The Math Behind Your Restaurant Profits – Part 2
By David Scott Peters
Restaurant Tip of the Week
Formulas give consistency to pricing. Many of the financial relationships necessary to develop an effective pricing structure can only be derived through mathematics. Following is one such formula.
The cost percentage is a measure used to indicate the relationship between a product’s cost of sale and margin of profit. Cost percentage is derived by dividing an item’s cost (or portion cost) by its sale price.
37 cents per ounce x 1.5 ounces = 55 cents portion cost.
55 cents divided by $3.50 = 15.7 percent.
David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in teaching independent restaurant owners how to use systems for increased sales and increased profits. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit www.TheRestaurantExpert.com for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at TheRestaurantExpert.com.