Labor percentage

[chefdg]

I'm struggling right now with my G.M. b/c i feel like the labor cost percentage he has set for the kitchen is too low and unreachable. He also believes that the kitchen labor percentage should be formulated from food sales and not overall sales. I'm the chef at a yacht club that is not very busy and is very seasonal. Are there any chef's out there working in a club like this that can give me an idea of their labor cost percentage goals?

[Franky2Times]

This is a very good question that begs for an expert answer. My humble experience is that small establishments, lets say under 5 million in F&B sales, require the Chef to budget the kitchen labor around 30% or less of food sales exclusively. Where food is the main attraction to a place, this doesn't make any sense to me. The last place I used to work, sales were consistent at around 50,000 a week, 20 to 28,000 being food. This is a place that didn't take any reservations and where people would wait at the bar up to 2 hours waiting for a table. Most of the liquor and beverage sales were directly related to food sales. In other words, without the appeal of the food, the place would have been another bar with burgers and wings. Now my budget for kitchen staff, including myself as exec, was about $7000 weekly. Try to manage a high-end kitchen doing 300 to 500 covers a night on that budget. I found it impossible and eventually quit (after finding myself washing floors at 1:30 a.m. because I could not afford a late dishwasher or porter). In bigger corporations or when the owner is not drawing a salary but is most likely a shareholder, my experience is that the kitchen labor is awarded between 20 up to 25% of TOTAL sales.

Feedback from experts, please??

[naes]

Check out my post on the concept called Prime Cost. Your two biggest controllable expenses are your food costs and your labor (and benefits) costs. You can't really look at one with looking at the other. As a general Rule of Thumb (ROT), you shouldn't exceed 65% of sales when you combine your food and labor costs. These calculations should include food and beverage sales.

As for the seasonality of your business, does your high season make up for your low season at the end of the year? You might need to take a loss during some quarters, but you should be able to make it up in others. I doubt the yacht club wants to lose money on the operation. Maybe your GM should set cost targets on a quarterly/seasonal basis instead of the same target all year round.

Good luck!

[andrewB]

I'm struggling right now with my G.M. b/c i feel like the labor cost percentage he has set for the kitchen is too low and unreachable.  He also believes that the kitchen labor percentage should be formulated from food sales and not overall sales.  I'm the chef at a yacht club that is not very busy and is very seasonal.  Are there any chef's out there working in a club like this that can give me an idea of their labor cost percentage goals?

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kitchen labor should come from food sales. i don't understand paying a waiter or manager from the salmon i sell nor do i understand paying a cook from selling liquor etc. i can maintain a yearly average of 15% labor costs and 35% food but only because i live in an area where labor is cheap and goods pricey. it should work as a quarterly or yearly average because not every month will you have the same sales, yet your labor costs are quite constant in the kitchen. the average allows months like december to make up for months like feburary...

[chefdg]

kitchen labor should come from food sales. i don't understand paying a waiter or manager from the salmon i sell nor do i understand paying a cook from selling liquor etc. i can maintain a yearly average of 15% labor costs and 35% food but only because i live in an area where labor is cheap and goods pricey. it should work as a quarterly or yearly average because not every month will you have the same sales, yet your labor costs are quite constant in the kitchen. the average allows months like december to make up for months like feburary...

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Do you include your salaried kitchen employees (chef, kitchen manager) in that percentage or is it just hourly employees?

[chefdg]

What about the idea that people will pair certain types of wine (sometimes expensive)and the waiter only has to cork and pour it. who gets that revenue? or if a waiter is really good at upselling food items, and bringing check averages up, where does that go? what about the dishwasher that comes out of kitchen labor but spends most of his time washing beverage glasses (when he is not pealing potatoes )?

[andrewB]

What about the idea that people will pair certain types of wine (sometimes expensive)and the waiter only has to cork and pour it.  who gets that revenue?  or if a waiter is really good at upselling food items, and bringing check averages up, where does that go?  what about the dishwasher that comes out of kitchen labor but spends most of his time washing beverage glasses (when he is not pealing potatoes )?

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wine is part of FOH sales and %

upsales benefit both the waiters and FOH if they pool tips and also helps the kitchen sales (we all like this)

dishwasher is that grey zone which is covered in our BOH costs...

[Risi e Bisi]

I have always reconized the kitchen labor as a percentage of total F&B sales, including all salary kitchen staff. Excluding Taxes, Benefits ETC.

Every operations budget is different, based on style, history, labor pool, and volumn. Seasonal restaurants are generally more chalenged than others.

I am fortunate to be able to push my staff out on paid vacations during the off season, which is not reflected in my labor report. Otherwise I am in the same boat as you.

That's why we get paid the big bucks.

Good luck

[Stevarino]

I also work for a private club.

%'s aside, the chef needs to run a clean & organized kitchen with enough staff to deliver a consistent quality product to the table in a timely manner. It is a mistake to set unrealistic expectations without first determining the minimum labor requirements for the periods of operation, and a strategy for menu selection and pricing to achieve financial success. The F&B manager should accept responsiblity in achieving the sales volume required to "use" the labor available and neccesary.

In my experience, the success will come from the banquet sales, not from the club sandwich.

Good Luck to all of us!