Table of Contents
What should staff costs be in a restaurant?
For restaurants, 35\% is a generally accepted labour cost target. Fast food chains can achieve labour cost as low as 25\%, while table service restaurants most likely find themselves in the 30 to 40 percent range.
What are the expenses of running a restaurant?
Restaurant Operating Costs Breakdown
- Rent and utilities (electricity, water, internet, cable, and phone): 5\% – 10\% of revenue.
- Food cost: 25\% – 40\% of food sales.
- Labor cost: Roughly 30\% of revenue including management salaries of 10\%
- Insurance varies by provider and type.
- Monthly marketing costs.
What is the percentage of food cost in a restaurant?
between 28 and 35\%
To run a profitable restaurant, most owners and operators keep food costs between 28 and 35\% of revenue.
What is the average payroll cost for a restaurant?
What is a good restaurant payroll percentage? Chron reports that the average labor costs in the foodservice industry fall between 30-35\% of total revenue for the business.
How much money does a restaurant make?
On average, restaurant owners make between $30,000 and $155,000 a year. The restaurant size, type, location, and other factors impact the restaurant owner’s salary. For example, the owners of a high-end eatery in New York and a dive bar in Alabama will see very different salaries.
How much do restaurants profit?
As a general rule, one-third of a restaurant’s revenue is allocated to cost of goods sold, and another third to labor expenses. The remaining revenue must cover overhead expenses like utility bills and rent. Once all expenses are paid, restaurants are typically left with between only 2 and 6\% in net profit.
How do restaurants calculate food cost?
To calculate your food cost percentage, first add the value of your beginning inventory and your purchases, and subtract the value of your ending inventory from the total. Finally, divide the result into your total food sales.
To recap, here’s how to price menu items at your restaurant for financial success:
- Determine the cost per serving for all of the dishes on your restaurant’s menu.
- Calculate your current food cost percentage.
- Determine your ideal food cost percentage.
- Price menu items accordingly.