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| Name | Average Restaurant Profit Margin for Independent Operators |
| Video Uploader | Video From David Scott Peters |
| Upload Date | This Video Uploaded At 07-06-2022 15:00:02 |
| Video Discription | Average Restaurant Profit Margin for Independent Operators - What do you think the average profit margin is for an independent restaurant? What if I told you that even in these challenging times, most restaurant owners are setting their sights too low? In this video, I'll explain what I mean and what you can expect if you follow systems. ****Why Your Restaurant Is So Challenging: https://dsp.coach/transformation-opt-in 📖 I wrote a book for restaurant owners and managers: https://amzn.to/2ZYlL7Y 🔔 Be sure to subscribe to this channel to get alerts when I post a new tip: http://bit.ly/2Yk484P 🎧 Take me on the go and listen to my podcast: https://dsp.coach/podcast ********************************** Welcome to my YouTube Channel. I am David Scott Peters, a restaurant coach and speaker who teaches restaurant operators how to cut costs and increase profits with my trademark Restaurant Prosperity Formula. Known as THE expert in the restaurant industry, I apply my no-BS style to teach and motivate restaurant owners to take control of their businesses and finally realize their full potential. Thousands of restaurants have used my formula to transform their businesses. To learn more about me and my coaching program, visit http://www.davidscottpeters.com. ********************************** Years ago, I remember the National Restaurant Association published that the average restaurant makes 5– 8% profit. That's a nickel on every dollar that comes in the door. Do you work as hard as you do for a nickel? I also always refer to a report issued by Ohio State University years back about a study that showed 62% of all restaurants fail in their first three years of business. The first three years of business! Then there's prime cost, which is your total cost of goods sold plus your total labor costs, including taxes, benefits, insurance, also known as controllable expenses. Well, for years the guideline was that you should be shooting for 65%. Following this guideline, for every dollar that comes in the door, you're using $0.65 in people and product to deliver that product. This just perpetuates the lower profit margins. What if I told you it's actually worse for most restaurant owners who don't take inventory values to calculate the cost of goods sold on a weekly basis and who don't budget for or track labor on a daily basis? Those restaurants run a 78% prime cost. With this kind of cost, you can see how it leads to that 62% failure rate. Now what if I told you by implementing systems from budgeting to checklists my members have learned that a 15% profit margin is within reach? With some hard work and a willingness to hold their managers accountable to the systems they actually put in place, my members see time off, time to work from home, time to grow their businesses, and they experience higher profit margins. One example of exactly this experience is my member, restaurant owner Brian. He attached his menu and took steps to control his kitchen labor and went from a 65% prime cost to 55% prime cost. He's now making an 18.5% profit margin. Or let's look at a lower volume restaurant. Patrick, with a low volume restaurant, attacked his labor cost and operating expenses to go from a 65% prime cost down to 54% prime cost. Now, he's only hitting a 9% profit margin, but this is the first time he's actually making money in his restaurant. Another of my members attacked their menu and labor costs, and added management, and went from a 92% prime cost at the beginning of the pandemic to a 57% prime cost, which literally saved her business. How about one more example? This time I want to give you the example in dollars. In 2020, this restaurant owner lost money on $3 million in revenue. She did a lot of hard work and finished 2021 with $3.7 million in revenue and a profit of over $626,000. That's a 17% profit margin. This is why when someone asks me what the average restaurant profit margin is I reply that with budgeting, implementing systems and holding your management team accountable, you should be shooting for a 15–20% profit margin. Ignore the averages because your restaurants not average. The key with all of these restaurant owners is they took action. Their first action was to get on a free discovery call with me. The rest of it, as they say, is history. ********************************** Find more about how to run a restaurant business on my other platforms: 👍 Facebook: http://www.facebook.com/davidscottpetersbiz 📸 Instagram: http://www.instagram.com/davidscottpeters 📱 Twitter: http://www.twitter.com/restaurantxpert 🔔 Subscribe to YouTube: http://bit.ly/2Yk484P 🎧 Podcast page: https://dsp.coach/podcast [2tUy2J0IGGY] |
| Category | Entertainment |
| Tags | Average Restaurant Profit Margin for Independent Operators | Average Restaurant Profit Margin | What is the Average Profit Margin for a Restaurant? | Restaurant Owner Salary Insight for Independent Operators | Why Are Restaurants' Profit Margins So Low? | Are Restaurants Profitable Business Case Study Explained | Restaurant Management Tip - How to Determine Restaurant Profit Margin #restaurantsystems | How Do Small Business Restaurants Make a Profit? | david scott peters |
