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What makes a restaurant profitable? Interview with AMS Consultoría

What makes a restaurant profitable? Interview with AMS Consultoría

Merida Yucatan. January 7, 2021.- Profitability is the ability to generate a profit from an investment, and in the gastronomic sector it is a factor that differentiates gastronomic ventures and businesses that achieve success from those that fail in the face of the challenges of today's world.

In interview for Soft Restaurant®, Alejandro Martínez Santos, founder and director of AMS Consultoría -an agency with more than 20 years of experience in the restaurant industry-, shared the main aspects that influence the profitability of a gastronomic business, as well as the objectives of the Program to increase the profitability of your restaurant, a diploma course that will be offered online from January to March 2021 for investors, managers, brand representatives and restaurant managers in Mexico and Latin America.

Soft Restaurant (SR): What are the main factors involved in the success of a restaurant?

AMS Consulting (AMS): There are many factors that generate a successful concept: the product, the gastronomic proposal, the image and the comfort that we develop for our clients are examples of this, without forgetting, of course, an adequate sequence of service and an environment according to our concept and category. 

In Profitability Program We seek to analyze the elements that generate loyalty and, consequently, success for the restaurant, as we consider that each concept has in itself “differentiators” that we must take care of, since it is these that generate that we are chosen in a market full of options.

SR: How do you define a profitability objective and what steps are necessary to carry it out?

WSA: To define a profitability objective, it is important to know the business and have an administrative structure that allows us to achieve a balance between expected sales and projected costs and expenses (preferably before opening the business) in a document called Proforma Statement. 

In this way, the profitability in a restaurant is planned and structured, but, in order for it to be really reflected in the monthly results, it is necessary that the Manager or Administrator has the information of the budgets in a clear way, communicates them to his team work and supervise the correct use of resources maintaining the standards and control of the Cost of A and B, the Payroll Expense and the Variable Expenses to avoid cost overruns or important deviations.

"Ensuring profitability is an everyday job in which all departments and all collaborators are involved."


SR: What is the purpose of analyzing the sales potential of a restaurant?

WSA: When analyzing the sales potential we become aware of the limitations and factors that intervene in our sales achievements, therefore, by analyzing these factors we can improve or exponentially them in a strategic way to achieve better results by extending service hours, increasing the category or expand our capacity, for example. 

SR: What are the main steps to have good cost control?

WSA: There are many cost control models, however, it is important to know that all of them depend on a good recipe book and an adequate dynamics of purchase and storage of our products.

The cost of AyB is regulated by controlling and supervising the flow of the raw material from the moment of purchase until the moment we sell it converted into a dish or a drink.

SR: What elements make up a good analysis and report of the results?

WSA: The results reports can be many and as varied as the interest of the administrator, however, there are reports that must be considered almost obligatorily such as reports of sales, visits and average consumption of our customers, reports of displacement of products sold and product consumption and inventory reports. 

A monthly Income Statement must contain a summary of all the reports and controls that the administrator has kept under supervision during the period.

SR: What considerations are important for restaurant profitability in the face of Covid-19?

WSA: Operating a restaurant with the limitations imposed by service protocols during the pandemic, and achieving adequate profitability, is a significant challenge and certainly difficult to achieve. 

It is necessary to consider that the reduction in our capacity to 40 or 30 percent, plus the reduction of our service hours, directly affect our sales potential, and with sales reduced by more than 60 percent, each expense, each salary results very important. 

It is logical then that you are working with reduced templates and reduced menus to avoid unaffordable expenses or losses at this time. 

“I believe that today, more than ever, it is important to develop strategies that are accompanied by new sales models such as Delivery, or new services and promotions that allow us to reach the necessary sales levels to achieve, at least, a point of balance in which if profitability is not generated, large losses are not generated that could lead to the closing of the operation ".


SR: What is the importance of human resources in a restaurant?

WSA: A restaurant is not a catalog of equipment and furniture, nor is a written recipe book or a set of patterns and colors with an interesting name ... no, a restaurant is a group of people committed to a concept and a team personality that seeks achieve an economic goal. 

Human resources are extremely important and must be given adequate attention, selecting and training them to achieve success in the only way that can be achieved: As a team.

SR: What role does training play for restaurant leaders and work teams?

WSA: One of the biggest causes of failure in restaurant companies is the incorrect assignment of key positions to people who do not have the experience or passion to do it professionally, therefore, in the Profitability Program we use a good part of the first session to define the profile of the Operational Manager, who is the person who leads the general leadership of the restaurant, and two complete sessions to understand how to define a standard template and work teams for each department (kitchen, lounge, bar, etc.) to through the creation of profiles and workloads for each position. 

Knowing what is expected of them and what their main responsibilities are, is the first step in a comprehensive training because, as I have said before, the economic and financial objectives of the company can only be achieved through a solid and professional team. of people who know what to do and give their best effort to achieve it.

Program to increase the profitability of your restaurant

SR: What is the objective of the Program to increase the profitability of restaurants?

WSA: The main objective is to ensure that these leaders develop a greater understanding of the productivity standards of each of the departments that make up the restaurant and, through the design and development of improvement strategies for the operation of these departments, as well as a correct implementation of new models of control of existing resources, achieve a continuous improvement of the profitability projected for the business.

SR: What type of restaurant businesses are you targeting? 

WSA: More than just a type of restaurant, the Program is really aimed at people: those restaurant leaders who, due to the current market situation, or internal needs of their operation, urgently need to optimize their resources, generate a greater number of visits. or direct your work team towards meeting the economic objectives projected for the business, regardless of whether it is a taqueria, a cafeteria, a fast food or a high-specialty restaurant. 

"Entrepreneurs facing an opening project will get through this Profitability Program to start their business on the right foot, avoiding common mistakes in the development and planning of their payroll expense or in their A&B cost, for example."

SR: What areas or disciplines are part of this program?

WSA: It is actually a very complete program because, when it comes to designing a successful business, everything goes hand in hand: finance, human resources, gastronomy, administration, architectural design, hygienic management, accounting, etc.   

SR: What are some of the previous success stories with this program?

WSA: I have had the opportunity to work and implement this model of Management and Administrative Control for more than 15 years in endearing brands such as Pastelería Bondy in Polanco, Mi Gusto Es (group of which I was Operating Director for 10 years), Restaurante Culichioso, Pastelerías Dulce Rojo, Taquería Mi Gustaco, La Birrionda, Jochos Hit and Run, Heladerías Thrifty, Restaurante Portal Central, La CaNtrina, Pollerías Sir Pollo and Restaurante La Pitahaya Redonda in Culiacán, among others.

Do you want to implement this knowledge in your restaurant?

If you want to know first-hand the best strategies and methodologies to make your business operate at its maximum potential, we invite you to enroll in the Program to increase the profitability of your restaurant by clicking here below.

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