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Are my costs too high?

Ever wonder . . ."Is my labor cost too high?" "How much should I be spending on laundry and linen?" "Are my benefit costs in line?"

Wouldn't it be great if you could open a book and find the answers?

You can answer these questions — and many more — by comparing your restaurant to the industry standards published annually in the Restaurant Industry Operations Report from the National Restaurant Association (NRA).

Questionnaires from thousands of restaurants across the United States are collected each year by the NRA. They organize the information according to restaurant size, style and geographic area. The results are placed into a familiar format — the Income and Expense Statement.

The Restaurant Industry Operations Report can also show you the categories that are costing you the most. This is an easy way to prioritize and focus your energy. For example, if your Direct Operating Expenses are over the industry standard, what's going on? Are careless dishwashers breaking lots of china? Are stray knives, forks and spoons leaving in the laundry bag with the napkins? Are your supplies walking out the back door two by two?

To help make this comparison easier and more accurate, I recommend adopting the Uniform System of Accounts for Restaurants (USAR). The USAR provides a standardized chart of accounts and information on record keeping systems for restaurants. In addition, the USAR conforms to generally accepted accounting principles (GAAP). Once in place, you have the ability to compare your profit performance and cost ratios to industry standards... apples to apples.

For additional applications and reasons to use the Uniform System of Accounts for Restaurants, we've written a special report, available in our on-line store.

The Restaurant Industry Operations Report and the Uniform System of Accounts for Restaurants are the NRA's top selling publications. To place an order, call the National Restaurant Association at (800) 424-5156 or visit their web site at www.restaurant.org.

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