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.
Thanks!
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From reviewing financials of various businesses of late while looking to purchase a business, your issues could be
[LIST=1]
[]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
[/LIST]
Curious, how much do you pay your manager?
Industry standard is around 33% labor with a manager and all related labor expenses. We are in a high labor cost area and run about 36 to 37%. We will be pushing 40% by 2019.
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We run about 31% labor with a manager and food (includes all supplies, paper etc) around 29%.
Sounds to me like your problem is not your food or labor unless that manager is making a ton of money.
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.
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Manager is making $32k. Maybe I just had higher expectations on profitability.
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Your numbers off of gross or net sales?
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Your numbers based off of gross or net sales?
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Net sales.
We have spent most of years running 30% labor and 35% food. Over the last few years we had to flip those because of increasing labor cost.
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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.
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Thank You. We close at 8 Mon-Fri…downtown location and no foot traffic after 8. We don’t offer delivery.
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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.
Compare against this below. You said your food is at 25%, rent at 4.1%, and 13000 in weekly revenues = 624000 annual revenue.
even if we have 40% wages, you still should make 100,000+. Is your labor more than 40%?
Income 624000
Cost of operating
Food Costs 156000 25.00%
Wages & Salaries 249600 40.00%
Gross 218400 35.00%
Expenses
Accounting 4103.22 0.66%
Advertising & Promotion 0 0.00%
Insurance 3711.84 0.59%
Interest & Bank Charges 15068.46 2.41%
Business & License Fee 310.86 0.05%
office 2395.14 0.38%
Repair & Maintenance 8147.04 1.31%
Rental (Lease) 29000 4.65%
Security 187.44 0.03%
Travel expenses 12.54 0.00%
Utility 9670.98 1.55%
Telephone 2424 0.39%
Total 75032 12.02%
Net income 143368 22.98%
Thank You so much for sharing this info…I will compare to my P&L and provide feedback!
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No issues. You got me wondering too how can you not be making money. I am curious to know the answer.
I’m hovering at around 29% Labor.
If your in the 55%-60% range for food cost & Labor you should be fine.
I’m curious to why your notprofitable. Check your expenses , then look for theft .
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Did you figure out the issue?
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.