# Kitchen labor...



## cobes (Oct 31, 2013)

Here's the skinny.

I'm currently a sous chef at a "modern" steakhouse. Our prices are slightly cheaper than surrounding steakhouses. But not due to quality. We have to compete with establishments that have been around for years and we are babies (year old next week) we recently gained a new head chef and he is working wonders. Our food cost is sitting right over 35% and have had days were we ran 5.2% labor (a dishwasher did a no call no show.) I was notified today that he wants us to keep labor around 8 with 10% being a maximum. We have one head chef and two sous and a pastry chef on salary. We work over 70 hours a week and on certain days we only have one hourly employee on. We can seat about 150 and our check average is close to $80. This past year we did 1.7 million. 

There are about 20 other ways we can save money for the restaurant. They won't listen to us so that part doesn't matter. All that FOH stuff...

Does anyone else find this to be a low number? It's the lowest I've ever been asked to keep labor at. I'm curious as to what you guys are doing. Thank you.


----------



## beastmasterflex (Aug 14, 2013)

You should be able to afford quite a lot for $2800 a week at 8% or $3500 at 10%... and you have 4 salaried employees. Are you open for breakfast, lunch, and dinner?

This doesn't seem to add up how did losing 1 dishwasher bring you down to 5.2%. You must have been running around 6% with him, assuming you missed 40 hours of labor at ~$8-9 an hour. So they gave you a bigger budget.


----------



## chefedb (Apr 3, 2010)

At 70 hours "They are making money using  your back" Hope you are compansated well.


----------



## beastmasterflex (Aug 14, 2013)

Are salaried employees included in the 8-10%?


----------



## cobes (Oct 31, 2013)

Salary employees are not included. But since we have a pastry department all of our bread is in house. Including the burgerr buns we still loose money on.

I may have phrased things wrong. But we get stuck with some heavy work. Myself, personally, have managed 7 restaurants. All of which were profitable. We are only open for dinner but every nook and cranny is in house.... I apologivze for not being exact. It's late and I may or may not have had a drink at this point. If you would want to divulge deeper in my company message me...

But I promise you and your team doesn't produce like ours does. And if it does, please tell me what I need to do to be better...

I want a raise...


----------



## beastmasterflex (Aug 14, 2013)

I don't know what makes you think you have a better team than mine...making your own burger buns is usually highly profitable I save 90 percent.


----------



## cobes (Oct 31, 2013)

We loose money on the burgers. All steak trim and we sell them for 5 bucks during happy hour...

Either way I was just trying to see what you guys run. We are going to be slow tonight and I just sent two people home. 

And I'm not really compensated THAT well...


----------



## garball (Dec 9, 2012)

I worked a steakhouse that had a BOH labor goal of 6%;  an exec and two sous on salary not included.  Salaries were the work horses.  Line cooks showed up to work at service time to work their stations.  We sent them home as soon as business allowed.  Dishwashers were all staggered to have at least one on hand for final clean up.


----------



## petemccracken (Sep 18, 2008)

Interesting. So, to keep the labor % down, just put everyone on salary?

For me, "labor" is the total of ALL BOH personnel involved with food production, salaried, hourly, under the table, whatever, including ALL payroll associated expenses, FICA, FUTA, SDI, WC, Health, etc.. Otherwise, the labor percentage is a fictitious and meaningless number and cannot be used as a management tool to evaluate and compare.


----------



## garball (Dec 9, 2012)

Perhaps the reasoning behind it is that salaries are a fixed expense in the forecast/budget.  Controlling variable labor with business levels can tweak the bottom line a little


----------



## petemccracken (Sep 18, 2008)

garball said:


> Perhaps the reasoning behind it is that salaries are a fixed expense in the forecast/budget. Controlling variable labor with business levels can tweak the bottom line a little


Possibly, however, as a general rule for industry comparisons, one does not hide labor costs in the overhead /img/vbsmilies/smilies/eek.gif In my experience, the overhead (fixed) expenses are those that are independent of sales. I have difficulty understanding why one would pay personnel if there were no sales. That does not strike me as anything remotely resembling conventional cost accounting.

As I understand it, the generally accepted categories are: Profit = SALES - Food Cost (FC) - Labor - Overhead and the corresponding percentage guidelines are

Profit = 5%-10% of sales
Sales = 100%
Food cost = 25%-40%, generally in the 30%-33% range
Labor = 25%-40%, generally in the 25%-30% range
Overhead = 20%-50%, generally in the 30% range
If someone is using other than the generally accepted industry norms, then they need to clearly define the deviations.

Now, if using a specific ratio for a specific business for historical comparisons, there may be some value.


----------



## beastmasterflex (Aug 14, 2013)

It really just has to all add up in general

Considering salaries as fixed expenses depends on how you feel about your salary staff.


----------



## petemccracken (Sep 18, 2008)

beastmasterflex said:


> ...
> Considering salaries as fixed expenses depends on how you feel about your salary staff.


Respectfully disagree. How you account for your labor costs has little, if anything, to do with how you feel about them. It has everything to do with being able to accurately compare your operation with others in the business.

If one adopts a definition that is different from everyone else, then there can be no meaningful comparison.


----------



## garball (Dec 9, 2012)

Our operation ran like clockwork.  Our forecast was within hundreds every month.  The salaried employees were fixed because we knew each month exactly what each of us would make.  However, the three of us could not do everything, ergo, the hourlys.  If you knew what you were paying the salaries and what their output capabilities were, you can adjust hourly labor to compensate for business fluctuations.  That is where our labor goal was derived from.


----------



## petemccracken (Sep 18, 2008)

Ah, that explains quite a bit, especially as to why your "labor costs" appear to be 1/4 to 1/3 the industry guidelines.

If it works for you, wonderful.


----------

