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Fixed costs of a restaurant: Know, master and reduce them

Fixed costs of a restaurant: Know them, master them and reduce them.

Knowing the fixed costs of a restaurant is indispensable for the correct management of your business.

These costs include important expenses for the restaurant that cannot be neglected.

In addition to the fixed costs of a restaurant, there are other types of costs that you should also be aware of as the person in charge of the business.

What each type of cost is about, what expenses they include and what actions will help you to reduce them.

Fixed costs of a restaurant: direct and indirect costs

Fixed costs of a restaurant: direct and indirect costs

The fixed costs of a restaurant are those expenses that must be incurred in order for the business to function properly.

The restaurant always has to bear these costs, regardless of the profits it has received or not received.

These fixed costs of a restaurant are classified into direct and indirect costs.

Indirect costs

What are the indirect costs of a restaurant?

Indirect costs are those that are not explicitly included in the purchase of the products needed to make each dish on your menu.

They include tax payments, administrative and financial expenses and the salaries of managers.

Sometimes they also include the payment of utilities such as electricity, internet or telephone.

Direct

These are the expenses incurred by the restaurant in order to be able to offer its services. Specifically, they are those that are generated from the purchase of products that you need to offer your products.

The direct fixed costs of a restaurant include raw materials, the payment of certain services and the labour to prepare the dishes.

Are all costs fixed?

Are all costs fixed?

Although there are fixed costs for a restaurant, they are not the only costs associated with your business.

Depending on the sales that occur in the business, they are divided into fixed or variable costs.

Fixed

The fixed costs of a restaurant are those that, despite the variable movement of sales, remain at the same level.

The rent of the establishment, the payment of salaries, labour, council taxes and staff training are some of the fixed costs.

Variables

As for the variable costs of a restaurant, they are those that change depending on the sales that the restaurant has, so they can be less or more than the first time.

Among the main variable costs of a restaurant are the purchase of raw materials, the payment of services and extra labour, necessary in case of events inside and outside the establishment.

Semi-fixed and semi-variable restaurant costs

Semi-fixed and semi-variable restaurant costs

In restaurants there are also expenses that are not included in the classification of fixed or variable, because they are part of both.

These expenses are known as the semi-fixed and semi-variable costs of a restaurant.

Semi-fixed costs

Semi-fixed costs have a part that does not vary with respect to the operation of the restaurant. We are talking about a minimum that is independent of how the activity varies.

Services such as water, energy and gas are semi-fixed costs of a restaurant.

Semi-variable costs

In this type of costs there are usually no variations, unless the restaurant exceeds the volume of its operation.

An example of a semi-variable cost in a restaurant is the hiring of extra staff, which is essential to serve customers when the establishment is fully booked and there are not enough wait staff to serve them.

This type of cost must be taken into account especially in holiday seasons: summer or traditional festivals.

Costs for the future and for the past

Costs for the future and the past

Historical and standard costs are tools that allow control over the restaurant’s finances inthe future.

Although they have different terms, the historical cut is taken into account to calculate the standard cut.

Let’s see to which case each one corresponds.

Historical

Historical costs allow you to project what the future of the restaurant’s finances will be like, based on current costs.

In order to estimate historical costs, administrative and financial expenses, profits and other relevant information contained in accounting books or invoices must be taken into account.

Standard

The standard costs of a restaurant are the costs that are expected to be incurred in the following months, quarters or semesters.

In order to establish the standard costs, it is necessary to have the historical costs, so that they are based on them and do not differ to a great extent.

How to reduce fixed costs in a restaurant?

¿Cómo reducir costes fijos de un restaurante?

The fixed costs of a restaurant, despite what you may think, can be reduced. Here are some tips on how to control and reduce them.

Narrow down your menu

A restaurant menu doesn’t need to have several pages of dishes and drinks to be the best

It is advisable that your restaurant menu contains a selection of dishes that are characterised by their quality and originality.

Take into account the dishes that are a sales success in the business, the ones that offer you the highest profitability and leave them on your menu.

Create and promote the use of technical cards

Create and fill in the technical cards for each dish that is part of the menu.

With the use of these data sheets for your dishes you could reduce fixed training costs, as everything will be properly documented.

Buy direct

Do not use the services of third parties to purchase the products, food and ingredients you need to prepare the dishes on your menu.

Buy direct from the supplier. This way you avoid paying commissions for the service and purchase management for you.

Take care of your suppliers

Have a harmonious and trusting relationship with every supplier in the restaurant. You should take care of them with the same intensity as you take care of your customers.

By having a good relationship with them, you will guarantee the quality raw materials that the restaurant needs, at affordable prices.

Take care of your inventory

Keep a daily control on the products that go in and out of stock in order to ensure that you always have the raw materials you need in the restaurant.

In this control you should manage the expiry dates of each product and the quantity used per day.

That way, you can contact the supplier when you really need it and not buy anything you don’t need.

On the other hand, this method is ideal to have control over the use of raw materials and avoid wasting them.

Compare yourself with your competition

Look at the offers of your competitors’ businesses and highlight how you differ from them . This will help you to make improvements in the restaurant’s service.

It is also an advantage when it comes to reaching agreements with suppliers to buy raw materials, showing the competition’s offers and obtaining discounts that benefit both parties in terms of prices.

Make digital marketing your greatest ally

Bet on digital marketing. It is the ideal partner to make your restaurant known.

To do this, think about strategies to advertise your restaurant on social networks, Internet search engines, advertisements on third party websites or through email marketing.

And what about social media ? Include them in your Digital Marketing actions

Improve the fixed costs of purchasing products for your restaurant

Improve the fixed costs of purchasing products for your restaurant

In addition to having a good supplier for the purchase of food to prepare food, you need one that has a tableware that improves the fixed costs of your restaurant.

In Monouso, our online shop, you will find a reliable supplier with quality products and efficient deliveries within a few days.

On our website you have at your disposal the necessary tableware and food containers with which to serve each dish on the menu, designed for customers to consume both inside and outside the establishment.

The best thing is that each product is available in sizes, colours, shapes and quantities that will adapt to your restaurant.

Visit us and discover the variety of products we have for your restaurant.

FAQ

What are the fixed costs of a restaurant?

We can distinguish between direct and indirect costs. The direct ones are those that the restaurant must face in order to be able to offer its services. Indirect costs are those that do not pertain exclusively to the purchase of the products needed to prepare the dishes on the menu.

What are semi-fixed costs?

They are those that are minimal, independent of the activity. For example, water, energy and gas.

How can I limit the fixed costs of my restaurant?

You can limit the fixed costs of a restaurant by limiting the menu, creating and promoting the use of technical cards, avoiding intermediaries, taking care of suppliers, taking care of the inventory and betting on marketing…

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