# What is the average Utilities Cost %

#### Integraoligist

##### New member
I read somewhere before that Utilities Cost % is around 20%, is that correct?

I am trying to figure out how much I pay in utilities per hour… so that I can figure out if I am making any \$ being open in the afternoon.

We average \$225 Gross Sales an afternoon
\$72.88 or about 34% goes to 2 workers (total of 4 workers as I do NOT count me and my wife in the pay %)
\$54.00 or 24% goes to Food Cost
\$15.75 or 7% goes to Sales tax.
Subtotal Net Income: \$82.37
-Utilities,but i donâ€™t know how much \$ i pay per hour so i can’t figure it out.

And continuing my rantâ€¦
I think weâ€™d save more money by just shutting down the afternoon and having me & my wife work on the night shift, which we would be able to send 2-3 employees home (which at minimum wage would be at least \$100 a day)

I donâ€™t know, all these #â€™s are confusing when your frustrated.

And yes i know more advertising for a lunch crowd is a good theory, but we’ve done that for years and never get a responce… all the business is at night.
ahhhh i dont know.
ahhhhhhhhhhhhh

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Integraoligist:
I am trying to figure out how much I pay in utilities per hour… so that I can figure out if I am making any \$ being open in the afternoon.
You’ll never figure out exactly what you would save by closing but heres a start. At my store my natural gas bill averages about \$410 per month. I figure about \$385 of that is my ovens and \$25 of it my water heater(just a guess). I’m assuming that if I closed for lunch, my water heater usage wouldn’t change enough for me to bother calculating. My ovens are on 540 hours a month, so they cost me about 71 cents per hour in natural gas to operate. If I turned my ovens on at 4PM instead of 10AM I would save just over \$4.26.

My electric bill in the winter is about \$1000 per month while using minimal A/C and around \$2000 per month in the summer when the A/C runs 24/7. Much of this electric will be used even if I never open. The walk in will run, the A/C will run, half of my lights are left on 24/7. Some of this electricity will be used for prep regardless if I open for lunch or not. Dough needs to made, cheese needs to be diced ect at some point in the day. I figure in the winter, \$500 would be considered “fixed” electrical usage and in the summer, \$1250 would be “fixed”. Using an average of \$625 per month in “variable” electricity I would save about \$7 per day in electricity if I opened 6 hours later. So at my store I would save just over \$11 per day on my utility bill if I closed for lunch and had my opening crew arrive at 4PM instead of 10AM.

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4 people for 225.00 in sales seems like too many people…

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the 4 people are:
Me - Delivery Driver/Cook/Phones
Wife - Cook
1 Bartender (which is seperate from the restaurant but creates minimum business and is alreaded added into the \$225)
1 Waitress/phone girl

We are already at the minimum amount of people to be open in the afternoon, so i can’t cut staff anymore… i’m just trying to make a 100% jutified reasoning that it is a smart thing to close the afternoon and just have us work the night shift while also cutting that staff.

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Work on increasing sales rather than lowering costs! It can be done. Start a lunch winner program. Menu drop all businesses.

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Integraoligist:
I read somewhere before that Utilities Cost % is around 20%, is that correct?
I hope nobody is really running a 20% utility cost! Did you mean 2%? That would be more realistic for gas and electric costs.

I’m in a similar situation to you - my lunch business at one location stinks - always has and probably always will. I have done every lunch marketing program you could think of, but it comes down to us just having a bad location for lunch.

But we have to prep sometime so why not be open for lunch and at least pay for the labor. The cook that is there for the slow lunches also completes 90% of the prep for dinner. If we closed for lunch I would still have to pay for those prep hours somewhere.

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We were in the same boat as the poster. Lunch sales were terrible while all of our business came from the night. We cut the hostess,one cook and the dishwasher from the equation but even after that with all the other bills we still weren’t cutting it. So we decided to change our hours through the week to 4,Fridays at 2 and weekends at 11. Someone comes in a hour before to do the prep work and I will usually do the dough then or at 8 when the rush dies down. This has seemed to work alot better for us.

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There is also the issue that if you and your wife are covering hours that are not very productive, you are not available for more productive hours or you burn out…Can you contract daytime deliveries to an outside service?..taxi?..courier?..etc…

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Utilities are not going to be the difference between whether it is worthwhile being open or not! First of all they do not vary much with whether you are open or not. The math laid out above looks pretty good to me. I can not see variable utilities being above \$10 per day for the day shift. The advice to focus on increasing sales during that period is good advice.

