The Math Behind Your Restaurant Profits - Part 2 - Restaurant Systems Pro

The Math Behind Your Restaurant Profits – Part 2

Posted June 15, 2010

In 1. David Scott Peters, Food Costs, Tip of the Day

By David Scott Peters

Restaurant Tip of the Week

Formulas give consistency to pricing. Many of the financial relationships necessary to develop an effective pricing structure can only be derived through mathematics. Following is one such formula.

Cost percentage
The cost percentage is a measure used to indicate the relationship between a product’s cost of sale and margin of profit. Cost percentage is derived by dividing an item’s cost (or portion cost) by its sale price.

37 cents per ounce x 1.5 ounces = 55 cents portion cost.
55 cents divided by $3.50 = 15.7 percent.

David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in teaching independent restaurant owners how to use systems for increased sales and increased profits. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit www.TheRestaurantExpert.com for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at TheRestaurantExpert.com.

David Scott Peters, food and beverage, food cost, independent restaurant owner, independent restaurant owners, restaurant expert, restaurant systems, rsetaurant profits

Fred Langley

Fred Langley is the Owner/CEO of RestaurantSystemsPro.net. He leads the company's consulting services, systems coaching, conducting seminars and overseeing the training and technical support team for the company's management software,RestaurantSystemsPro.