08-19-2016, 06:34 AM
Well if the rent was $5000 in 2012 lets just guestimate and say it's $5500 in 2016. At $12.99 per buffet guest hey would need to sell about 425 buffet guests per month just to cover RENT, but then they would still need to come up with the money to pay for the food, labor, utilities, insurances, taxes, and payments on startup costs.
Food costs vary by restaurant type but based on my past experience working in restaurants, I'd estimate their food costs are 35% of the $12.99 price, maybe more if there are a lot of fresh ingredients (which I'm guessing there is due to being a bland Asian restaurant), but maybe there are a lot of cheap noodles and other fillers so lets stick with 35%. Labor is usually about 25% though we don't know if its family run, a lot of people might not be getting paid anything but guessing 25%. That takes us up to 60% of the $12.99 price just on food and labor. I can't even guess utilities, insurances, banking / credit card fees, taxes, repayment on startup costs, etc but lets be conservative and say 20%.
So from each $12.99 guest 80% or about $10.40 goes to operating costs so they clear $2.60 per guest and they still have to pay rent. So they have to sell 2,115 buffet tickets, or 70 per day to break even. Even if the percentages used in the guestimate are way off, adjusting the 70 figure by 10 or even 20 wouldn't effect the outcome.
Based on the reviews I've seen they are probably getting few return customers so it doesn't sound sustainable.
In most, maybe all the restaurants I worked in, the kitchens consistently lost money. Sometimes we would have 1 or 2 months per year where we broke even. Every time it looked like we were going to have a month in the black the fryer and dishwasher would break and need a partial rebuild or some other financial catastrophe happened. The profits were made on beverage / alcohol sales.
Food costs vary by restaurant type but based on my past experience working in restaurants, I'd estimate their food costs are 35% of the $12.99 price, maybe more if there are a lot of fresh ingredients (which I'm guessing there is due to being a bland Asian restaurant), but maybe there are a lot of cheap noodles and other fillers so lets stick with 35%. Labor is usually about 25% though we don't know if its family run, a lot of people might not be getting paid anything but guessing 25%. That takes us up to 60% of the $12.99 price just on food and labor. I can't even guess utilities, insurances, banking / credit card fees, taxes, repayment on startup costs, etc but lets be conservative and say 20%.
So from each $12.99 guest 80% or about $10.40 goes to operating costs so they clear $2.60 per guest and they still have to pay rent. So they have to sell 2,115 buffet tickets, or 70 per day to break even. Even if the percentages used in the guestimate are way off, adjusting the 70 figure by 10 or even 20 wouldn't effect the outcome.
Based on the reviews I've seen they are probably getting few return customers so it doesn't sound sustainable.
In most, maybe all the restaurants I worked in, the kitchens consistently lost money. Sometimes we would have 1 or 2 months per year where we broke even. Every time it looked like we were going to have a month in the black the fryer and dishwasher would break and need a partial rebuild or some other financial catastrophe happened. The profits were made on beverage / alcohol sales.