Integra: Without being there, it is hard to say for sure, but I really doubt you need 4 people during the period you describe. Your bartender can answer the phone and serve the food too if you are only doing a couple of hundred in sales during that period. Have folks order at the bar… or you can do it when not on a delivery run and the BT can cover when you are on the road… The delivery aspect is the thing that makes you need 3 people. I guess that without that you could do it all with just you and your wife for the afternoon.

We can do a \$400-\$500 dayshift (80% delivery) with 2 people and get the prep done too, but that is without a bar.

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Integraoligist:
the 4 people are:
Me - Delivery Driver/Cook/Phones
Wife - Cook
1 Bartender (which is seperate from the restaurant but creates minimum business and is alreaded added into the \$225)
1 Waitress/phone girl
Like others have mentioned you definitely have to drop at least one person in the afternoon.
I would suggest completely dropping the Waitress/phone girl position in the afternoon. Too slow to have someone waiting on people, just have your customers come up to the counter to order. Teach the bartender how to roll out dough and make a few pizzas.

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at our location the unit is split down the middle… half of the facility is a full-bar with 21+ only, the other half is a fast-food style setup so the bartender can not do anything besides work the bar. If we did not do deliveries I would be able to cut the front girl however somedays we get 1 delivery, others 15 (which would be the majority of the revenue) plus we’re in to small of an area for a carrier/taxi service to help out. thats to fancy for our area.

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Integraoligist:
we’re in to small of an area for a carrier/taxi service to help out. thats to fancy for our area.
Maybe you could find a retired person to be on call for deliveries during the day and pay them as a contractor by the delivery.

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us and the word “contractor” does not go together… we attempted something like that 4 years ago then got an employee audited by the IRS

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Integraoligist:
us and the word “contractor” does not go together… we attempted something like that 4 years ago then got an employee audited by the IRS
If you are using them as a true contractor there should be no problem. You call the delivery service and say I have a delivery that needs to leave here in 20 minutes. They are no different than calling UPS and saying I have a delivery to the whitehouse.

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One of the “tests” the IRS uses to determine contractor vs employee, is whether the person in question works for more than one employer. If you are the only one having him deliver for you, he’s an employee.

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I think you keep the staff like it is. Sure if it works in the afternoon cut some early…but I think if you are trying to raise sales you MUST and I mean MUST have 100% guest satisfaction. Every order…every time and if you already have a skeleton crew then cutting a whole person out is just an accident waiting to happen- sure enough the day you don’t have her is when you get 15 deliveries.

BUT you can bring them in later and have all the prep and things done. You can put her in charge of building sales by taking the slow period between 2-4 sending out lunch card winners post cards you have made yourself on the computer for less than a 3 cents. (Eventually everyone is a winner and all cards go back in bowl with a date they won.) Our gal then puts them in a book and I put them in our computer. Around xmas we send out a flyer about holiday parties and what kind of lunch we can do for them.

Put out a fishbowl and make a sign to drop your business card in to win a free lunch. We do a 10" pizza dine in only. The majority of winners bring at least one other guest. The majority will order a small lunch salad we offer. The majority will order a drink. If they have a GREAT lunch with GREAT service they will go back to work and tell at least one other person what a good experience it was. The majority of those will come in for lunch next week. If given great customer service they will continue to do so…You will also get a card from the guest that comes in and the whole circle starts all over again.

When we started the lunch winner program our lunches were less than 300. We now can do a 1500 Friday lunch as if it were 300. We are currently working on doing it for location #2 which like yours is off the beaten path. It takes time, balance and consistancy!

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I understand what your saying about the customer satisfaction being at 100% all the time… expecially in a small area like ours. It’s come to my attention that my night crew has been letting a few things “slide” and it just so happens TONIGHT i had to fire my main cook. So as i’m not able to work 14 hours days any longer i think the best situation is to close afternoons and open at 3-4 pm 7 days a week that way we can see every single thing going out of this place. Because we lost this cook tonight by my calculations we will break-even with losing the afternoon money and cutting the night staff to make way for me and the wife. I still do like your business card suggustion, I will be implementing that shortly for night as well.
Thanks!

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