Calculating Return on Investment

Participating in The Restaurant Tour is an investment in your restaurant. And with every investment, there should be a return.

But how much does it actually deliver? In this article, we provide a simple calculation based on a fictional example.

We’ve used a few conservative assumptions to present a realistic picture of the return on investment.

1. Average hourly staff cost (including NI, pension, holiday pay): £16.50

2. Average price per kilo of ingredients for a Restaurant Tour dish: £17 (excluding VAT)

3. Average price of a bottle of wine: £6.50 (excluding VAT)

4. Average spend per cover: £65 (excluding VAT)

5. Average group size per booking: 2.5 covers

6. Number of attendees per Restaurant Tour event: 300

7. 20% of guests return to the restaurant within the following 12 months

8. A regular guest: visits the restaurant once per month

9. Average restaurant profit margin: 10%

The Investment

1. Staff: 60 staff hours × £16.50 = £990

2. Wine: 60 bottles × £6.50 (5 glasses per bottle) = £390

3. Dishes: 300 × 125g = 37.5 kg × £17 = £637.50

4. Extras (e.g. decor, entertainment, service touches): 30% of above = £603.75

5. Total: £990 + £390 + £637.50 + £603.75 = £2,621.25

6. Contribution from The Restaurant Tour: £2,181 (excluding VAT)

7. Net investment: £2,621.25 – £2,181 = £440.25

Revenue from Returning Guests

• 20% of 300 attendees return = 60 returning guests
• 60 guests × 2.5 covers × £65 spend = £9,750

Regular Guests

• 10% of returning guests become regulars = 6 guests
• Each regular visits 11 more times in the year
• 6 guests × 2.5 covers × £65 × 11 visits = £10,725

Totals

• Total revenue: £9,750 (returning) + £10,725 (regulars) = £20,475

• Net revenue: £20,475 – £440.25 = £20,034.75

• Profit (10% margin): £2,003.48

• Return on The Restaurant Tour: £2,003.48 / £440.25 = 455%