Breaking Even- It's a bit more complicated
than revenue = expenses
Businesses live and die by their daily break even sales number. This is especially true for the restaurant industry. Operators need to know that daily sales revenue they must attain in order to pay its expenses and break even. This is however, easier said than done because with the restaurant business there are so many factors out of the operator's control that can affect their capability of breaking even on a daily basis. These challenges include items such as the weather, equipment malfunctions and unforeseen circumstances. The weather is a common one as diners typically will choose to stay in if the weather is too cold or stormy. Equipment malfunctions can include broken AC units or leaking pipes which would cause uncomfortable conditions for guests, who would likely choose to dine elsewhere. A perfect example of unforeseen circumstances was the county wide power outage that occurred last month leaving most restaurants no choice but to close their doors and send home their staff for what would have been for many a busy Thursday night of sales. Circumstances such as these may seem few and far between but the reality is each day a break even number is missed the following day's break even must be that much higher. To make matters more difficult if a break even is missed on an expected busy day, such as a Saturday night then it makes it that much harder to meet your monthly break even.
So what is the key to ensuring not only break even but profitability? The answer is in cost controls, reducing variable expenses as much as possible, establishing lower fixed costs and generating more revenues above and beyond expected as often as possible. A good way to establish cost controls is to write budgets and operate with them daily. It is also a good idea to take a strong look at your P&L and see if there are any efficiencies to be found. It is quite a bit of work but it is a key ingredient to success.
For help on establishing break even, writing budgets or analyzing your P&L please contact Flores Financial at 619-588-2411 to speak with an experienced associate.
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FFS Corner- What's Going on at Flores Financial?
The Flores Team has been busy bees the past few months as they prepare to head into the final quarter of the year. Year end preparation require a great deal of time and dedication for each of our valued clients and thus the FFS workers are taking every step necessary to ensure the work goes smoothly and another successful year is closed. This newsletter we wish to congratulate our FFS All-Stars for the month of August and September. Our August All -Star was awarded to Liz Barba. Liz is a huge asset to our grocery division and has ensured that our newest team members receive the best training. She is always willing to take on new projects and has truly grown to be one of the best team players we could ask for. Liz shows great potential for future continued success. Our September All-Star was awarded to Rowdy Pauu. Within one short year Rowdy filled a much needed role at Flores, that of an IT Supervisor. He worked diligently on his computer skills and proved to the management team that he was our internal IT solution.He was a tremendous help in ensuring the FFS offices were up and running to serve our clients the day following the San Diego blackout. He is always willing to go that extra mile. We really appreciate these two All-Stars!
Flores Financial wishes to welcome our newest clients to our restaurant division, Na Pizza, KiJ's Cafe, Carnita's Snack Shack, The Village @631, El Dorado, Craft & Commerce, Neighborhood, and Nobel Experiment. We are excited to work with them and provide them with the best service possible!
This past month the Flores team gathered for their first Annual Company Picnic. It was a hot summer day out at the park but the team came together to enjoy the afternoon and have some fun. We also held a fundraiser to raffel off an I-Pad 2. Congratulations to our winner, fellow FFS team member Susan Milow! Also a big thank you to all of our participants, together we were able to raise over $550 for the NFAR San Diego chapter. It was a great day and we look forward to next year's event!
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