Restaurant Budgeting

Despite being one of the most important aspects of running a restaurant, budgeting is sometimes ignored. Sure, creating a yearly budget can be a little stressful, but it can also relieve a lot of stress. Using the three A’s of restaurant budgeting, you can come up with an effective budget that works for your business.


Assessment of Restaurant Budgeting

Restaurant-BudgetingThe first of three A’s of restaurant budgeting is assessment. During assessment, you will take a look at those things that directly and indirectly affect your restaurant’s current and future viability. Factors over the coming year that you should take into consideration include:

  • Competition
  • Sales generators
  • The Economy
  • Events That Might Drive or Diminish Sales
  • Repairs
  • Zoning Laws
  • Profit and Loss
  • Check Totals Average
  • Guest Counts
  • Employee Scheduling

Sizing up your restaurant’s competitors is pretty simple. Identify what businesses are competing with yours and then do a little research. How do your prices look by comparison? Are your portion sizes on par or better than your competition? Are they marketing aggressively? Do you need to do more marketing? What do customers like about these restaurants? Answering these questions will help you figure out how to get a competitive edge.

What local establishments are sales generators for your business? Local schools, businesses, industrial parks and apartment buildings are examples of places where there are a lot of people. This will help you identify where your sales are coming from and where strategic marketing can take place.

The local economy can make or break a business. That is why it is so important to know its state before you budget for the year. There is no sense in planning a big renovation or wide-scale marketing campaign if the local economy is in a downslide. You will want to budget in a way that takes the economy into account and keeps your restaurant in business. You will want to determine if your suppliers and utility companies are stable and will be consistently charging similar rates. Identify any increasing costs and determine how they will affect your budget.

Your profit and loss statements are going to give you the best idea of how your business is doing financially. Try to collect three or more from the year before. When determining projections for the next year, you will want to know how much sales have increased or decreased and how much costs have increased or decreased in percentages, dollar amounts or both.

You can average the monthly wages paid to get an idea of what you will be paying employees in the coming year. You will have to factor in raises and projected scheduling changes to get a realistic idea of what your employee budget should look like. Similarly, you should keep track of guest counts and check sizes all the time. This will let you spot any trends that could affect your budget, such as decrease in check size and guest count.


Action of Restaurant Budgeting

Now it is time to take everything you learned during your assessment and put it into action. The data you collected will allow you to come up with projected sales for every day of the year. For example, multiply the projected guest counts for Mondays by how many Mondays there will be in a given month. Do this for every day of the week and every month of the year. Total these projections to get your year’s projected sales.

Of course, how much you make is not the entire picture. You have to determine how much you will spend. If your assessment determined that food costs will remain relatively the same, you can use your data from the previous year to give you an idea of what the coming year will look like. However, you have to remember to account for rising prices and increased portion sizes, if applicable. You will determine payroll similarly, remembering to take into account changes in scheduling and employee raises.

Next, you will take a look at your rent, taxes, insurance and utilities. This is pretty straightforward. Using last year’s numbers and determining if there will be an increase in any of these costs will give you a solid estimate of what to expect in the coming year.

Finally, you can decide how much you want to incorporate in your restaurant budgeting for things like promotional events, music, entertainment, advertising, renovations and the like. You can determine this figure by using last year’s data and factoring any changes you deem necessary for the coming year, whether that is stricter budgeting or broader advertising.

All of this information will help you figure out profit before deprecation, which means simply subtracting deprecation from your profit total. That will give you the numbers you need to determine your income tax liability. Put all of your numbers into a budget worksheet and see how it matches up with your expectations for the year. This is where you can see any discrepancies and decide if you need to make changes in your controllable expenses.

Accountability of Restaurant Budgeting

Lastly, you are going to have to hold yourself accountable to your restaurant budgeting plan. Every month, compare your budget with the actual profits and costs. Come up with differences in dollar amounts and percentages. If the discrepancies are small, that is to be expected in the restaurant business. However, you will want to investigate bigger discrepancies and determine where the problem lies. For example, if appetizer sales are decreasing, you can run a special or a server incentive program. Your budget will guide you throughout the year.

How Ice & Refrigeration Systems Can Help With Your Restaurant Budgeting Plan

Our consulting team will review your needs and make recommendations for your restaurant kitchen. If you are looking to keep expenses down and get more restaurant equipment for at a cost-effective price, consider leasing. We offer some of the best leasing prices and the highest quality equipment.

Call us today for a free evaluation at 817-888-3057 or send us an email.

