![]() Triple Net LeaseĪ type of agreement where the lessee/renter is responsible for all costs associated with the asset leased, not just the rent fee. Order too far below par and you risk running out of food before your next scheduled delivery. Par is also often called the “build-to amount,” where you essentially build to par level when ordering inventory. The amount of any given item in your kitchen or front of house that you should maintain in inventory between deliveries. This term is NOT interchangeable with “margin.” Net ProfitĪlso known as “the bottom line,” net profit is the calculation of your total sales, minus operating expenses, wages, taxes, and all costs associated with your business in a given period. Or, stated as a percentage, the mark-up percentage is 42.9% (calculated by dividing the mark-up amount by the product cost). ![]() To use the preceding example, a mark-up of $30 from the $70 cost yields the $100 price. The amount by which the cost of a product is increased in order to derive the selling price is your mark-up. According to the National Restaurant Association, the average margin for restaurants nationwide is between 2 and 6 percent. Or, stated as a percentage, the margin percentage is 30% (calculated as the margin divided by sales). For example, if a product sells for $100 and costs $70 to manufacture, its margin is $30. Margin (also known as gross margin) is sales minus the cost of goods sold. It’s one meter businesses use to examine the success or failure of particular advertising campaigns, monitor business trends, and determine staffing needs per shift. Footfallįootfall is the number of people who frequent your restaurant in a given period of time. They can also sometimes be impacted by external forces, such as market shortages that drive up costs. Variable expenses fluctuate based on the volume of your business, including cost of ingredients, utilities, and overtime pay. Some common fixed expenses are rent, base salaries, and insurance. Fixed expenses are the same from week to week and month to month, regardless of how much profit or traffic you generate. Fixed Expense/Variable ExpenseĪll operating expenses fall into one of two categories: fixed and variable. Investment experts, loan officers, and merchant cash advance providers perform due diligence audits to confirm everything provided by the applicant or purchaser is true and supports the financial investment. In general, due diligence refers to the steps a reasonable person would take before entering into an agreement or purchase with another party, focusing on information necessary to make an informed decision. Concerted activity such as self-organizing into unions, collective bargaining, and social media discussion of non-proprietary information or working conditions are all legally protected against employer retaliation and employee dismissal. These are the types of activity employees can engage in that are protected by freedom of association and the National Labor Relations Act in the United States. ![]() One might amortize a particularly large purchase if the benefits of that product accrue significantly over time and not all at once. In business, this can refer to spreading payments out over an extended period of time (usually years) as with a loan or spreading the cost of a large asset out over a long period, as you would an expense in a budget. Amortizeīroadly, to amortize means to spread over a long period of time. Here are ten business terms defined that will help you navigate the waters of your restaurant’s financial success. It’s a big job for any owner, and if you don’t know the language, that job gets even more challenging. Every business - whether a restaurant, bar, or other food service entity - has the same basic need to track profit and loss, manage employees and wages, and control expenses. ![]()
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