Essay - Introduction One of the Primary Reasons that Restaurants and Bars...

Introduction

One of the primary reasons that restaurants and bars fail is that owners and operators fail to implement a food and beverage control system. Without one, they have no way of knowing if anything is missing or if costs do not measure up ***** st*****ard. A ***** system is a necessary and beneficial tool in maximiz*****g pr*****it and keeping waste and pilferage to a minimum.

Profit Planning

One of the most critical aspects ***** food ***** beverage control ***** profit planning. In the final analysis, ***** profit generated must be sufficient ***** keep the business running and the owner pleased with the investment.

Three ratios are extremely imp*****tant in ***** planning:

Operating Ratio = Net Income Before Taxes / Net Sales: This ratio is commonly known as net profit to net sales. The higher this ratio is, the better. For example, in full service operations with an average check of less th***** ten dollars, the median operating ratio is usually greater for units serving food only, compared to those serving both food ***** alcohol. Franch*****e-operated multi-units produce more than either company-operated multi-units or independents. Operating ***** incre*****es as sales volume increases. F***** full service ***** with an average ***** of more ***** ***** dollars, the ***** ratio is better for businesses serving both food *****d alcohol ***** to food-only places. Multi-unit, ***** units have a greater median operating profit than independents. Insufficient data exists for multi-unit franchises to compare. As above, operating ***** increase as sales volume goes *****. For limited service ope*****ns, the operating ratio is ***** ***** company-owned chains.

Management Proficiency ***** =Net Profit After Taxes / Total Assets: Th***** ratio indicates what management does with the *****sets its has. The higher ***** *****, the ***** job that management is doing.

***** Profit to Net Equity = ***** ***** ***** Taxes / Net Equity: Some businesses make a relatively small profit on each item sold. Still, ********** rely on a large ***** with a relatively small investment *****d to sales to ***** a modest oper*****ting ratio but a good net ***** ***** net equity.

According to experts, there are several things that a rest*****urant can do to increase profitability. (Nation's Restaurant News)

***** a detailed income statement.

Hire an account*****t ***** food service experience.

Moni*****r daily purchases.

Buy only cost-saving equipment

Base ***** on menu items.

Plan one week in advance to prevent unexpected events.

Shop for lower insurance rates.

***** and test servers in ***** knowledge.

Promote food and ***** items.

***** menu excit*****g.

Use entertainment as profit streams.

***** merchandise sales.

In order to create profit, ***** are necessary. Spending money up front can often save money in the long run. Balancing ***** and beverage costs and labor costs are essential ***** profit planning, which is ultimately essential for *****.

***** of Control

To calculate the costs of food ***** *****, restaurants ***** rely on a simple *****mula:

Opening Inventory (dollar value for ***** and beverages already purchased ***** ***** hand at the start of