Anybody willing to share what kind of Food Cost and Labor numbers your running? I can’t get my hourly labor under 20% (of net sales) and by the time I add in salaried Manager and Taxes/Govmt stuff it’s hard to make a profit. Food cost is around 25%. We are a fast casual with limited menu of Pizza, Suns and Salads. Avg between $12k-$13k a week.
From reviewing financials of various businesses of late while looking to purchase a business, your issues could be
you product is not priced right (needs to be higher)
Your rent could be the culprit (should be around 10% of gross )
You are not doing enough volume or sales
Staff and processes are not efficiently optimized leading to over staffing
Curious, how much do you pay your manager?
Manager $32k, works 45-47hrs week. We charge $16 for an 18" Cheese Pie and $2 per topping… Thanks for the great feedback. Rent is actually 4.1%of gross. I believe training efficiency / sense of urgency is my biggest opportunity.
Mt food cost runs 30%ish depending on cheese prices and I’m running 33%ish all in for labor including payroll taxes and workers comp after subtracting mine and my wifes payroll. She’s the bookeeper and works 5 hours a week in the store and I work 40. While my food and labor percentage haven’t dropped as my sales have increased(higher paid employees), It’s a whole lot easier to pay the bills and make a profit with larger sales. This year I expect profit(including mine and my wifes payroll) of about 20%.
Do you feel staying open as late as you do puts upward pressure on your labor cost? We used to stay open till 1am back in the 90s. But we close as early as 10 now. We just couldn’t get the labor cost to work staying open late.
There’s no doubt that it does push labor up but it drives sales even outside those late night hours and it’s kind of what we are known for. It would be hard to change in this town. As our company expands, nearly all of the stores are open latest and they are all doing great revenue.
We’re about 70% delivery and our labor typically runs high 20s to low 30s including managers that run the store 2-3 days a week. For us, our labor is going down as our volume goes up and that’s with me working less hours as well.
What do you think “Gross Sales” and “Net Sales” actually are? There is some inconsistency out there in what people are referring to with these terms. To simplify, for me sales are just sales. How much did you actually sell your product and service for not including sales tax? It does not count coupons or discounts because they happen before the sale. That’s it.