Restaurant/bar/events

[Davetheraver]

Right. Probably a stupid question that just highlights I should be trying to help this fella out, but I have a bit of experience doing business plans and have been asked to help out with this one.

Difference is I have always stuck to areas where I understand costs of sales, margins etc.

Rent, staff costs, utilities, insurance, ppl and prs etc are all easy. However, they guy is looking to open a bar/cafe/restaurant/events venue and I have NO IDEA what sort of gross margins you work to on food and drink?

Anyone able to help, without staying the obvious that he should already know this.

Thanks

[ymwoods]

My only experience of drink margins is from the retail side which is probably a lot lower than in a bar unless you guys are paying a shedload more for your stock.

Best way is to approach the suppliers you would use and get some prices off them and then work out what the size of the drink is (how many pints from a keg, how many shots from a spirit bottle etc) and look at what other local places are selling that size of drink for, adjust that depending on where you want to sit based on the type of bar you are going for and then work the margin from there.

[Leithen]

A lot depends on drink/food mix, market type etc.

70% GP might be expected. Higher food mix, more cocktails etc, higher GP. Bar snacks, cheap beer, lower GP.

[BoRED S2upid]

Having owned a bar that did live music every weekend the mark up on drinks is huge but unpredictable this was the biggest issue we had some bands would bring 100 fans with them combine that with regular punters who stayed to hear the band and you were over capacity and they couldn’t get to the bar to buy drinks! Then as soon as the band finishes 100 people leave! It’s a minefield. Good luck to him he’s going to need it.

[tim0409]

I’ve just asked my wife (she is the finance manager for a company that owns bars/restaurants); although there are obviously a number of variables, they operate on a cost of sales for food at 30% and drink cost of sales of 29-35% across the group.