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operational efficiency and require a lot of time and attention to
4) GROSS PROFIT
Gross profit shows the profit a restaurant makes after accounting
for its cost of goods sold. The resulting gross profit represents
the money available to put towards paying off fixed expenses and
profit. To calculate gross profit, subtract the total cost of goods
sold during a specific time period from your total revenue (the
total sales of food, beverages, and merchandise).
Calculating Gross Profit
If a restaurant’s total sales number for the month is $15,107 and
its cost of goods sold is $5,293, the restaurant’s gross profit for
the month is equal to $15,107 (total sales) - $5,293 (COGS) or
$9,814.
The equation for gross profit is:
Total Sales - COGS = Gross Profit
5) EMPLOYEE TURNOVER RATE
Turnover rate is the percentage of employees that leave or are
fired that need to be replaced during a specific time period.
Therestaurant industry has a notoriously high employee turnover
rate compared to all other industry segments. In the fast-paced
foodservice environment, high employee turnover can hurt
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get new hires up to speed.
How to calculate employee turnover rate:
Start by adding the total number of employees at the beginning
and end of a given period of time. Then, divide the sum by 2 to
find the average number of employees during the set period.
Take the difference between the number of employees at the
beginning and end of the set time frame and divide the number
of employees who left by the average number of employees.
The equation for employee turnover rate is:
(Starting Number of Employees + Ending Number of Employees)
/ 2 = Average Number of Employees
Lost Employees / Average Number of Employees =
Employee Turnover
If you have 10 employees at the beginning of a given month and
8 at the end the equation would look as follows:
(10 + 8) / 2 = 9
2 / 9 = .222
To calculate turnover rate, simply multiply the quotient (.222)
by 100 to get the turnover percentage. So, in this example, the
turnover rate is .222 * 100 or 22.2%.
In order to gain true business insight and value from these
metrics, restaurant owners should get in the habit of calculating
and recording them regularly, on a weekly or monthly basis.
Over time, this allows restaurant owners to compare their
establishment’s current performance to historical data in order to
identify problem areas and trends.
Originally featured on the Toast Restaurant Management Blog.
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for more restaurant management tips!
WRITTEN BY: SAMUEL KUSINITZ
https://pos.toasttab.com/blog/
author/sam-kusinitz
Product marketer at Toast 