I love bars, I can not avoid. Son the best place to make a serious meeting. Pinwheel noise, Songs of dishes and glasses, saucepans drum emptying the coffee. Everything is harmony.
It is in these bars where I had the most important meetings where I learned more. In the year 92, about to open a hot dog cart had one of those revelatory meetings.
Disclosure of neutral
I would be calculated on a napkin my “Deadpoint”. "My point?”, I asked for. They explained that the term Deadpoint, breakeven O breakeven, net sales in the business neither gains nor loses; that is to say, when the business only covers all your expenses. This fact is very important, because if does not sell above this figure will have losses and selling above it will get benefits.
It can be expressed in units of product (stays, cutlery…), or in monetary units. further It can be calculated for the entire business both, As for service can be determined as the bar, banquets or any other.
Previously it is essential to know a number of concepts necessary for calculating this end, which are:
- Sales figure: the total amount of sales.
- Fixed costs: those who have the restaurant regardless of sales (rental, insurance, maintenance…)
- Variable costs: those based on sales, (commissions, food and drinks, etc…)
- units sold: is the amount sold, if expressed in units of product, is the amount of products sold, if expressed in monetary units, will match the amount of sales.
It is expressed as follows:
DEADPOINT ÷ = FIXED COSTS VARIABLE COSTS (Expressed in per 1)
The variable costs they should take account of exploitation or calculating:
VARIABLE COSTS / Sales Amount
Suppose I have in my restaurant a fixed cost of € 20,000 and variable costs compared to sales of a 40%, My deadlock will
Stalemate = 20.000 ÷ 1 – 0.40 = 33.333€
This means that, from € 33,333 sales I will start making money. It means that if I billed € 34,333 in that time period, I will have earned 1,000 €.
over my benefit will be:
1000Sales € more - 40% variable = benefit cost 600 €
We have previously mentioned that the deadlock could be expressed not only in monetary terms but also in product units (as stays, customers, etc…) I was dumbfounded, What I was talking about this man?
Y I saw my concrete example:
With this idea expressed previously and using calculating the deadlock we would do the viability of the business plan I wanted to ride, the shopping selling hotdogs.
I tell him that I plan to sell puppies at 1 €, that cost me € 0.50. I question whether we will have local or rent something and if I'm going to get a salary. I answer yes, I'll rent a stroller that costs me € 1,500 / month,(in the year 92 pesetas were ..., that we are old!!!) I'll have an assistant who charges 850 € / month and I would charge 2,000 € / month. And I wonder if it is profitable.
Deducing unit revenue from market research (marketing) and the cost of unit purchasing policy or production (operations). We have to:
((1€ (Unit revenue)- 0,5€ (UNIT COST))X NUMBER OF UNITS – 4.350€ = Profit
Equating to zero in order to set the number of dogs that have to sell a month to break even obtain that:
((1-0,5 )X Nº UDS) – 4.350=0 → Nº UDS= 4350 ÷ 0.5 = 8.700 dogs
That is to say, We had to sell 8.700 puppies a month.
Open every day we had to make an average of 290 dogs / day, some 36 puppies time, a puppy every two minutes… It did not seem such a good idea, and that it was clear: goodness! My marketing department (people counter) He told me that this was impossible.
I was always grateful that meeting because he saved my first wallop, finally we decided to mount a pub and start to form more seriously in hospitality management topics.
The breakeven theory applied to a restaurant
For a restaurant it would operate analogously. For example, Take the case of one who wants to find out the deadlock referred to the number customers:
I have a restaurant with an average price per customer from 30 €. I fixed costs 20,000 € / month and % variable cost 40%. We can reach the same amount in two ways:
- (30-12(40% VARIABLE COST)) X No. CUSTOMERS – 20.000→ NO CUSTOMERS – 20000 –> NUMBER OF CLIENTS = 2000 ÷ 18 = 1.111 customers
- 2000 ÷ 1 – 0.40 = 33.333 € 30 € which do = 1.111 customers.
From this calculation we conclude that we have a number of 1.111 customers in the period we have determined for, at least not lose money.
From this point it has seemed essential to make this calculation on all occasions.
At this stage I find it amazing that a restorer is not calculated monthly / weekly / daily / service / how much it costs per hour to open the shutter and what the sales target for each period, check whether it is achieving and otherwise put all the meat on the grill to get it.
By the way, I have still kept that napkin.