What’s Your Profit Margin?


If you asked your employees what they thought the average profit on the dollar is in the restaurant business, how do you think they’d reply? Typically, restaurant employees are under the impression that owners and operators are rolling in the dough, and that’s not always true. In fact, the average profit margin for a restaurant is between three and five cents on the dollar. Yep, that’s right – less than a nickel! There’s certainly a lot of success to be had in the restaurant industry, though, and it comes to operators who stay focused on two basic goals: 1) Increasing sales, and 2) decreasing costs.

Cost Control + Increased Sales = Higher Profit Margin

The formula for increasing profits looks simple but, as you probably already know, there are many moving parts. As a manager, you set the policies that can lead to cost control and higher sales, but it’s your employees who have the responsibility of implementation. Sales and service restaurant training can lead to higher sales. Similarly, cost control training will lead to lower costs.

No Train? No Gain!

The road to higher profit margins begins and ends with training. You can do everything else right – purchasing, receiving, staffing, menu pricing, and marketing – but it’s your employees who have the greatest effect on your profits. With effective restaurant training, your staff take advantage of more sales opportunities and avoid costly mistakes. Sales and service training leads to higher per-person check averages, improved customer loyalty, and bigger tips. Cost control training leads to less waste, fewer accidents, and better business. Your staff will make or break you.

A lot of operators complain that they don’t have the time or the money to spend on regular staff training.  Consider the cost of an untrained employee. An untrained busser will break more of your expensive glassware. A server without product knowledge training will have lower sales. A line cook not trained in portion control will over-pile every plate. Any employee without food safety training can get you shut down.

Restaurant Training

Effective training is a process, not an event. The Service & Sales Excellence Waitstaff Training Series is based on Service That Sells!, a restaurant training philosophy developed by restaurant owners for restaurant owners. Click here to learn more.

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