I invested a lot in opening the shop, put my heart and soul into it, but the results were not as expected. It was negative from the first month. What should I do? Should I give up or keep going?
We have a perspective to help you make decisions. If any restaurant owners are in a situation like this, hurry up and read it.
We have a perspective to help you make decisions. If any restaurant owners are in a situation like this, hurry up and read it.
For restaurant owners who have opened their restaurants in the first month, the results are not as expected. The numbers are negative. You start to feel uneasy.
I would like to say that if you have a goal, you will know what to do and how.
I would like to say that if you have a goal, you will know what to do and how.
In doing business, whether it is a restaurant or any other business, one important thing that entrepreneurs must know is the Break Even Point.
Whenever an entrepreneur knows the break-even point, he/she will have a sales target for each month, which will lead to a work plan to generate sales.
And you will know at each point in the month what the sales situation is at and what you need to do according to the plan.
Whenever an entrepreneur knows the break-even point, he/she will have a sales target for each month, which will lead to a work plan to generate sales.
And you will know at each point in the month what the sales situation is at and what you need to do according to the plan.
But the problem is that most SME restaurant operators “don’t know what their break-even point is.”
Therefore, if any entrepreneurs are wondering what to do next with their business, please answer the following 2 questions first.
Therefore, if any entrepreneurs are wondering what to do next with their business, please answer the following 2 questions first.
1. Do you know how much you need to sell in order to not lose money and make a profit?
Monthly sales target or projectsale come from Break Even Point or Break-even point Therefore, the first thing that restaurant operators need to know is the “ break-even point ”.
-Formula for finding the break-even point-
Fixed cost / (1-Varieble cost%)
Fixed costs / (1-variable costs)
Fixed Cost is a fixed cost that does not vary with sales. No matter how much or how little you sell, you still have to pay. These include employee wages (F/T), rental fees (in the case of fixed rates), depreciation, etc.
Varieble cost% is the cost that varies according to sales, such as employee wages (P/T), food raw material costs, water costs, electricity costs, gas costs, etc.
Example of calculating the break-even point of a coffee shop
Formula: Fixed cost / (1-Variable cost)
Break-even point = 58,700 / (1-0.41)
= 58,700 / 0.59 =99,491.53 baht/month
(rounded up to 100,000 baht)
This means that this shop must generate 100,000 baht/month in revenue to break even.
The break-even point is when you sell without losing money, you don't have to spend money, but you don't make a profit! Or income = expenses.
When you know the sales target that you need to break even each month, the next thing to do is to set a sales project target (Project Sale) with the break even point as the minimum target. Once you have a target, you will be able to plan to achieve the target sales. How much should you achieve at the beginning of the month? How much in the middle of the month? How much at the end of the month? And what should you do? For example, which menu items make a good profit and should you promote them? How should the staff who take orders promote them? Plain water has low profit, so promote herbal water or water that we make ourselves is more profitable. If the sales are still far from the target at the middle of the month, do you need to do any promotions? How do you find a way to increase the average per person? Push the snack menu more, add desserts as a supplement, etc.
“Break-even point” leads to “goals” and “work plans”.
2. What have you done and not done in the past month to increase sales?
In the past month, what kind of marketing has your store done, both offline and online? For example, offline marketing - a prominent sign in front of the store, so people know what you're selling, what's special, and whether you've done anything about it. Important places within a 5-kilometer radius - have you done anything to let people know whether your store is open or not? In the provinces, parade floats and female employees promoting sales - this is still offline marketing that has influence.
Online Marketing: Can your store be found on all major channels? Website, Facebook fanpage, Line OA, IG, Google My Business. Have you created content that is interesting and relevant to your customer group? Have you used the various Food Delivery apps? Are there any store reviews? Etc.
Many people, when sales are not as expected, start to feel anxious and discouraged, forgetting to review whether they have done their best in marketing or not. But what must not be forgotten in marketing is that the management system and quality of service of the store must be ready. It is not that if the marketing is done to the fullest, customers will encounter bad service, which will result in negative consequences.
In summary, if any restaurant business opens its shop in the first month or in the first 3 months, sales are negative and you are about to give up, please go back and review first how much you have done in the past. Normally, the business of restaurants in the beginning of the business has a chance of not being as good as it should be because customers may not know about it yet and there is no point to decide to try. Therefore, what entrepreneurs need to prepare is working capital for at least 3-6 months of business operations, which is the beginning of the business, the period of creating awareness for people to know. If the location is not bad and there is a clear target customer group, give the business some time by reviewing the 2 points mentioned in detail to see if there are any points that have been overlooked.