Commercial Restaurant Equipment – North Carolina

Your North Carolina Commercial Restaurant Equipment Resource

The competitive market for commercial restaurant equipment means that your North Carolina restaurant has many choices of types of equipment in all categories. The good news is that manufacturers are driven to develop more and more options for the kitchen as well as the front of the house. The bad news is – the choices can be very confusing!

One of the ways your restaurant can be efficient is getting specific equipment that gets the job done. Coolers are a great example of the variety of choices available: beverage cooler, bottle cooler, glass door cooler, reach in cooler and walk-in cooler. And when you can use a piece of equipment to encourage impulse purchases, you’ll see sales per head increase. Consider the possible effect on sales in addition to traffic flow when buying or leasing new equipment.

It’s beneficial to have a resource that asks the right questions to help you get everything you need. From the obvious commercial ice machines and ice bins to the less obvious differences between prep tables. Ice & Refrigeration Systems has a history and a track record of providing commercial restaurant equipment at the most competitive price.

That’s where the solution to the bad news comes in – Ice & Refrigeration Systems makes buying or leasing new restaurant equipment clear and easy. Ice & Refrigeration Systems offers unbiased, comprehensive, and budget-minded help in selecting restaurant equipment. Just a few of the manufacturers we represent are Kold Draft, Hoshizaki, ITV, Manitowoc, Scotsman, Accutemp, Atlas Metal, Hussman, Howard-McCray, Fogel, and Silver King. We carefully select our working relationships with manufacturers and guarantee the best price to customers. Free delivery is standard on all purchases or leases. Talk with us about your priorities and your North Carolina commercial restaurant equipment needs. Call Ice & Refrigeration Systems at 817-888-3056.

Leasing Kitchen Equipment – Fort Worth & Arlington

The difference in buying vs. leasing kitchen equipment is best. Many companies that I talk with in Fort Worth and Arlington have questions about buying vs. leasing kitchen equipment.

Here are 5 of the most common reasons that business owners and managers choose leasing kitchen equipment over buying:

  1. Preserves capital and retains financial flexibility. Commercial ice making machines are a significant investment. Leasing provides an ‘easy –in’ to get the equipment you need without a large down payment.
  2. Keeps credit lines available. Financially, a lease is separate from your banking relationship, so leasing an ice machine doesn’t affect your amount of borrowing availability.
  3. Provides a tax deduction. Lease payments are typically treated as business expenses, which in essence reduces the final cost of your ice maker lease.
  4. Finalizing a lease is usually easier than purchasing equipment. You have flexible terms and options that make leasing an easier process than buying.
  5. Allows freedom from outdated equipment. When you lease, you are not tied to one technology for the entire life of the machine. As your business grows or changes, you can make changes at the end of your lease term that let you adapt to food and drink trends with your commercial ice machine.

Here’s a great example:

Restaurant A bought a commercial ice maker 5 years ago. There are 10 to even 15 years of life left on the machine. But now, smoothies are becoming very popular, and the manager would really like to add the product to the menu. The ice maker isn’t a good fit for the volume required, but the original investment is not yet depreciated.

Restaurant B, however, leased a commercial ice maker and is nearing the end of the lease. Restaurant B is excited about leasing a new machine that offers more volume capacity for additional menu items.

Be sure and talk with your tax advisor or CPA before you make a final decision concerning leasing a commercial ice machine. He or she can guide you to the best situation for your business based on your specific needs, time frames and cash flow.

lease kitchen equipment

Selecting A Quality Commercial Ice Machine

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When researching commercial ice machines, it may become a decision that you’ll live with for up to 10 or more years. So, when you consider which one is best for your business or organization, be sure to compare the fine print.

Air-cooled Commercial Ice Machines

Air-cooled ice makers have a fan on the inside that takes air and blows it across the condenser. In essence, the ambient air, or surrounding air around the ice maker, cools the ice maker. Hot air blows out the other side of the condenser, so heat is pulled away from the machine. To understand the capacity of an air-cooled ice maker, know that ice pounds per hour are measured in a 70 degree room, compared to a more typical 85 degree kitchen. So, if your kitchen area is 85 degrees, you’ll get about 85% of the stated production capacity. Despite the heat emission, air-cooled are the most popular ice makers.

Liquid-cooled commercial ice machines

Liquid-cooled are best when the ice maker is located in a warm temperature area, such as over 90 degrees. To cool the ice, a stream of water goes over the refrigerant and extracts out the heat. The downside of a liquid-cooled machine is that your water bills will inevitably increase. These machines are not recommended for high-drought areas.

Remote-cooled commercial ice machines

A remote-cooled ice machine puts a condenser on the roof of your building. Advantages of remote-cooled are that hot air doesn’t blow into the kitchen (like an air-cooled machine), and the machine doesn’t require extra water (like liquid-cooled). Remote-cooled ice makers will need electricity to the roof, and you need to purchase an additional condenser, so installation costs increase. Remote-cooled ice makers are especially good when you have a need for a large quantity of ice.

