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DSR Financial
341 N Maitland Ave
S-205
Maitland, FL 32751
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Your restaurant’s labor costs are more than just employee wages. They’re comprised of the total dollar amount spent on labor across your operation. Here are all the components involved in calculating labor costs:
A healthy percentage of labor costs guideline varies by industry and your particular restaurant’s business model. Most restaurants aim for labor cost percentage somewhere between 25%-35% of sales, but that goal may vary by restaurant industry segment:
Knowing a number without understanding the big picture behind it can make it difficult to make improvements in the long-term. High labor costs can be the symptom of many different issues, and a quick fix of just cutting hours or paying low wages may only be a bandage on a deeper problem.
Your restaurant labor cost and labor percentage are two of the most essential business metrics to track, especially as minimum wages rise around the country. Labor is one of the biggest expenses for a restaurant. With the many moving pieces in a restaurant, labor costs are also always changing, requiring daily, weekly, and quarterly tracking and reporting. Understanding the story behind your labor cost is especially important as restaurant owners around the country address the repercussions of a rising minimum wage.
Labor cost is a significant part of your prime cost, a metric many restaurant owners use to analyze the efficiency of restaurant operations. Prime cost, made up of the total cost of goods sold (CoGS) and the total labor cost, represents most of the controllable expenses for a restaurant. Your prime cost, including your labor cost, is where you can improve to add more profit to your bottom line.
The methods for controlling restaurant labor costs vary by the type of restaurant. A quick service restaurant versus a full-service fine dining restaurant have different labor cost standards and require different approaches. As minimum wages rise around the country, location and locale also impact your restaurant labor cost. Knowing how to calculate labor cost percentage allows you to monitor this large expense and streamline your labor operations.
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More than 99% customer satisfaction is our success.
Dakota and DSR’s team helped me open my restaurant a little over 3 years ago. They understand the count down, time restraints and leadership it takes to accomplish that from all stages: building, opening, existing business and how to elevate and define your brand. They have been my TRUSTED partner and we would not be as successful as we are without their support and guidance. They are a REAL class act and a true team player, which is hard to find in the consulting field. Their delivery & response time of valuable instrumental reporting and guidance is second to none.
As a young and growing company, outsourcing our accounting needs to DSR was a great decision. She is helpful, organized, and very focused on providing us timely results. Dakota brings a lot of experience and as a result she was able to bring concerns to us at the same time helping create systems to increase efficiency.
DSR Financial has offered great insight into how we look at our business operations and financial strategy. Dakota and her team are professional, knowledgeable, organized, and consistent in approach. Their expertise has in turn given our store operators an additional resource for guidance so that we maintain a consistent approach across all of our locations. We consider DSR to be one of the most valuable members of our team and rely on them daily to help us accomplish the goals set before us.
DSR’s team changed our trajectory 180 degrees because of their knowledge and partnership in the restaurant industry & because of this partnership we are up over 100% in profitability! The knowledge from strategic planning, budgeting, procurement, marketing & branding, HR and operations gives us complete confidence in the stability of the ever-changing restaurant industry. The attention to detail, fine-tuning and changing our business culture in such a professional manner is Top Notch. I would HIGHLY recommend anyone opening a restaurant, has an existing restaurant running that is just making it or one that has all the pieces but cannot elevate because of the daily tasks as an independent this is exactly the COMPANY you are missing. Johnny’s has been thoroughly impressed since day one; they deliver more than what you ask for. A true partner and resource!
Francesco’s works with DSR on everyday financial needs, marketing, operational consulting and reporting. We also have worked on several projects and have found them to be instrumental in helping us create strategies surrounding expansion, menu guidance, management team training and growth & cost efficiencies. DSR remains a trusted consulting partner to Francesco’s due to our excellent experience in working with their talented team.
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