Why is it important to separate your different REVENUE STREAMS?

June 16, 2022 Edition

Last month, I posted on LinkedIn that there is a way to know if your business is drowning – and that way is by getting very detailed on the different types of revenue streams for your food business!

In this month’s blog, I want to drill down a bit more than I did in that post (exclusive to you)

When recording your sales, first, you want to make sure that you break out your different income streams to make sure you know if one is profitable or not.

For example, track your sales from your breakfast, lunch or dinner service separately…..this includes separating your catering or take-out service, as well. This way you, you are ensuring that you can easily analyze if any of these services are making any money & if they are not for your bakery, restaurant, bar or cafe.

The reason why I recommend doing this is so you can pin-point on what is making you money and what is not making you money. After your bookkeeper/CPA does the following calculation, then you can have a chat with them about what can be done about the products & services that is making you money and what isn’t making you any.

Here is an example of what the calculation would look like:

From the above percentages, I can tell that there are lower than average sales in Coffee & Brunch Items. There is an opportunity to either run a campaign for those items, rethink about the pricing or can decide to not offer them if it’s costing too much to provide these items. By separating each revenue stream, we can tell what is making the business money. You can definitely put your efforts more into what is making more money and maybe run another campaign to try to bring more people in to purchase the items with the larger % of income. These are the types of things that will help my client know what needs to be done in their business to be profitable.

Thank you all for reading!