What Are Some General Targets for a Restaurant Budget?
If I’ve said it once, I’ve said it 1 million times: the two most important systems any restaurant should have are budgets and recipe costing cards. Let’s talk budgets. I am probably on at least one to two budget calls a week with members asking where their numbers should be. Some calls are a simple numbers review because we have already created their budget and now they are measuring for success. Many other calls are to create a new member's budget. Once the budget template has been verified, it’s time to get down to business to create each member's plan for success. The most common questions I get when we work together revolve around where should my numbers be?
In this episode of my podcast, The Restaurant Prosperity Formula, I’m going to walk you through the various options for your budgeted numbers because there is no one answer that is right for everyone. There is no average that every restaurant owner should aim for. Once I explain how I teach a restaurant owner where their restaurant budget numbers should be, I’ll talk about the target profit margin and why knowing your numbers is so important to your restaurant’s success.
A budget is so important to your restaurant’s success because it tells you where your numbers should be. As the leader of your restaurant, you need to lead the business with the right numbers. I’m coaching my members to look beyond whether there is money in the bank. They need to ask what specific targets to aim for in sales, COGS and labor? Then they need to examine whether they hit or missed those targets and what they need to do to make sure they hit the next set of targets. That could be using new systems, adjusting existing systems, examining those systems for misuse, or just finding where someone took their eye off the targets.
A budget is a proactive system and it’s critical to your success. If you don't have a budget, how do you know where your numbers should be? You can’t rely on industry averages because you’re not average.
In my 24-week coaching program, budgets are done from 10-13 weeks. They’re that important and there is a lot of work that goes into it. I always tell members, it's probably the biggest and most important thing we do together he most important thing we do together. It’s the thing that we do together that will make the greatest impact in their business.
Listen to this podcast to hear the process I go through with my members and how you can use your budget to find your restaurant’s target numbers and how you can get there in your restaurant.
I also explain ways you can adjust your business to help you start hitting those target numbers and share examples of what others I work with have done. The goal is to get you to a 15-20% profit margin if you’re making more than $850,000 in sales per year. You can’t get there without a budget.
Make creating and maintaining a budget your priority if you want to stop throwing your restaurant profitability to dumb luck, if you want to have a life. Because I'm going to tell you right now, armed with the general numbers I give you in this podcast, you can do a really good job on your own. But the truth of the matter is this if you just have a budget in the first place, creating your plan for success, you've got a greater opportunity to make the money you deserve because you know your numbers. That which you measure improves.