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Labor Cost help PLEASE???

post #1 of 22
Thread Starter 
I am in a full servise restaurant. I have been in this industry for 24 years and have been an Exec Chef for the past 14 of those years. We have been open for 9 month and have 975.000.00 in "TOTAL SALES" My food cost has been average of 20-22% not including my inventory. If I were to add 8-10% for inventory, and minus 2% for waste and trim...It would be at high end of 30%. My back of the house labor only is what I have a question about. I hear week after week for month now that we need to cut labor. Back of the house hourly labor plus my one salary Chef has been between average 13-14%. Is that to high??? I nor anyone else I have spoken with seems to think that is high at all! Maybe I'm getting to old for all of this and am losing concept...LOL? Can anyone help me answer this or offer advice please?
post #2 of 22
Depends on who you ask......

For just about every Chef, no it's not high at all, matter of fact it's a pretty super-human acomplishment.

Give the owner an inch and he wants a yard, give him 15% and he wants 12, give him 12 and he wants 10.

Stick to your guns
...."This whole reality thing is really not what I expected it would be"......
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...."This whole reality thing is really not what I expected it would be"......
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post #3 of 22
Good food cost, great labor cost, do your own P&L and see what the bottom line is.... They are trying to bleed you dry. Every buck you cut is a buck plus bennies and taxes in their pocket. Do what you need to do to run an efficient kitchen, cut back where you can................ChafBillyB
post #4 of 22
Very impressive cost factors all around. Is this a corporate owned chain type place ? If it is they are always trying to hit new numbers. If you have no complaints re food or service leave it alone and they should stop breaking your lamb chops.:chef:
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post #5 of 22
That is a good labour cost! Ours is sketchy.. I cut back last week and still our costs were crazy as we were slow all week... this industry is so unpredictable..
OK ... where am I going?.. and WHY am I in this handbasket??
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OK ... where am I going?.. and WHY am I in this handbasket??
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post #6 of 22
Thread Starter 
No, it is a privatly owed restaurant. The owner keeps on harpin on me that we are not making the $ he wants to see, and that "I" need to cut back labor in the back of the house. He wants my staff that is on hourly, and myself which is on salary to be at 350hrs. a week!!! We have only been open for 9 months and just about at 975,000.00 in "total sales" He dosent believe in the "FACT" that you will not make the $ profit in the first year to two that you are open. I hear about cutting labor every **** day! He is accually higher % in the front of the house. And he has only been in the restaurant biz for almost 4 years. The other restaurant beeing a sports bar and grill. Befor that he was a V.P. of a major automotive break corperation! I myself among others say that I am well justified to be running a 14-15% back of house thats including myself?
post #7 of 22
Thread Starter 
Thank you for your imput! I thought it might be time to cut out of the game and look into another line of work...LOL! I have been running ragged because of this "LABOR" issue. And I feel as well as everybody I've talked to, justifiable to be running these kinds of numbers. Especialy a 14-15% labor for back house that includes myself on salary. I just want some other Chef's out there to clairify to me and correct me if I was out of line running these %'s.
post #8 of 22
Thread Starter 
I've been stickin to my guns and telling him that there is nothing wrong with thaose %'s. That you cannot juice anymore out of me or the back of house. And he has to look at other factors to cut and save on! Thank you for freeing my mind...untill iI hear about labor again in a few days...LOL!
post #9 of 22
Thread Starter 
No, it is a privatly owed restaurant. The owner keeps on harpin on me that we are not making the $ he wants to see, and that "I" need to cut back labor in the back of the house. He wants my staff that is on hourly, and myself which is on salary to be at 350hrs. a week!!! We have only been open for 9 months and just about at 975,000.00 in "total sales" He dosent believe in the "FACT" that you will not make the $ profit in the first year to two that you are open. I hear about cutting labor every **** day! He is accually higher % in the front of the house. And he has only been in the restaurant biz for almost 4 years. The other restaurant beeing a sports bar and grill. Befor that he was a V.P. of a major automotive break corperation! I myself among others say that I am well justified to be running a 14-15% back of house thats including myself?
post #10 of 22
Wow, I can relate to your problem. Here are a couple of thoughts:

1) The owner is frustrated about his bottom line. He is there to make a buck, and every dollar he is out causes him grief.
2) You may be in line by food cost throughout the whole picture, but I am sure that the owner is focusing on COL against Revenue. Perhaps at this time, there is less revenue, and the owner is seeing that the kitchen is running on the same strength as back when your revenues were higher.
3) Your owner may not understand the base Cost of Business. Food cost is in line, Labour is in line, how about overhead?

See, P&L wise, it all comes back to the bottom line. If your 975K in sales only floats 2% to the bottom line, of course your owner is going to freak.

My council:

Determine what the absolute base cost to run the restaurant from the kitchen standpoint. Cut every little bit of fat that you have, then add back a touch. Then take that number to your owner and explain that if if cut futher than that, the service and quality will be comprimised. He will then risk losing it all.

