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When you open a restaurant, the first milestone you want to achieve is to reach the break-even point. Surpassing the point will be your second goal. So, if your establishment has reached this point, how can you exceed it?
Every restaurant owner tries to find a practical answer to this question. But first, you must understand what the break-even point is. In essence, this point occurs when there is an equilibrium between your eatery’s total expenses and total revenue.
To exceed this limit and earn profit, you need to optimize your menu pricing and reduce food wastage. Keep reading the article if you want to learn more. It will shed light on how to surpass the break-even point in your restaurant.
6 Ways Your Eatery Can Surpass the Break-Even Point
Going beyond the break-even point is mandatory to achieve profitability in your restaurant. Once you have successfully reached a position where the total restaurant costs equal the total earnings, you need to aim higher. Only then will you be able to achieve the desired monetary outcomes. For this, you should increase sales volume, use seasonal ingredients, and consult an expert. Let’s focus on the top six ways your eatery can surpass the break-even point:
1. Optimize Menu Pricing
It is your menu that can exponentially increase variable expenses in your restaurant. If such a thing happens, you will never be able to surpass the break-even point. That is why your first objective must be optimizing the menu pricing. Leveraging the competitive pricing model is a better way for this purpose.
By doing this, you can set the prices of dishes you offer in accordance with your competitors, target audience, and location. However, if you do not possess the required skills, it might be challenging for you. Restaurateurs contact hospitality consultants to achieve the milestone.
2. Reduce Food Wastage
Here is another thing that can keep you from exceeding the break-even point. If you lack proper inventory management and keep facing food wastage or ingredient spoilage issues, you must revisit your policy. Fortunately, you can adopt multiple approaches to minimize this financial burden.
Start by conducting a comprehensive waste audit. Knowing which area of your eatery causing the problem is essential to address the problem. Try to use the older ingredients before utilizing the fresher ones. Storing food properly, repurposing ingredients, and identifying unappealing items in your menus are also useful tricks.
3. Increase Sales Volume
The total number of beverages or dishes you sell in a given period is called the sales volume. In other words, it is also about the number of guests you serve each day. Increasing sales volume is one of the best strategies to surpass the break-even points in restaurants. Here is how you can do so:
- Use effective promotional tactics
- Offer dishes that are high in demand
- Enhance your online presence
- Start getting orders online
- Offer the best customer experience
Implementing the above approaches will help you augment the total sales volume in your eatery exponentially.
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4. Compare Actual vs. Theoretical Food Costs
Remember, there will always be a difference between the actual and theoretical food costs. Actual food costs refer to real expenses that an ingredient might incur. On the other hand, theoretical food cost is the expected cost that you think you might have to face regarding a particular ingredient.
The biggest difference between the two is that theoretical costs can be ideal and misleading. If you rely thoroughly on the theoretical cost, you will not be able to create a practical budget, identify waste, optimize the menu, and generate revenue. For this reason, it is a must to actively monitor both these costs if you want to go beyond the break-even point.
5. Use Seasonal Ingredients
If some of the food items on your menu require non-seasonal components, it would be better if you eliminate them. Only well-established and highly profitable establishments can bear the financial burden of such dishes. If your aim is to surpass the break-even point, try to use seasonal ingredients for the following reasons:
- Cutting the total cost
- Providing the opportunity to negotiate prices
- Lowering total expenses
- Attracting new customers
- Generating more revenue
That is why you must focus on offering a seasonal menu if want to earn a quick profit.
6. Consult a Hospitality Consultant
Last but not least, if you are running a restaurant for the first time, you might lack the required experience to enhance profit. This is where a hospitality consultant can come to your aid. These skillful individuals are highly trained with a matchless skill set. You can benefit from their expertise in this regard.
They will also help enhance operational efficiency, optimize the menu, improve inventory management, employ effective marketing, and train your staff. As a result, you can reach the goal rapidly. However, it is essential to employ an expert for this reason. You can reach out to hospitality consultants Abu Dhabi to surpass the break-even point.
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Go Beyond the Break-Even Point Now
Earning profit in a restaurant revolves around exceeding the break-even point. You can do so by optimizing menu pricing, reducing food wastage, and offering a seasonal menu. Contacting an experienced restaurant consultant is also essential to go beyond the break-even point.
