Taproom Contribution MarginsFeb 15, 2022
Contribution margin is the portion of every sales dollar that helps to offset fixed costs.
In other words, contribution margin is the number every 'restaurant owner' needs to know in order to achieve profitability in their business.
Let's consider a few examples, courtesy of Mark Meckler from Crafting a Strategy.
Say you offer chicken, steak and lobster menu items.
It's tempting to sell more of the chicken because of the sales volume and potential contribution to the bottom line.
However, when we examine the actual contribution margin, it's clear that the other food offerings (lobster, steak) provide more profitability.
Do the math, review your menu pricing, costs and contribution margins to get the ideal mix for your taproom food offerings.
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