 

Below is our list of considerations when reviewing commercial ice machines:

  • Warranty – Kold-Draft offers a generous five-year warranty on parts and labor for all of their commercial ice machines, ice bins, ice crushers and ice dispensers.
  • Water-filter – Sometimes adding a water filter will extend the warranty on parts such as an evaporator.
  • Energy-efficiency – Compare the energy efficiency of various machines to help you make a decision that has impact beyond the cost of the ice maker itself.
  • Water-level controls – Find out how the ice is harvested to compare water needs that can make a significant difference in your water bill.
  • Manufacturer support – Some manufacturers offer online training – a benefit that is helpful when you have turnover of personnel that are responsible for the ice machine.
  • Ice storage – Balancing peak demands with everyday needs can be challenging. You need the ice, but don’t want a larger machine than is feasible for your business. Consider calculating one or more ice storage bins to handle high-volume times.
  • Finance options – Consider term of financing, interest rate, and depreciation for taxes. Remember that a purchase in 2012 is likely to qualify for a 50% deduction due to the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
  • Tax advantages for purchasing a new commercial ice machine –For ice makers purchased in 2012, the IRS will approve a 50% depreciation bonus, compared to the typical seven-year depreciation schedule. Ice makers must be new and used in your business for a year or more to qualify.
  • Maintenance and repair bills – Take a look at your history with your current ice maker. How long have you had it? How much do you spend on maintenance and repair each year? Does the repair time equate to downtime and unhappy customers or employees? And, the cost of replacing some parts may make it more advantageous to get a new machine.
  • Menu items or preferences that require ice – Make sure that your commercial ice maker keeps up the volume required by changing customer desires. When estimating number of pounds of ice needed per person, the quantity may be greater than you think. Look at a chart to determine the amount you currently need. You may also want to think about adding ice storage or ice bins.

Never forget that ‘the devil is in the details’ – and that holds true for selecting an ice machine. You will have many choices. Even narrowing the decision field with type of ice or volume needed will leave you with many options of manufacturers. Taking a hard look at the details that seem less significant can result in worthwhile savings over the life of  all your commercial ice machines.

Ice & Refrigeration Systems is an experienced and knowledgeable resource for choosing the commercial ice maker to fit the needs of your restaurant, church or office. For more information, call us at 817-888-3056.

Restaurant Auctions For Buying Commercial Kitchen Equipment

Restaurant auctions are often a first consideration when restaurants need additional equipment. Restaurant owners and managers who want to save money often think that buying used commercial kitchen equipment is similar to buying a used car – there is a good deal of depreciation in value when the new car drives off the lot. However, that may not be the whole story.

The Pros And Cons Of Buying Commercial Kitchen Equipment At A Restaurant Auction

Pros

  • If you know the restaurant selling the equipment, then you may know something about the condition of the equipment. Talk with the previous owners if possible before the restaurant auction.
  • Pricing is favorable for owning equipment that you can use at a reduced cost.
  • Better name brands may be more affordable for you than if you were buying new.
  • An inspection of the equipment by a knowledgeable person can give you the confidence you need to buy.

Cons

  • Short-term price breaks on used equipment may provide short-lived satisfaction if the used equipment you purchase needs chronic repair.
  • If you don’t know the restaurant or condition of the equipment, the reliability of the equipment is less certain.
  • Used electrical equipment is considered especially risky because there are so many more parts than in gas equipment. More parts and wiring equal more things that can go wrong.
  • Older equipment is typically less energy efficient. Manufacturers focus on the energy efficiency of new products as one of the reasons to purchase.

Options For Purchasing Commercial Kitchen Equipment

Restaurant-AuctionsSince the biggest reason restauranteurs are attracted to used equipment is a favorable price, it’s a good idea to compare used with the cost of leasing new commercial kitchen equipment. As an alternative to auctions with unknown product histories, leasing new equipment gives the restaurant owner or manager greater confidence of reliability. Products typically carry a warranty for any repair work needed, and you get the energy efficiency that comes with new products.

Commercial Ice Makers: Quality Is The Priority For Good Ice

Types of IceYour commercial ice maker should deliver quality ice for absolute customer satisfaction. Commercial ice machines are different than the appliances that you see in homes. The means of dispensing ice, available accessories, and opportunity for energy savings provide choices in commercial ice machines.

