Restaurants always say that but that's cus they don't include owner salaries & bonuses, high management salaries & bonuses, marketing, and expansion expenses.
From what I remember (i had a neighbor who was a former high level manager at a restaurant) they'll basically run at 3% profit to account for slow periods/off seasons but anything above that gets pumped into expansion to new locations or bonuses for people high up in the groups.
So if they made like a 3% profit margin + $1m they'll divide up that $1m into bonuses for people high up in the company.
I hope that makes sense.
Edit: also "business trips" to somewhere nice on the company dime where they just go eat and drink at a bunch of different restaurants.
Restaurants still deal with a lot of cash transactions, so a good portion of that can go right under the table or into the owner's pocket so legal cash remains under the restaurant. Losses can be juked easy too cause it's hard to verify what food is sold and what sits and goes bad. A lot also scam grants and shit to get started.
Yeah, aside from dry goods the price difference for bulk food isn't that great unless you have way more fridge/freezer space than any restaurant. You don't hit good bulk deals until you're like, grocery store level
Yeah, most small restaurants that last a couple years have owner that is making a pretty solid living off it and absolutely none were poor to start with. You have to be prepared to hemorrhage money for the first year or so if you want any hope. Regardless they don't deserve any sympathy. A capitalist who fails is still a capitalist.
I'm not sure, but I'd say they vary an awful lot. Like a "small restaurant" with 25 employees in the middle of a big city with enough starting capital to buy ingredients in bulk and the best equipment would probably make this kind of margin, but ones with 5 employees and little or no capital might be more around that.
Wtf, aren’t profit margins like 3 percent in restaurants?
Restaurants always say that but that's cus they don't include owner salaries & bonuses, high management salaries & bonuses, marketing, and expansion expenses.
Ah, with salaries/amortization true, but bonuses would be exactly profit margins I assume, or do they keep cash in restaurants name?
From what I remember (i had a neighbor who was a former high level manager at a restaurant) they'll basically run at 3% profit to account for slow periods/off seasons but anything above that gets pumped into expansion to new locations or bonuses for people high up in the groups.
So if they made like a 3% profit margin + $1m they'll divide up that $1m into bonuses for people high up in the company.
I hope that makes sense.
Edit: also "business trips" to somewhere nice on the company dime where they just go eat and drink at a bunch of different restaurants.
and it's deductible "market research" so it also lowers the company's tax bill
Restaurants still deal with a lot of cash transactions, so a good portion of that can go right under the table or into the owner's pocket so legal cash remains under the restaurant. Losses can be juked easy too cause it's hard to verify what food is sold and what sits and goes bad. A lot also scam grants and shit to get started.
If you put more profit on paper, you pay more in taxes. Of course they're going to operate such that their books come out to only a small margin.
Every small restaurant cooks the books fucking hard. Source: I've worked in small restaurants for a decade
Especially if you still have a significant amount of customers still paying cash.
Not like anyone was going to but I've had several owners make sure no one declared their tips come tax time
(For anyone who doesn't know, this lets the business report pay less in taxes, too.)
No restaurant profits are super high because all the food is bought in bulk
Yeah, aside from dry goods the price difference for bulk food isn't that great unless you have way more fridge/freezer space than any restaurant. You don't hit good bulk deals until you're like, grocery store level
Thread is full of people who don't know what they're talking about.
Yeah, most small restaurants that last a couple years have owner that is making a pretty solid living off it and absolutely none were poor to start with. You have to be prepared to hemorrhage money for the first year or so if you want any hope. Regardless they don't deserve any sympathy. A capitalist who fails is still a capitalist.
A capitalist who fails is someone who needs to GET A JOB, SLACKER :hahaha:
Without substracting costs I guess
Which is, by definition, not "profit."
You asking journalist to use the correct words for things? That's kinda delusional
lol no, I'm telling everyone else to stop taking precise meaning from headlines especially.
I'm not sure, but I'd say they vary an awful lot. Like a "small restaurant" with 25 employees in the middle of a big city with enough starting capital to buy ingredients in bulk and the best equipment would probably make this kind of margin, but ones with 5 employees and little or no capital might be more around that.
This is just gross sales and tips, not profit. Never, ever read a headline for literal, precise meaning.
https://www.wkyc.com/article/news/local/findlay-pizzeria-owner-gives-entire-day-of-profits-to-employees-to-show-his-appreciation/512-5fa193d2-b88a-44ea-9351-b61af44c35f8
That's what the owners will tell you.
Those poor, squeezed restaurant owners.