He may balk, but if he is a good owner, he will understand that there is no fat left to cut, and that he needs to protect the base service to protect his bottom line.

Now, you mentioned that your food cost was low, and your labour was not too bad. Perhaps if the owner wants more cuts, the answer could be to simplify the menu.

These are just some thoughts. I know how you are feeling, I went through the exact same thing as you. Perservere, but also remember that it all goes to the bottom line. The owner is in the business to make money, and it is your job to work within your tools to make him money

Jason Sandeman

http://jasonsandeman.com

Developing Systems So You Can Cook

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Jason Sandeman

http://jasonsandeman.com

Developing Systems So You Can Cook

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post #11 of 22
A few points.

13-14% may be high depending on how the business is set up, but if you're a steak house, then that's pretty normal.

Looking at your numbers, and assuming you're in a mid-large sized city, it seems to me like you must run a 2-3 person line with one DMO and no prep cook. That's pretty small.

We're in the busy season now. Come January and you're doing 80 covers on a Monday night the boss will be asking you to cut even more! Believe it. It's gonna happen.

You can do it by covers per day. Say you do 100 covers a night. What do you think is a reasonable staffing for 100 covers? What do you think is reasonable then for the whole week?
post #12 of 22
Thread Starter 
Kuan,
We are located in Tucson. We are a large restaurant that seats 240. We are open for lunch at 11-4, dinner 4-1030 and a late nght menu from 1030-12. We serve anywhere from 200-400 people nightly and packed standing room only on weekends and game days. I run a three man line(1-prep, 2-cooks + myself) during the days. At night (1 dishwasher, 2 cooks and myself). On weekend days (2-prep, 2-cooks + myself) and weekend nights (2-dish 4-cooks + myself).
post #13 of 22
Tell the boss if sales increase labor will decrease. :D

So on the weekends you run 40 hours of labor (assuming 8 hour shift, 4 cooks + you) and serve 400 people. That's 10 covers per person per hour, and that's not counting DMO. Is that close?
post #14 of 22
It looks like if he had to replace you he would have to hire 3 people . Is he aware of that,
Also is everything in the place made scratch? :laser:

Sports bars are mostly fast food that is purchased prepped wings. burgers etc., and a far cry from full service dinner house.. Sports bar puts alcohol first then food and t.v. screens.you are the reverse of this type operation.:thumb:
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post #15 of 22
Thread Starter 
On a Friday and Saturday each, I run the entire staff of dish, prep, cooks and myself at 77hrs average for each of those nights. Thats my day and night staff total. We do on the average of 6,500.00 each night on the weekends. This past Friday night we did 8,000 :look:
post #16 of 22
Thread Starter 
He and everybody there is aware. I designed and built the kitchen, menu and layout. There is not one compatible person there. I had a Sous during the opening , my brother..but he past away a month after we opened.
Yes, we are a scratch kitchen. It is not your typical "sports bar and grill". We`are a "fine dining sports lounge" ranging from burgers, salads, sandwiches to gourmet pasta, steaks, lobster and many more specialty dishes. Not at all like you would imagine a "spoerts bar" to be like at all.
post #17 of 22
If you cut 4 cook hours out of that you'll reduce labor by up to 1/2 percentage point for that day. (I don't know how much you pay them and I assume you're salaried)

From a boss point of view, 77 hours to do 200 covers is not that efficient. You hate me now I know, but it's easy to hide the fat behind good sales.
post #18 of 22
Yeah-butt!!!!!

If 90% of the stuff is made from scratch, it's a very good labour cost.

Boss wants quantity and the Chef is putting out quality.
...."This whole reality thing is really not what I expected it would be"......
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...."This whole reality thing is really not what I expected it would be"......
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post #19 of 22
I know. The neverending argument! :)
post #20 of 22
My question is, How is your staff morale? could they(line cooks) handle more responsibility are there any real incentives to drop the slack and have some one else pick it up.
post #21 of 22
Thread Starter 
No...he wants both quantity, AND quality!
About 75% is made scratch. He had even talked about buying anything else that we are make from scratch to cut back on labor. I told him that there is nothing else to buy that is equal as ours, and they don't even make the rest of the items that are on our menu. And if I buy pre cut,sized or portined items, our food cost would go up. It does not out wiegh labor cost.
I think that I am totally justified to be running these percentages for food & labor. And with all of the comments and justifications that you all had so willingly took time for to verify that I am within well within my % range and even under. I will still continue to find ways to save on labor without hanging myself. But all in all, I feel 100% that I am in the right and golden with these figures.
Thank all of you for your helpfull information and sharing your knowledge on this issue. I just need to get this out to others to assure me that I was not losing my mind or grasp on labor/food.
I'm sure that I will be hearing about it still that it is to high!!! LOL
I am tired as **** now and am off to count sheep! THANK YOU ALL ONCE AGAIN!!!
I'll be in touch :thumb: :peace:
post #22 of 22
Well I am much impressed, but having those quantity and quality at once is quite a hard thing to save. Well good luck to you and continue impressing us with your style and how you manage everything. :peace:
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