Check your status urgently! Is your shop in a "crisis"? With the P&L method
In a situation where many people feel bad, affecting sales not as targeted, entrepreneurs may think that the operating results will be negative and cause stress. Conversely, for stores where sales are still good, orders keep coming in. They may be happy and preparing to plan to expand the business. But what I want to tell everyone is that if any entrepreneur doesn't do a P&L, "loss" or "profit" will be just a feeling.Think for yourselfBecause in any type of business, numbers cannot be estimated by feeling.Especially in the restaurant business, making a P&L is very important and necessary becauseP&L can immediately tell us whether our current business situation is critical or thriving, so that we can plan for the future accordingly.Believe it or not, 50% (or more) of restaurant owners hate numbers, which leads to the problem of not reporting profit and loss, leaving restaurants with no idea of the health of their business.For example, selling well but not making a profit. Selling and making a profit but why does it seem like a loss? Therefore, let's understand how to make a profit and loss statement or what chain restaurants call a P&L.
Profit and Loss Statement (P&L)It is a measure of the results of doing business each month. That the sales we earn throughout the month, after deducting various expenses, is there any profit left? And more importantly than the word profit, if we open a restaurant in a rented place with a contract period, if we complete the contract period, will the invested money be returned in full and will there be any profit left? For anyone who has never made a profit and loss statement, this article will tell you how to do it. Let's start doing it together.
To make a P&L, the following information must be recorded each month:
Example of restaurant data recording
Sales: Income from all channels
Food cost: Food raw material cost + beverage cost + packaging. Normally, the cost in this section is around 30-35%.
Labor costs: Cost of permanent employees + Cost of temporary employees + Overtime wages + Various benefits. Normally, this expense is around 15-20%.
Administrative expensesThere is a fixed cost.For example, electricity bill + water bill + gas bill + various consumables + marketing bill + travel bill + etc. Normally, this expense will be around 5-10%.and variable costSuch as accounting fees + various taxes and others. Normally, this expense is around 5% or may not be available for small restaurants.
Rental cost of spaceNormally, the cost in this section is around 10-15%.
Net profit/lossNormally, you should have a profit of 10% or more.
Just by recording these expenses separately, it will be easier to analyze the health of our business. If the restaurant's expenses exceed the above recommendations, we will be able to plan to fix it appropriately. On the other hand, if we do not record the profit and loss statement until the end of the month, it turns out that there is a loss. We will not know which expenses are higher than the standard, causing us to not solve the problem at the right point and not be able to plug the leak. Let's look at an example: There is a restaurant that has been in business for 18 months and has made a profit every month, averaging 40,000 baht per month. When calculated, the accumulated profit is 720,000 baht.Which, at first glance, seems like a good thing, but when starting to make a profit and loss statement and analyzing the data, it was found that this restaurant had a lease term of 36 months and had invested 3 million baht. This shows that if this restaurant remains inactive, makes sales and manages expenses in the same way continuously until the contract expires, this restaurant will make a profit of 1,440,000 baht, which shows that operating this restaurant will lose money.1,560,000 baht, that's it.
When we realize that the profits we are making will not be enough to recoup the investment, the shop must have a plan to increase sales and analyze various costs.To find out which ones are beyond the standard values so that we can control them and increase our profits. You see, this is just one part of making a profit and loss statement.It also allows you to see the true health of your restaurant immediately, whether it is healthy, slightly sick, or in a crisis.Therefore, if any entrepreneurs are still neglecting to do P&L, especially recording various cost data in detail and separated into categories, please start doing it immediately. Especially during times when external factors are bad, we must turn back to focus on internal factors that we can control first.
Learn about simple profit and loss management.Both in terms of recording income - expenses, methods of filling in the store's information in the table, including precautions and things that are indispensable, along with profit and loss analysis to control costs and increase profits for your business.Free study, free registration, click now!Click here to read other articles.
