Can someone tell me some averages here. 2nd restaurant is in it’s 8th month. Very affluent area with lots of competition. Summer here and gone and with a drop off of 50% in sales. I was reluctant to cut people with fear of a possible rush and did not want to tarnish my reputation. Of course everyone knows murphy’s law! Anyway I am a full service restaurant and I strive for a 25% food cost and 25 % Labor.My payroll is high because of my check. It hovered between 42 and 50 percent over the summer…obviously my payroll was the chunk of it. Should I calculate my payroll into the 25 percent or should I leave myself out of it. Is it possible to run a full service location on 25 percent payroll(including me)? I really need help here. Plus I run my percentages off of gross sales (is this correct). I have a great atmosphere, great food and great location. The area I live in is a median annual salary of $250,000 plus.
Yes, you run percentages off of gross sales (after discounts, NOT including sales tax) i.e. net $$ excluding sales tax.
I can’t run 25% food or labor where I am except in my high volume months. Year long average for me is about 29% on each. I run delivery rather than sit down though. If I could run at a flat sales level all year I could get those down a couple of points.
You should count yourself in the labor if you are laboring. i.e. if you are working the floor or the kitchen and would have to be replaced by someone else, you count yourself… but credit back the difference between what you take and what you would pay to have the work done.
If you are payinig yourself 40K to cook, you might add back 20K.
If you are taking a managment fee but not working the schedule there I would not count you in the labor. (I would ask why you are taking a wage though; in that scenario you should be taking s-corp dividends)