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“Does one dollar of extra fixed costs needs one extra dollar of sales to recover it?” A logical answer is “one dollar“. What if I would tell you that this is not true? Let’s have a look!! What is Contribution Margin (CM)? Contribution Margin (CM) is highly used in menu …
What is the cost structure? Cost structure refers to the level of a restaurant’s fixed and variable expenses in relation to its sales. Fixed expenses are considered those expenses a restaurant will incur anyway regardless on the number of its guests. Variable expenses are those expenses that behave in a …
Owner Benefit: A Valuation Method for Small and Medium Size Hospitality Businesses You are the owner and manager of a small restaurant, hotel, spa or other hospitality operation and you are thinking of selling your business. But, now, you are facing several dilemmas. How much should I sell my business …