Question

i need to write a paper about a theoretical firm in the fast casual dining restaurant industry. can someone help me come up with a few topics for the break even analysis, including variable costs, fixed costs, potential revenue and selling price. here is a quick little summary of my theoretical industry: A new up-and-coming Fast and Casual Dining/Restaurant being introduced in the Tampa Bay area is “Bay’s Fresh”. “Bay’s Fresh” specializes in serving customers with a delicious experience of food ranging between flatbread pizzas, salads, and soups. We offer gluten free and vegan options, as well as options for our meat-loving friends. This restaurant will be located in Tampa, Florida. We sell flatbread pizzas, salads, soups, smoothies, and lemonades (fountain drinks and water too). please help me come up with/think up ideas of a break even analysis, fixed costs and variable costs, potential revenue and selling price for my theoretical industry. thanks!!!

Answer 1

Determine Your Fixed Costs

Over the course of a month, your restaurant will have a number of fixed costs. Rent or mortgage, advertising, insurance, payroll, utility bills and taxes will be costs every restaurant has every month, with additional expenses varying from business to business. Add up all of these costs, and you'll get a figure that every single month, you will have to spend no matter what.

Calculating Variable Costs

For restaurants, the costs that vary are those associated with the food you sell. This includes your ingredients, paper products and any other consumables you need to buy. For existing businesses, this is easier than for new ones. Take the average sales per month and divide costs of those sales by the gross income of the sales, and you'll get a variable cost rate. For a new restaurant, you'll have to estimate the sales you expect.

Calculate

Subtract your variable cost from 1, and then divide your fixed costs by that result. This amount is your break-even point.

Use the Results

Now that you know how much you need to make, you can use the figure to calculate how many customers you need to bring in the door, or what kind of profits or cash flow you can expect based on your actual sales.

Sales forecast

• Your sales forecast sets the standards for your restaurant's expenses, profits, and growth. If you're unable to provide a well-thought-out forecast of your projected revenue of the first three years of operation, few investors are going to put any money into your business. Plus, calculating your financial projections helps you form realistic staffing and operational plans for your business. While creating a sales forecast and break-even analysis can sound difficult, with research and educated guessing, it can be simple and painless.
• In order to project your sales for the first three years, you have to estimate the amount of traffic your business will receive in a year, then determine your unit sales, and finally multiply them by the prices you will charge. This will equal your restaurant's overall revenue.
• Next, you have to subtract your restaurant's overhead costs, such as rent and utilities, and any ongoing costs from the overall revenue. If these projections leave you in the negatives, you need to reconsider your business's expenses and determine if you're overspending on supplies, undercharging for your food, or picking a location with rent that's too expensive.