Imagine a day in the life of a baker: You’re up before the sun to prepare the day’s dough, leaving enough time for proofing and baking before doors open to customers.
But when you’re finally ready to put the goods in the oven, you realize it won’t hold the correct temperature. You can’t just boost the baking temperature in the oven—that could cause the dough to burn or fall flat.
No matter what you do, you can’t get the oven to temp correctly. It means all of your prep work was for nothing that day—without that oven, you can’t bake. Without the baked goods, you have no reason to open your doors, losing an entire day of sales.
A commercial oven is just one of many restaurant assets that are crucial to the functioning of your restaurant, affecting your ability to generate revenue and profits.
Organized, efficient processes help protect restaurant assets—and, along with them, a restaurant’s bottom line. Here’s what you need to know.
What is a restaurant asset?
A restaurant asset is a valuable resource your restaurant owns or leases, from that commercial oven to social media posts. Those resources help your restaurant function and generate positive economic value or money.
Restaurant assets are reported on a balance sheet as either current or fixed assets. Let’s take a closer look at both.
Types of restaurant assets
The two most common types of assets for restaurants are:
- Current assets, also known as short-term or liquid assets, which owners can convert to cash within twelve months, and
- Fixed assets, also known as long-term or illiquid assets, that have a lifespan of longer than a year.
Current and fixed assets can be both tangible and intangible:
- Tangible assets are assets you can touch. They represent a restaurant’s worth: the more assets an owner has relative to liabilities like debt, the higher the worth. They also support restaurant operations and increase staff efficiency.
- Intangible assets are assets with zero physical properties. They’re still important because they help differentiate restaurants, setting them apart from the competition.
To put this into perspective, here are some examples of each asset type:
- Tangible current assets include inventory, merchandise, and cash.
- Intangible current assets may include franchise agreements and licenses for, say, alcohol sales.
- Tangible fixed assets include property, furniture, fixtures, equipment, and infrastructure.
- Intangible fixed assets include the restaurant’s brand, reputation, intellectual property rights, and proprietary software.
Why managing tangible restaurant assets is difficult
The challenges around managing tangible restaurant assets usually boil down to one thing: an inefficient process. Many restaurant operators use manual methods, like pen and paper. But this type of documentation can quickly get messy as more staff and more locations get involved.
Without a documented process, each team member may have a different way of tracking R&M: one manager might use Google Calendar for preventative maintenance reminders, while another jots down notes on Post-Its stuck throughout the back office.
When everyone has a different process for tracking assets, it becomes hard to keep track of equipment history—which can lead to unnecessary work and expenses. A GM could end up repeatedly calling the same vendor for the same equipment repair, as Jeff Gelwix, President of Pacific Drive-Ins dba Sonic Drive-Ins, discovered.
…And that’s assuming staff will even remember to document repairs in the first place!
These issues multiply the more restaurant locations a business owns or manages. With even more people, more equipment, and more repairs to track, R&M expenses can grow exponentially without the proper procedures in place.
Consider this: if just one restaurant location averages 2.83 vendor visits per week,
- Five locations can anticipate 14.15 vendor requests per week
- Ten locations can anticipate 28.3 vendor requests per week, and
- And twenty locations can anticipate 56.6 vendor requests per week!
But, managing restaurant assets doesn’t have to such a challenge.
How to manage tangible restaurant assets
Keep the value of tangible, fixed assets high and expenses in check with a proactive approach. Here’s what to do:
Commit to maintenance
Routine and preventative maintenance ensures equipment is properly cared for so the restaurant runs smoothly. Ultimately, maintenance reduces equipment downtime and helps operators avoid costly last-minute repairs.
Start your commitment to maintenance by taking an inventory of every tangible asset across all restaurant locations. This record should include the make, model, and serial number of every piece of equipment—it’ll help you better track R&M history and, when the time comes, give explicit guidance on which parts to procure when something needs to be replaced.
Document all R&M processes
Documenting equipment assets is just the beginning: you’ll need to define all routine and preventative maintenance needs for those assets, too! Routine maintenance includes daily to weekly tasks that can easily be done by staff in-house at the start or end of a shift; preventative maintenance is less frequent, but requires service from highly-trained technicians.
A restaurant’s R&M process should also include a warranty check any time a piece of equipment requires repair. If all equipment is already documented, this is easy to do and can potentially save the restaurant thousands of dollars. (It’s how a Noodles & Company location avoided spending $3,544 on a repair job.)
Know when to repair or replace equipment
Did you think your time in the restaurant industry would be spent on cost projections? You likely got into the industry because you love hospitality—and not because you’re a financial genius. So if you can’t crunch the numbers, a restaurant repair service like ours can help.
We analyze repair costs from thousands of vendor invoices to help our customers make more fiscally responsible financial decisions. It’s how we helped a Taco Mama location save $4,400: rather than spending time and money on additional repairs on equipment that was constantly breaking down, the numbers showed it was wiser to replace the equipment entirely.
Know when to lease or buy equipment
The restaurant industry is a high-pressure, low-margin business. To help expand the potential for profits, many restaurants choose to lease high-cost equipment like dishwashers and ice machines.
What’s the right decision for your restaurant?
You might want to lease a restaurant asset if:
- You have limited capital to make a big purchase
- You want to preserve cash flow for other areas of your restaurant
- You want to assume less risk, putting the responsibility of repair or replacement on the lessor.
You might want to buy a restaurant asset if:
- You want to own it outright, giving you control over how the asset is used
- You want the long-term cost savings that you can get over the asset’s lifetime.
Before you make a major decision about procuring an important tangible fixed asset for your restaurant, be sure to consult with your CFO, accountant, or financial advisor.
Managing tangible restaurant assets with ease
86 Repairs provides a standardized and efficient process for R&M management, offering multi-unit operators consistency, control, and visibility over the entire process.
When there’s an equipment or infrastructure issue, staff simply have to call, text, or email—and 86 does the rest, from troubleshooting to vendor dispatch to resolution.
Plus, when you partner with us, our team will visit all of your restaurant locations to document the details of every piece of equipment you have—so you don’t have to. We then track all repairs performed against that equipment and make it readily available online for easy asset tracking.
You also get access to a dedicated Account Manager who can dive into the data and make specific repair vs. replacement decisions, along with many other cost-saving suggestions to reduce R&M spend and keep the value of restaurant assets high.
Book a demo to learn more about our simple R&M solution used by thousands of restaurant operators across North America.