Thinking of opening a restaurant part 6

Revenue Per Cover or RPC

Now you can have a gross profit of 99.9% on everything you sell but the truth is that 99.9% of nothing is nothing. So this is a little more complicated but I hope that at the end you will understand the idea behind RPCP

First you need to know how many covers you have, what your average menu price is, how long the average customer spends over a meal, and how long your service runs

You have 100 covers

Average price £20.00

Average time per customer 90 minutes

You are open from 11 am last orders are at 10pm or 11 hours or 660 minutes.

So divide the service time by the average customer time

660÷90=7.3

So 1 cover can have 7.3 customers on it in one day multiply that by 100

7.3×100=730

So you could do the maximum 730 covers a day multiply your cover by the average price of £20.00

£20×730=£14600.00

So you could take the maximum of £14600.00 a day. But this gives you a maximum.

Now you know but let’s look at a one week and see how a restaurant might be doing.

Total cover RPCP              % of covers

Monday 52 covers           Monday 7.1%

Tuesday 65 covers           Tuesday 8.9%

Wednesday  48 covers         Wednesday 6.5%

Thursday 68 covers           Thursday 9.3%

 Friday 125 covers           Friday 17.1%

Saturday 250 covers          Saturday 34.2%

Sunday 150 covers          Sunday 20.5%

If you look at that as percentages divide the actual cover by the maximum covers and divide by 100

52÷730×100=7.1

So on Monday you did 7.1% of your maximum potential. Then rest of the week looked like this

Now do the same with the takings, divide the actual takings by the maximum takings and divide by 100

£1,246.00÷£14660.00×100=8.5

So on Monday you took 8.5% of your maximum takings. Then rest of the week looked like this

              total takings                RPCP % takings

Monday £1,246.00              Monday 8.53

Tuesday £1,250.00             Tuesday 8.56

Wednesday £1,250.00            Wednesday 8.56

Thursday £1,297.00           Thursday 8.88

Friday £2,600.00             Friday 17.81

Saturday £4,998.00            Saturday 34.23

Sunday £3,500.00            Sunday23.97

And the percentages break down was as follows.            

Now everything biased on an average you can say that all the percentages should be the same but they are not , let’s take Monday

52÷730×100=7.1% covers

£1,246.00÷£14660.00×100=8.5% takings

You took more money than you should have so you performed finically better than you should have.

But if you take all the percentages and add them together and divided then by 7 you can see that on cover you are doing 14.8% of total covers but 15.7% on takings, so your sales are better than they should be for the number of cover.

Now you know this you can use this information for forecasting

Say at its very basic your over heads are as follows

Rent and rates £2,500.00

Heat light power £1,000.00

Insurance £250.00

Fixed wages £8,500.00

Total £12,250.00

Now you know this you can work out your breakeven point

£12,250.00 × 12 = £147,000.00 ÷365= £402.74÷£14660×100=2.75%

You have to do 2.75% to cover the bills, but what about food. well if you know that you are budgeting to have 30% food cost that need to sell the right amount of food to cover the bills so say the bills are 70% that means

£402.74÷70=£5.75 × 30=£172.60

So you need to sell £170.60 of food to make £402.74 so your breakeven point is £575.75

£575.75÷£14660×100=3.9%

Also using this method you can monitor if promotions boost sale short or long term. Build up the information and look for patterns, plan staffing and rotas, use the information to help you plan once you have the basic information the rest is just keeping on top of it.