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Food Industry News® January 2022
foodindustrynews.com
Consider the Benefits of a Break-Even Analysis for Restaurant Owners Star Union Spirits Captures Essence of the Midwest
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Star Union Spirits, the artisanal, small-batch distillery in Peru, Ill., is excited to offer hand-crafted spirits that are locally made in the Illinois Valley. As consumer spending habits shift away from the white spirits to dark flavored liquids, Star Union Spirits is providing the American answer to the French staple in the form of New American Brandy in addition to its aged and un-aged spirits such as grappa, whiskey and even vodka. Co-founders Bob Windy, a Peru native, and business partner Jeff Yosowitz opened the company’s doors in the historic, Westclox factory building, which houses a tasting room and the distillery. When Windy and Yosowitz were looking for places for Star Union Spirits they were drawn to the building’s history and ties to the community. Sharing the same desire for producing quality and innovation, they began renovation and development of the area’s only distillery. They use use Midwestern fruits and grains as well as West Coast and South American grapes in their spirits, as well as employing a manually cranked crusher/ de-stemmer and an early 20th century wine press. In addition, Star Union uses clean limestone water from the Illinois Valley, where several breweries long ago figured out that the water made for great tasting mash bills. Tours are available by appointment, while the tasting room sells craft cocktails and bottles.
Dirk Ahlbeck, CPA National Restaurant Practice Lead, Apple Growth Partners
One method for proper forecasting is to calculate your restaurant’s break-even analysis. A break-even analysis is understanding how much of every dollar in sales above the break-even point should go to the bottom line at various sales levels above break even. A break-even analysis is a calculation of how much in sales a restaurant needs to cover all of its costs for a certain period of time. Consider it the amount of revenue necessary to cover the total fixed and variable expenses incurred within a specific period of time while operating your restaurant. The calculation can also be used to properly forecast year-end totals without knowing final sales numbers. The basic formula is: Breakeven sales = Total Fixed Costs/1-Variable Cost % Fixed costs are expenses that stay the same regardless of sale volume, such as rent. Variable costs are fluctuating expenses that reflect sales volumes, such as cost for food and beverages and labor. Mixed costs have a fixed and variable cost component, which should be considered fixed costs in the calculation. For best results, use a four-week or monthly profit and loss statement from three periods from the last 12 months to calculate break-even analysis. It should include your restaurant’s highest and lowest sales period to adequately calculate a middle of the road view. Owners should assume every expense category or cost that is not truly 100% variable in nature is fixed. For more information, go to applegrowth.com/ restaurants. See Apple Growth Partners’ ad on page 13 of this issue.
For the Bulletin Board: Server Tips
Courtesy of FOOD INDUSTRY NEWS
12/13/21 2:34 PM
