Restaurant Finance: Control growth, track spend, avoid disaster | Kitchen CUT

With news today of distress in restaurant finance increasing by 143% in the last six months alone, it has never been more important to keep a tight rein on your F&B business.  Controlling growth and tracking spend are key factors in keeping your business on a steady route to success.  Here, John Wood talks about keeping growth on a steady, but controlled level…

The first half of 2018 has seen more businesses turn to the Company Voluntary Arrangement (CVA) to curtail losses. We’re not looking at small enterprises either, big names in the industry are struggling; Jamie’s Italian, better burger brand Byron, Carluccio’s and Prezzo have all triggered the CVA. 

Industry experts suggest that the restaurant sector is struggling as a result of several factors including oversaturation of the market. Rapid expansion is exciting, but it comes with a risk of growing too soon and reaching a point where supply has raced ahead of demand. Couple that with increased food prices, staff costs and business rates, and it’s easy to see how a restaurant finance may start to flounder.

Steady growth

Developing and expanding a successful business is an exciting time, however, this growth has to be exercised with caution.  Mobilising new sites needs to happen in a templated fashion, so that each site is monitored and regulated, controlling who they can order from, what they order, reviewing their spend versus sales, and tracking performance closely.  Once the sites are up and running it is imperative to properly analyse and understand customer demographics and profiles for each location.  In many cases, head office can seem far too isolated from the day-to-day problems thrown up at a particular location, especially when menus, information and promotions are shared.

Many groups are now looking at reviewing the previous “Cookie Cutter” approach to menus and having varied menus to suit the demographics of the clientele and ensuring that their offering is staying fresh, innovative and most importantly for many households financially competitive with the rest of the high street. This can be challenging with multiple sites and ensuring that they still have control over portions, recipes, specs is absolutely critical. Having a fully automated recipe and menu management system that is linked to your live supplier pricing, like Kitchen CUT, is a great way to manage this and gives complete transparency across the business.

Regaining control of restaurant finance

It is easy to get bogged down in admin and allow food costs to spiral out of control. To regain control of restaurant finance, you need to be constantly aware of sales data, and able to track dishes and know what works on a menu and what doesn’t. You need to price correctly and to see which dishes are performing the best, which need adapting and which should be dropped. Constant fluctuations in food prices mean that even standardised menus need to be regularly reviewed and this also applies to restaurant chains; just because you have a set menu it doesn’t mean you can cost once and rely on margins. By having live pricing links to all dishes and menus, it is then possible to make small tweaks and adjustments to these without having to make large sweeping changes to menu pricing. Many businesses struggle with maintaining margins and delivering good profits and with rising costs they turn to adding £/$/€ 0.50-1.00 on every main course or starter.  This is definitely not the answer when you are looking to grow customer loyalty and increase your amount of covers. Many customers will just walk to a competitor that charges less.

At Kitchen CUT we believe in a more structured and sensible approach to managing costs and price increases. We believe in helping you to work in partnership with your suppliers and agreeing on a sensible approach to deal with price increases and finding alternative products/cuts and negotiating better prices for bulk purchasing. Instead of letting 3 veg and fruit suppliers fight this out every week for your business, use 1/2/3 vegetable suppliers, but give all of them a decent share of your orders and in return they will give you better prices. Getting one supplier to drive to you for 2 bunches of chives is not good for them and they will find a way of getting that cost back somehow in the future! In this scenario, no one is a winner.


Menu Engineering 

Restaurant Management System | Kitchen CUT

As we have mentioned in previous blog posts, Menu Engineering is absolutely crucial to the growth of a successful business and ensuring you are selling the right dishes and drinks to maximise bottom line profit and keep restaurant finance under control. Many people believe that the answer to success lies in selling only the dishes/drinks that makes you the best GP % margins or selling the dish/drink that makes you the most cash. In fact, the answer lies in maintaining a healthy mix between the two. 

I ask many chefs when they last sat down in their own restaurant and when they last ate three courses in one sitting. By fully understanding what your guests’ experience, you can make sensible decisions about your dishes and how suitable the portion sizes are.

At Kitchen CUT we offer a fully automated report* that takes your sales data and identifies the best performing items on your menus. This then allows you regularly asses the performance of your menu and make the necessary tweaks to this to ensure you deliver a higher level of profit whilst keep your menu costs under control.

You don’t have to change any prices or products to make more profit, you just need to change your sales mix. Kitchen CUT’s restaurant management system provides this information daily so you can make sensible, calculated, financial decisions to improve your profit.

In these difficult and financially challenging times you need more than just luck and few spreadsheets to save you and ensure that you generate great profits. Our clients can see up to 6% variance by using our full P2P system in their business. Whether you are a single site or a multi-site/ multinational/ multi-currency and multi-language business Kitchen CUT can work for brilliantly, easily and safely.


You can get more information about Kitchen CUT by emailing or calling +44 (0) 330 113 0050

You can register for a free trial here





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