P&L assistance

Question: 

What are the national averages, in percentages, for a successful restaurant concept’s P&L in the 175-seat, casual eatery category?

Answer: 

Benchmarks can be useful. Keep in mind, however, that they are tools to help you in analysis and management rather than some sort of preordained standard. You need to keep in mind the unique financial situation of your operation. For example, if you are in a major metropolitan area, rent will be expensive; other restaurants may own their real estate. Minimum wage or tip credit law, your menu mix, deals with suppliers or purchasing groups and your staffing structure will determine your expense ratios.

That said, benchmarks are available from restaurant associations and research and consulting firms. They usually have some differences due to different methods of collecting the data. Baker Tilly’s Restaurant Benchmarks reports, as illustration, gives:

Prime Cost, 65% of Total Sales
Food Cost, 32% of Total Sales
Liquor Cost, 20% of Liquor Sales
Bottled Beer, 25% of Bottled Beer Sales
Draft Beer, 18% of Draft Beer Sales
Wine, 40% of Wine Sales
Soft Drinks, 15% of Soft Drink Sales
Payroll Cost, 30-35% of Total Sales
Management Salaries, 10% max of Total Sales
Hourly Employee Payroll, 20% of Total Sales
Employee Benefits, 20% of Payroll Costs
Rent, 6% or less of Total Sales
Occupancy, 10% or less of Total Sales

On the revenue side, to keep these expense percentages in line, look for at least $200 in sales per square foot to break even, and double that to be profitable, especially where expenses are high for the reasons we discussed.

Want to ask advice guy a question?

Refresh Type the characters you see in this picture. Type the characters you see in the picture; if you can't read them, submit the form and a new image will be generated. Not case sensitive.  Switch to audio verification.

Today's top stories

1
Not sleeping on a new shot at growth, Snooze, an A.M. Eatery , said it has landed an investment from private-equity firm Stripes Group. Details of the investment were not disclosed. The 17-unit...
2
After about 10 years of using on-site builds, Checker’s and Rally’s are diversifying their prototypes with new options, including a shipping container build. The sister chains recently announced the...
3
Welcome to the first edition of Fast , a newsletter serving the information needs of quick-service and fast-casual restaurants. The weekly publication is produced by the content team of Winsight...
4
After rousing confusion last week about when chain restaurants would be required to meet menu disclosure regulations, the Food and Drug Administration moved quickly on Friday to alleviate the anxiety...
5
He’s been there before, but Howard Schultz’s relinquishment of the CEO post at Starbucks could affect more this time around than merely the trajectory of the restaurant industry’s most disruptive...
6
McDonald’s has sold a 390-restaurant territory in Singapore and Malaysia to its licensees for markets in Saudi Arabia, creating a new power base within the chain. The buyers, Sheik Fahd and...
7
Starbucks CEO Howard Schultz will relinquish his duties as the coffee giant’s chief executive come April, at which time the chain’s COO, Kevin Johnson, will take up the post, Starbucks said today...
8
Your question is really threefold: Is it allowed for a restaurant to ask employees to pay the costs of errors? Should they? And, if they do, what should happen to the food? We touched on the first...
9
The Culver’s burger and frozen custard chain has named CFO Joseph Koss as its new CEO and president, effective Jan. 1. Koss, a 19-year veteran of the quick-service chain, fills the vacancy left by...
10
Gift card sales are expected to rebound moderately this holiday season after dropping off a cliff in 2015, with restaurants once again likely to be the major beneficiaries, according to the National...