Category: Expenses
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Occupancy Expenses: The Fixed Cost That Defines Your Restaurant’s Risk Profile
Of all the expenses on a restaurant P&L, occupancy is the one you can do the least about once you have signed the lease. You can negotiate food prices, schedule labor more efficiently, and renegotiate vendor terms. Your rent is your rent. That inflexibility is what makes occupancy cost the…
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Repairs and Maintenance: The Restaurant Expense That Rewards Proactive Operators
In a restaurant P&L, repairs and maintenance is usually a small line item in good months and a punishing one in bad months. Equipment failures in a restaurant are not a question of if — they are a question of when, and the when almost never coincides with a convenient…
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Restaurant Labor Costs: Every Line Item You’re Paying For
Labor is the most complex expense on a restaurant P&L. It is also, for most operators, the largest — and the one with the most moving parts. Food cost is a single number. Labor is a system of overlapping costs that are easy to underestimate when you’re budgeting and easy…
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Understanding Commodity Costs: How Food Price Volatility Affects Your Restaurant
Restaurant food cost is not static. Even with perfect portioning, zero waste, and disciplined ordering, your food cost percentage will move — because the prices of the ingredients you buy move. Commodity costs, the underlying market prices for the proteins, produce, dairy, and grains that make up your menu, fluctuate…
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Fixed vs. Variable Expenses: How to Think About Your Restaurant’s Cost Structure
One of the most useful frameworks in restaurant financial management is also one of the most basic: the distinction between fixed expenses and variable expenses. It sounds like an accounting classification, and it is — but it is also a practical tool for understanding how your business performs under different…
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Labor Targets: Why You Need a Number Before the Week Starts
Managing labor in a restaurant without a target is like running a kitchen without a recipe. You might produce something edible, but you are unlikely to produce something consistent, cost-effective, and repeatable at scale. Labor targets — specific, pre-established benchmarks for what labor should cost in a given period —…