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Labor Cost.

post #1 of 17
Thread Starter 

Hello All. 

 

I am the chef at a hotel and conference center. The powers that be expect me to have a 10.5% labor cost. I have been pulling my hair out thinking if this is even possible? Does anyone else run labor cost that low?

post #2 of 17

It would depend on a lot of factors but that does seem pretty low to me.

"Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit." - Aristotle
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"Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit." - Aristotle
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post #3 of 17

@Ashliras,

Chef, time to put your business skills to work. If you're new ask for previous years income vs labor and see where you stand. So many bean counters in cubicles make these type of decisions without knowledge.

FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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post #4 of 17
sounds like they expect you to do alot of reheating prefabricated product. this is assuming you're pulling your hair out because your labour cost is at least double the target.
post #5 of 17

Banquets.  Banquets.

post #6 of 17

I would agree with the suggestion of getting last year's numbers... it might give you a guideline of what they have been doing to hit those numbers. Unless you are doing a ton of banquets and I mean a ton., 10.5% labor is really low. I'm curious to know what is in their dry storage, it must be full of IW products.

post #7 of 17

10 % almost seems impossible to me....good luck. I also second banquets.

post #8 of 17

Does that 10% include you?

post #9 of 17
1) is the hotel Union ? If it is the the owners want you to quit because there's no way in hell you're going to hit that number.

2) does that number include you and your sous chef? IIf so that's also not a fair number.

3) yes increasing revenue will alwayes lower your %'s, but i'm a believer that it's not the chefs job to drum up business but rather to create great food that I insurer repeat business. New business should be left to the person in charge of advertising and i'm promoting.

4) what's your food cost? Labor and food cost go hand-in-hand and back-and-forth. I'd rather "iinvest" in a good employee then out source prep and prepared product. But doing such things can lower your labor. Also note that "investing" in bad employees is a losing investment and will run up your labor and food cost. Getting rid of the trash. Is one of the first things I do when I take over a new place.

5) your a hotel right? Is breakfast of some sorts included and if so how is that accounted for, Hayden non-revenue generating busines will destroy labor and food cost. I know a lot of places that account for the food but not the labor. Their thought process is the same one that I have encountered regarding unprofitable lunches, "well you guys are in the kitchen getting ready anyway we might as well do the business". They don't understand that there's a difference in the level of crew and the amount of labor that you will have if you're open for business or not. So check if your breakfast and lunches are actually profitable, if they're not thats something to talk with the GM or owners about (or do something yourself about it if you have the power to)

6) how is the place cleaned at night? Keeping line cooks to clean after a shift is. Something that I have never found to be profitable. Also just haveing the dish washers do it doesn't seem to work well IMO. The line cooks get payed to much and are tired at the end of the shift to clean productively. The dishwashers usually still have at least an hour of "dishwashing" to do at the end of the night before they can even start cleaning. Two options, the first I'd to out sorce cleaning, this might be the "quickest" way for you to cut Labor cost because outsourced labor is usually not calculated into back of the house labor. However I have found the most effective means of cleaning is to have my own cleaning crew, meaning actual employees that's job is to clean. Is easier to track their productive labor hours, the place usually gets cleaner and the equipment usually winds up being better maintained. Also in ether case cleaning costs/hours are usually not calculated into kitchen labor but rather maintenance.
post #10 of 17
Thread Starter 

Thanks for all the replies. 

 

The hotel has only been open 1 year. The 10% does not include me and after looking at the budget they have, it isn't even 10% every month. Last month they projected 110k in f&b revenue and had 9,700$ for kitchen labor. We are open 15 hours a day. 365 days a year. 

 

I get $3.50 cpor for Continental, which seems to be pretty fair.

 

The hotel has a restaurant that does 0 business. I'm talking $8 - 10 k a month. We need to close for lunch in the restaurant, and actually we should just be a bar, the "restaurant" is a bunch of tables sitting right in the lobby, the ambiance is just .... absent. We are in an over saturated market, but the owners insist on being a full service restaurant. 

 

I'm just venting here, thanks for listening. Damn MBA's and their spreadsheets... 

post #11 of 17

Taking a stab in the dark here, but I am assuming you have a staff of around 6-8 with that number for labor... 

How much of that $110K is continental?

I am still trying to figure out how it is possible to run a 10.5% labor... 

post #12 of 17
Thread Starter 

Staff of 7, none of the 110k in the budget includes continental. The only way I could hope to get even close to 10.5% is if I changed everything to frozen pre-made product and put one cook and a dishwasher on each shift, which isn't going to happen. 

 

It is a bad budget, I just need to get the bean counters to see this. 

post #13 of 17

Chef,

I would on my own, separate out the restaurant from other sales. Figure the labor cost there and use it for ammunition in the future. just a thought. it seems like they are a numbers bunch

FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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post #14 of 17

Why should there be a labor cost if you do 0 breakfast and lunch. If there is no food served you should not have any labor.

Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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Chef EdB
Over 50 years in food service business 35 as Ex Chef. Specializing in Volume upscale Catering both on and off premise .(former Exec. Chef in the largest on premise caterer in US  with 17 Million Dollars per year annual volume). 
      Well versed in all facets of Continental Cuisine...

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post #15 of 17

Breakfast is continental but like chef says it's not included so that helps.

 

Looks like they expect you to run lunch and dinner then do banquets off the line.

post #16 of 17

@ChefEd,

I'm just assuming that you have to have a quasi staff if the restaurant is open. Prep, inventory, etc. They do get some customers, that requires staff.

FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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FOR YEARS I LIVED TO WORK! NOW I WORK TO LIVE!
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post #17 of 17

@Ashliras Wish you well when you taIk with them, I think we all have horror stories of trying to explain reasonable labor/food costs to those who have never stepped in a kitchen.

 

Will they allow you to change the menu, or are you stuck with whatever is there, I understand the ambiance can be an issue, but if you create and produce great food and service, that can be overlooked. Per the over saturation issue, if I were in that position, I would analyze what restaurants/styles are around you and create a menu that stands out from the others around you. There are always something that can do.. 

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