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
Domino’s proved once again it’s dodging the sales slowdown hamstringing other restaurant operations, posting a 10.2% domestic same-store sales gain for the first quarter. The leap in sales follows a...
2
The Food and Drug Administration is pushing back enforcement of menu labeling requirements for chain restaurants and retailers from the scheduled start day of May 5, according to a group lobbying for...
3
Cash may still be king, but a huge asterisk is being slapped atop that truism as it applies to restaurants. The number of places looking to forgo currency and accept only cashless payments, and app-...
4
It is a commendable goal to look at performance metrics to make sure your employees are performing to their potential and have incentive to excel. On the surface, there is nothing preventing an...
5
Much like food trucks before them, food halls are the new go-to format for incubating a restaurant concept. Andrew Gruel knows this well. Gruel’s California-based fast-casual sustainable fish chain...
6
After revealing dramatic indications that a sales rebound is underway , Chipotle acknowledged more misfortune yesterday, warning customers that some personal information may have been swiped by...
7
Chipotle proved today its recovery drive is finding traction , posting a same-store sales gain of 17.8% for the first quarter of 2017 and an expansion of store-level operating margins to 17.7%,...
8
With more consumers expressing an interest in “free-from” foods and wanting to know the origin of their next meal, operators across segments are taking a more transparent approach to menu creation...
9
Consumers continue to show interest in clean, natural ingredients on restaurant menus. It’s easy to see why: Mandatory nutrition labeling for chain restaurant menus has pushed the idea of...
10
Burgers are a major part of foodservice business, with more than 50 billion served each year. That's why burgers, although highly popular, are an area that is ripe for innovation. Chefs who are...