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Any Restaurants Make More Than 6% Profit?

post #1 of 6
Thread Starter 

Not talking about profit margins. 

Just want to know, after food, labor and everyone and everything gets paid, do any restaurants make more than 6% profit?

Thank you!

post #2 of 6
It really depends on how you look at "profit". For example, i have 2 food business at this time, 1 cafe/bakery and 1 lg kitchen where we do contract food for a private school and catering. I have a manageing partner at the cafe. Im there a couple times a week to consult and drink coffee and of course audit everything. After paying everyone there a above competive wage and myself a good salary from there plus an admin fee to my parent company, and my partner having a company car( nice one) our pelimary for year end there is 6.4% of witch my partner get a 35% cut and the asst get 7%. I get the other 58%. The taxman then swoops in and takes about 50%. Our sales are a bit over 5 million $ a year. This has been a good year for equipment and repair witch helps and sales were up 3 % since we had an excellent summer weather wise.

My large kitchen does more in sales per year but I pile on a lit of expenses onto it that take from the "profit". ie all travel, training, cars, trucks, insurances, marketing and such plus a salary for myself and my wife. This pelimary for the year end is 3.2%. Hence the tax man gets less.

Id love to get down to just breaking even.
post #3 of 6
Thread Starter 

Makes sense. Deductions are a good thing.

I'll be more specific:

I will pay myself $60K as chef (fairly typical for a small restaurant, I think). And I don't think I can justify a company car   or a trip to Europe to my accountant. In this scenario, what kind of midsized restaurant/food business might yield 6% or more?

And no I can't run a food truck...the weather's too nasty here.

post #4 of 6
be prepared to scale back hard on that 60k figure if you're pulling it out of thin air...
post #5 of 6
if you are just starting up be prepared to not only scale that 60k back but to put more money into it than you plan to, keep in mind that there are way more hands reaching into your pocket than you can plan for. Also that everyone else get paid before you do, the joys of ownership.
post #6 of 6
Wouldn't even count on a so-called salary in the first year. You're going to be sleeping in the office and eating stock if you're smart about it. There are aspects of running or more specifically owning an op that are wonderful, but I'd say boon to bane ratio is something like 1:4... Assuming you haven't owned or operated before, judging by the questions you are asking, you should also prepare for an extremely steep learning curve. Bone up on your handyman skills, bone up on your book keeping etc. etc. I was taught that if you are a sole owner operator you live and die by what kind of fat you can trim on a daily basis.
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