How Commercial Ice Makers Work

Commercial ice makers are either water-cooled or air-cooled.
A water-cooled ice maker is typically more energy efficient, while air-cooled is more water-efficient. And, there are varying degrees of efficiency within each type. It’s difficult to say how much water efficiency you can gain with a new machine due to the following factors:

  • Type of water – hard vs. soft
  • Water filter – how much sediment is reduced to keep the water as clean as possible.
  • How much rinsing your machine needs – the more rinsing, the more water used.

Selecting The Right Ice Maker

Here are a few tips about ice making that can help you decide what type of machine is best for you and your business:

Melt times– the larger the cube, the slower the melt. So, if you offer drinks where you want to maintain the integrity of the drink for a long time, consider a large cube-making machine. Kold-Draft makes the largest cubes in the business. They’re sized to over an inch diameter. The difference is in the aircooled cube and condensing.

Volume – Estimating your current and future needs for amounts of ice production per day is important to getting the right machine that can grow with your business. The capacity you need, number of lbs per person, will determine which model you select. If your need for volume is not significant, you may want to consider an undercounter ice maker for saving space.

Customer preferences – If you know that your customers like to chew ice and like a crushed texture, you have several choices. Scotsman pioneered nugget ice and has a variety of nugget ice making machines to choose from. It’s the filtered water that makes commercial ice makers ice the purest quality, resulting in better taste. Whether one lb or 200 pounds, a high quality filter adds to the taste regardless of the shape. The taste of ice adds to enjoyment of food at restaurants.

Maintenance – All ice machines require maintenance, but the new Indigo™ line from Manitowoc takes communication to a new level. The machine lets you know when various tasks are required. The commercial ice machine functions are selfcontained and the information provided from the machine can reduce the number of repairs needed. If you read a review of Indigo ice maker commercial machines, you’re likely to see a lot of stars from the people who write the rating. Another one of the items to consider regarding maintenance is the exterior of the maker commercial ice. For example, stainless steel is the most efficient material for keeping clean.

Location – If you have space restraints, think creatively about moving food storage to the outdoor behind your restaurant. Many restaurants like the additional sq feet in a walkin refrigerator, and this allows more room in the kitchen for other items such as your commercial ice maker.

Types of Ice & Production

 

Flaker Ice – 73% Ice to Water Ratio. Typically shaved ice comes in the style of a snowflake and used for food displays. Daily production: 150 lbs and goes up to 2,600 lbs.

Nugget Ice – 90% Ice to Water Ratio. Softer, chewable ice that is compacted flaker ice. Daily production: Starts at 150 lbs daily.

Half-Diced Ice – 100% Ice to Water Ratio. Most popular ice and is used primarily for sodas. Size is generally 3/8” x 1 1/8” x 7/8”. Daily production: Ranges from 130 lbs to 3,300 lbs.

Diced Ice – 100% Ice to Water Ratio. Rhomboid-shaped. Size is generally 7/8” x 7/8” x 7/8”. Daily production: Ranges from 60 lbs
to 2,000 lbs.

Crushed Ice – 100% Ice to Water Ratio. These ice pieces are diced or half-diced crushed into smaller pieces and crushed into pellets. Daily production: Manually produced and can make up to 2,000 lbs.

Tubular Ice – 100% Ice to Water Ratio. Ammoiated freezing systems are used. Long, round with a hole in the center. Texture is softer and chewable texture. Daily production: 30 lbs to 184 lbs.

Gourmet Ice – 100% Ice to Water Ratio. Larger cubes that are hard and clear and can be octagon, round or square shaped and used with craft cocktails. Size is usually 1 1/4” x 1 1/4” x 1 1/4”. Daily machine:60 lbs to 1,000 lbs.

Ice Required Per Person

Business/application Type of ice Amount of ice per day
Restaurant cube 3 lbs./person
Fast food small cube 3 lbs./person
Banquet service (church events) cube or crushed 1 lb./person
Office cafeteria cube or crushed 3 lbs./seat6 lbs./seat
Large containers cube 4 lbs./gallon

 

To figure the ice another way, here’s how much ice it takes to fill a glass to three-fourths full with ice (the perfect amount to keep a drink cold):

 

Cup size Amount of cube
8 oz. 3 oz.
12 oz. 4 1/2 oz.
16 oz. 6 oz.
20 oz. 7 1/2 oz.

 

Getting a new ice making machine doesn’t have to be complicated or costly. You’ll want guidance from experts who make it a policy to save you money and help you make the best choices before you buy a commercial ice machine. Our history and relationships with manufacturers give you the best opportunity to get a machine that’s just right for your needs and budget. You can lease a new machine starting at $59/month that includes a water filtration system. And, Ice and Refrigeration Systems delivers for FREE! You can email us or call for more information – 817-888-3056. Be sure to visit our online commercial ice maker store!