Why do Most Restaurants Fail?

Why do Most Restaurants Fail?


Most independent restaurants fail because they don’t spend the time to understand their largest cost, the cost of goods. Cost of goods represents as much as 18-40% of every dollar in sales. If not controlled, it can be much higher, and unfortunately, some restaurants don’t even know this number.

Calculating the Cost of Goods Sold (COGS).

COGS = Beginning Inventory + Purchases during the period – Ending Inventory

Take this quick Survey!

Do I have processes in place to manage my largest cost? Are these processes documented, and all my staff trained?
Do I shop multiple vendors?
Am I doing all I can to manage my inventory
Is this on my mind each and every day?
Do I count Inventory at least monthly?
Based on sales, do I know how much inventory I am missing based on least my high-cost items?
Do I know the theoretical cost of all my menu items?
Do I manage my rebates?

If you answered NO to any of these questions, you can benefit from taking advantage of a Purchasing and Inventory system and/or company to help you manage your costs.

In upcoming blogs, we will breakdown managing your inventory into small steps that, if followed, will help you have full control over your largest cost.

1. Rebate Management
2. Purchase Smart
3. Verify bid price matches invoice price
4. Accounting integration
5. Count Inventory
6. POS Integration
7. Recipe Analysis
8. Analysis your business

Email: Naomi.canning@diningedge.com or Contact Us at 561-880-2970 for more information.

Author: Naomi

Naomi is the President at Dining Edge based in Boca Raton, FL. Are you a restaurant owner or operator looking to reduce costs, streamline time & increase savings all-around in your restaurant? Contact me today to get started with your free demo.

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