When I hear operators say this, I know they are not managing their businesses efficiently. On the other hand, I have some clients who are so dedicated to the financial end of the business they know how many covers are necessary to break-even. Some operators even know how many guests will order appetizers, desserts and bottles of wine. It is not hard to track and calculate the above information. However, if operators receive this information in a timely fashion, they will be able to quickly identify problem areas and respond accordingly.
Operators can recognize problem areas simply by reading the financial statements.
The Income Statement and Balance Sheet are the two types of financial statement reports that allow operators to pinpoint weaknesses and problem areas. The Income Statement and Balance Sheet should be prepared and reviewed monthly. It takes all restaurant expenses into account, from prepaid expenses to expenses paid in the future. Overall, theIncome Statement tells the operator if the business is making a profit. From there, the operator can begin making changes in policy and implementing strategies that will help the restaurant achieve its goals.