A surprising number of hospitality operators run their venue successfully without genuinely understanding their own profit and loss statement, which makes it very difficult to make good decisions.
Start With Revenue and Understand the Composition
Understand how revenue breaks down between food and beverage, between day parts, and between different revenue streams.
Understand the Difference Between Cost of Goods and Operating Expenses
Cost of goods moves roughly in proportion to revenue. Operating expenses like rent are largely fixed regardless of how busy you are.
Food Cost Percentage Tells You Half the Story
A low food cost achieved by cutting portion sizes might look good on paper while damaging your reputation. Our food cost consulting service covers how to manage this properly.
Labour Cost Needs to Be Viewed Across the Full Period
Look at labour cost trends over several months rather than reacting to a single unusual period.
Understand Your Break-Even Point
Your break-even point tells you how much buffer you have on a quiet week and how much additional revenue translates directly into profit.
Look at Trends, Not Just Single Periods
Comparing several months tells you whether your business is genuinely improving, declining, or holding steady.
If you want help understanding your numbers properly, talk to Pestle and Mortar.
About the Author
Wayne Farmer is the founder and chief consultant at Pestle and Mortar, Australia’s hands-on hospitality consultancy. With experience running hotel kitchens, boutique dining venues, and a successful catering business, Wayne has spent his career helping Australian restaurant, cafe, and catering operators build more profitable, better-run businesses. Learn more about Wayne and how Pestle and Mortar works.