Realize profits of 70%, 80% even 100%!

A restaurant's most profitable time occurs when it is busiest. This is because a busy restaurant is most likely able to exceed their fixed cost, crossing over their "break-even" point. Only when all the fixed costs are paid for does a restaurant begin to make a profit. Once past this point the profit margin is very high on each additional dollar of revenue generated. If you divide restaurant costs into fixed and variable cost and calculate when the fixed costs have been paid then you can determine the margin of profit on each additional dollar of revenue earned. So for every additional dollar earned past the break-even point is 70% to 80% profit.

Variable costs in a restaurant are the costs of the items prepared or served at the time of an order. Typically restaurants have variable food costs of 20-30%. Restaurant operators have to properly balance the mix of fixed costs (their initial investment and committed resources) and revenue cycles so that profits are maximized. Too much fixed costs (initial investment and committed resources) in relation to revenues and the operation will not reach profitability often enough and therefore not maximize profits and may never earn a profit. This dilemma is essentially why restaurants can make tremendous amounts of money or only lose money and rarely just get by.

There are circumstances where there are no variable cost and the profit margin is 100%. This can occur when items served are already prepared and have become fixed costs because if they are not served then they are discarded.  Just think of all the items prepared ahead of time that can't be saved. If you had additional capacity then you might capture additional 100% profit sales. Even if this is a small amount it could add up to big profits. A $200 increase in weekly sales at 100% profit could be $10,400 in a year. Plus don't forget TABLECHECK also lowers your labor costs, improves service and turns more tables.

So when your restaurant is busiest (and this is when TABLECHECK helps you the most) you can expect to have profits at or above your net variable cost margin or better!

If you've ever heard the old saw "make hay while the sun is shining" and in the restaurant business hay=profit and sunshine=busy, then capturing additional revenues at precisely the right moment greatly impacts your profitability.

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How much profit does it mean in an actual restaurant?

see the additional profit in the concise analysis

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