p>Tap into your POS to dig into all your restaurants\u2019 most important insights and use that data to run your business more effectively.&nbsp;<\/p>\n\n\n\n<p>It will help you ensure you\u2019re getting more out of every dollar and cent.&nbsp;<\/p>\n\n\n\n<p><strong>Rethink your floor plan<\/strong>&nbsp;<\/p>\n\n\n\n<p>Get creative with the way you use your space.&nbsp;<\/p>\n\n\n\n<p>The number of covers you can accommodate every day can make a huge difference to your bottom line, so it\u2019s worth spending time on your floor plan, making the most of what you\u2019ve got.&nbsp;<\/p>\n\n\n\n<p>With coronavirus restrictions in place, restaurants and cafes all over North America have had to get creative with their floorplans, finding a healthy balance between public safety and making enough covers daily to keep doors open.&nbsp;<\/p>\n\n\n\n<p><strong>Get social<\/strong>&nbsp;<\/p>\n\n\n\n<p>Are you making the most of social media to boost your business?&nbsp;<\/p>\n\n\n\n<p>When it comes to advertising, you need to be where your customers can see you. And chances are, 99% of your target market are on social media platforms such as Instagram, Facebook, and TikTok.&nbsp;<\/p>\n\n\n\n<p>Create profiles on the platforms that your customers are using and post regular updates about your restaurant, including tantalizing photos of your dishes and snaps of your friendly staff to give a face to your business.&nbsp;<\/p>\n\n\n\n<p>And don\u2019t worry about trying to have a presence on all of them\u2013focusing on 1 or 2, at least to start with, is a good approach. And that way, you won\u2019t be too stretched.&nbsp;<\/p>\n\n\n\n<p>Most social media platforms today favor video content, or are entirely video-based, so consider creating quick videos of staff doing their thing, your best dishes coming together, or sharing some pro kitchen tips people can try at home.&nbsp;<\/p>\n\n\n\n<p>If you don\u2019t have a\u202f<a href=\"https:\/\/www.google.com\/intl\/en_uk\/business\/\" target=\"_blank\" rel=\"noreferrer noopener\">Google My Business<\/a>\u202flisting yet, go ahead and get that sorted first.&nbsp;<\/p>\n\n\n\n<p>This is a free Google profile you can set up which will make your restaurant easier for people to find. It also provides key information such as location, opening hours, and reviews, which you can also ask satisfied customers to leave as part of your social marketing plan.&nbsp;<\/p>\n\n\n\n<p><strong>Tips for minimizing costs<\/strong>&nbsp;<\/p>\n\n\n\n<p><strong>Reduce cost of goods sold<\/strong>&nbsp;<\/p>\n\n\n\n<p>When planning your menu, take CoGS into account to keep quality high without sacrificing your profit margins.&nbsp;<\/p>\n\n\n\n<p>You don\u2019t have to go for lower-quality ingredients to do this. Simply shop around and get quotes from different vendors to find the best deal before signing on the dotted line.&nbsp;<\/p>\n\n\n\n<p>Ensuring you have accurate inventory numbers is also central to keeping these costs down while reducing food waste, which is a huge issue in the food and drink industry today.&nbsp;<\/p>\n\n\n\n<p><strong>Reduce waste<\/strong>&nbsp;<\/p>\n\n\n\n<p>Staying on top of your inventory is just one part of the banquet that is your business.&nbsp;<\/p>\n\n\n\n<p>Make sure you\u2019re serving up the right portion sizes for each course.&nbsp;<\/p>\n\n\n\n<p>While some customers will thank you for a large portion of their favourite dish, more often than not you\u2019ll just end up with more food being thrown out and wasted at your expense.&nbsp;<\/p>\n\n\n\n<p>Review your menu regularly to find out what\u2019s not selling and let your food orders reflect that.&nbsp;<\/p>\n\n\n\n<p>If your original-recipe Wagyu burgers are not working for this demographic, cut them from the menu and stop letting valuable stock go to waste and eat into your bottom line.&nbsp;<\/p>\n\n\n\n<p><strong>Decrease staff turnover<\/strong>&nbsp;<\/p>\n\n\n\n<p><a href=\"https:\/\/www.sage.com\/en-ca\/blog\/hiring-to-build-a-winning-team\/\" target=\"_blank\" rel=\"noreferrer noopener\">Hiring and training new employees<\/a>\u202ftakes time and money, so keeping staff turnover to a minimum is key.&nbsp;<\/p>\n\n\n\n<p>This is a competitive industry, and having a great server or in-demand chef on side can be what brings in that all-important repeat business.&nbsp;<\/p>\n\n\n\n<p>Invest in regular training for your staff so everyone stays sharp and feels motivated to continue developing their skills.&nbsp;<\/p>\n\n\n\n<p>Make sure you pay your people a fair wage and, if you can, offer an attractive benefits package to keep your team feeling happy and appreciated.&nbsp;<\/p>\n\n\n\n<p>In line with that, remember to take the time to celebrate success and give shout-outs to individuals when you see exceptional work being done, or notice employees going above and beyond to offer great service.&nbsp;<\/p>\n\n\n\n<p>On the flipside of that, it\u2019s worth working with your restaurant manager to get processes in place to handle sub-standard performance and address issues before they become a bigger problem.&nbsp;<\/p>\n\n\n\n<p>For example, if a member of staff is consistently late, texting on the job, and not offering the right kind of customer service, what will you do to resolve that?&nbsp;<\/p>\n\n\n\n<p>You might opt for a formal 3-strike warning system, or arrange 1-on-1 time to talk to that employee and work out a plan to improve their performance together.&nbsp;<\/p>\n\n\n\n<p>The key is finding what works for your business.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Final thoughts: Preparation is key<\/strong>&nbsp;<\/h2>\n\n\n\n<p>In the kitchen it really is all about nailing that prep time\u2014and it\u2019s no different when it comes to the financial side of your business.&nbsp;<\/p>\n\n\n\n<p>Good planning and preparation are the key to making sure you stay in profit, with thick enough margins to continue nurturing your business and maybe even expanding your operations.&nbsp;<\/p>\n\n\n\n<p>From\u202f<a href=\"https:\/\/www.sage.com\/en-ca\/blog\/savings-advice-for-small-businesses\/\" target=\"_blank\" rel=\"noreferrer noopener\">estimating figures for your business plan<\/a>\u202fto figuring out which suppliers to use, what to serve, who to hire, and beyond, there\u2019s no detail too small to consider when you\u2019re running your own restaurant.&nbsp;<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>In this article, we\u2019ll help you to understand profit margins for restaurants, so you can apply the learnings to your business.\u00a0<\/p>\n","protected":false},"author":1228,"featured_media":16390,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[43],"tags":[34],"business_type":[40],"lilypad":[],"context":[],"industry":[],"persona":[],"imagine_tag":[],"coauthors":[925],"class_list":["post-16377","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-small-business","business_type-small-business"],"sage_meta":{"region":"en-us","author_name":"Kelly Dent","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/03\/GettyImages-525498442_super-1-768x585-1.jpg","imagine_tags":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/16377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/1228"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=16377"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/16377\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/16390"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=16377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=16377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=16377"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=16377"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=16377"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=16377"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=16377"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=16377"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=16377"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=16377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}