What Are the Different Types of Restaurant Start Up Costs?

The cost of the catering industry can be divided into three aspects of production, sales and service according to its business stage.

Catering industry costs

As production, sales, and service are unified in the selling price, in addition to the cost of raw materials (main ingredients, ingredients, spices) and

Catering costs, like other costs, can be classified by multiple criteria. food

1. Variable cost is significant ^[2]

Among the cost of the catering department, in addition to the catering products and beverages, the operating expenses also have some variable costs such as material consumption. These costs and expenses increase proportionally with the number of sales. This feature means that the discount on food prices cannot be as large as the customer price.

2. Significant controllable costs

Except for uncontrollable expenses such as depreciation, overhaul costs, and maintenance costs in operating costs, most other cost costs and the cost of catering materials are expenses that can be controlled by catering managers. The amount of these costs incurred is directly related to the management's control of the cost, and these costs and expenses account for a large proportion of operating income.

3 Cost leak

The cost leakage point refers to the link that may cause cost loss during the catering operation. The size of catering costs is greatly affected by business management. In menu planning-purchase-acceptance-storage-delivery-processing and matching-cooking-catering services-catering sales-sales control-cost accounting, etc., there are opportunities for cost leakage, that is, they may become cost leakage points . Its specific performance is:

(1) The menu plan and the pricing of the dishes influence the customers' choice of dishes and determine the cost rate of the dishes.

(2) The procurement and acceptance control of catering products and beverages is not strict, or the purchase price is too high and the quantity is too large, which will cause waste, and insufficient quantity will affect sales.

(3) The purchased raw materials cannot be stored in the warehouse in full amount. Poor quality of purchased raw materials will lead to increased costs.

(4) Poor storage and distribution control will cause raw material deterioration or theft to cause losses.

(5) Poor control of processing and cooking will affect the quality of catering products, and it will also increase the damage and loss of catering products and beverages. Poor planning of the quantity of processing and cooking will also cause waste.

(6) The catering service not only affects the customer's satisfaction, but also affects the customer's choice of high-priced dishes and thus affects the cost rate. The quality of catering sales not only affects revenue, but also affects the cost rate. For example, strengthening the sales of drinks at banquets will reduce the cost rate.

(7) The sales are not tightly controlled. The quantity of catering products sold does not match the standard income, which increases the cost ratio.

(8) If the company does not strengthen the cost accounting and analysis, it will relax the cost control of each link.

Inadequate control over any of the above links will result in cost leakage and increase the cost rate.