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Are You Ready for a Second Restaurant?

Jan 12, 2016 9:08:03 AM / by Brian Paulson posted in restaurants

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If you’re contemplating opening a second location for your restaurant, chances are business is good. Just because your existing location is providing positive cash flow, however, isn’t the only mark that you’re ready for expansion.

Several factors to determine if you’re ready to open another restaurant should be considered before committing to the process.

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The Importance of Accurate Restaurant Performance Metrics

Jan 12, 2016 8:58:58 AM / by Brian Paulson posted in restaurants

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With so many moving parts involved in operating a restaurant, calculating and reviewing performance metrics over time is a way to spot negative trends and identify areas of improvement.

This becomes especially important for restaurateurs who don’t play a hands-on role in the daily activities of running the business.

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What to Include in a Restaurant Profit & Loss Statement

Jan 12, 2016 8:46:46 AM / by Brian Paulson posted in restaurants

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Restaurant profit and loss statements are utilized to record and analyze revenue and expenses over a predetermined period of time. Due to the nature of the restaurant business, monthly statements are recommended to keep tabs on what is affecting your business on a consistent basis. Should you need to make any adjustments, you can implement the changes sooner than later.

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What’s the Correlation Between Cash Flow and Profit for Restaurants?

Dec 30, 2015 4:15:33 PM / by Brian Paulson posted in restaurants

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Looking at your restaurant profit and loss statements will show how sales are driving your bottom line. But, restaurant cash flow is a separate entity from your profit-making activities.

Profit doesn't equal cash flow in a restaurant business.

Understanding the nuances between cash flow and profit can be a bit challenging at first. Fluctuations in debt and changes in the amount of equipment owned are the primary drivers, especially for new establishments with high up-front expenses.

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How to Calculate Restaurant Prime Cost

Dec 22, 2015 9:20:00 AM / by Brian Paulson posted in restaurants, small business accounting

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Managing food and labor costs is a crucial aspect of running a profitable restaurant or food service business. Combined, these controllable costs are known in the industry as your prime cost, which is reported as a percentage of your sales.

To remain profitable in the restaurant business, your maximum prime cost should generally be lower than 65%. As food and labor costs vary among different types of operations, prime cost ranges may dip as low as 55%. Finding your sweet spot within this range will help you achieve profitability without negatively affecting service and quality of your offerings.

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Top Three Accounting Best Practices for Restaurants

Nov 12, 2015 9:42:00 AM / by Brian Paulson posted in restaurants, small business accounting

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Looking out over a crowded dining room is one way to measure success in the restaurant industry, but it may not be the most effective benchmark to gauge profits. Profitable restaurants are backed by sound accounting practices and consistent reporting.

A recent survey of independent restaurant owners asked its members a series of questions regarding the use and frequency of common accounting best practices. Best practices covered were:

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