Having a Restaurant that doesn't break the bank
Restaurant Day is here again! Helsinki buzzes with an amazing energy when we’re all brought together to enjoy flavours from around the world.
Participating in the event is a wonderful experience but it can bring its own set of challenges. One recurring theme mentioned by many past participants is that they just don’t make enough money to cover the costs of the event; Leaving them to question whether or not to join again.
With a few simple steps, we’ll try to encourage more "one-day food-prenuers” to join in on the fun and cover the costs - or better yet, come out with a profit!
Step 1. Calculate your Break-Even Point:
The break-even point means that you make exactly as much money as you spent. In order to make this task a bit easier, keep all of your purchase receipts together.
Example: If your ingredients cost 200€ and you made 50 portions from those ingredients, your calculation would look something like this:
200€ / 50 = 4€
Your price per portion is 4€. Meaning, you would need to ask customers to pay 4€ for your product in order to break-even.
This calculation assumes that you’ll sell every single portion you’ve prepared.
During Restaurant Day, using whole number pricing might be a good idea. If you find that your calculations bring you to an uneven number (e.g. 3.74€), it’s probably easier on everyone if you round up your pricing to the nearest whole number (i.e. 4€)
Step 2. Calculate a Profit for Yourself:
On average, food products have a price increase of 2-3 times what it costs to make. However, at Restaurant Day, very few of us are registered businesses and we don’t have all of the associated costs that require us to increase our prices at such a high rate.
Of course, we’d all like to make a profit, but sometimes using good judgement on a price increase is enough to make everyone involved happy.
Example: Your product costs 4€ to prepare but you’d like to make 3€ profit from each portion. Your calculation would look something like this:
4€ (cost) + 3€ (wanted profit) = 7€ (asking price)
This calculation assumes that even if you don’t sell all of your prepared portions, you’ll be more likely to, at least, reach your break-even point. If you happen to sell out, then you’ve got the added bonus of a profit of 3€ per portion!
If you’d like to calculate how many portions you’d have to sell in order to break-even using your 7€ asking price, your calculation will look something like this:
200€ (cost of ingredients) / 7€ (asking price) = 28.57 portions or 29 full portions
Step 3. Calculate your cash before the event.
You’ll probably have a cash box for your collections during the day. You’ll need to have some money to start in order to give customers cash back. Be sure to know how much money you started out with so that you can subtract it from the earnings at the end of the day.
Example: Start your day with at least 10-15€ in coins and 10-15€ in small bills. This way, you’ll know that you should subtract 20-30€ from the day’s earnings.
Restaurant Day is a chance for everyone to share their favourite recipes and connect with others. It’s the exhausting kind of fun. Most of the participants are joining because cooking and baking is something they love to do in their free time. Food is their hobby. On Restaurant Day, with any luck, it’s a paid hobby.
Last time we wrote how to market yourself so that you and your pop-up will stand out from the “competition”, so make sure to check out that as well. We hope you all have a great event and we’ll see you at Ruttopuisto!