Restaurant Industry Standards: What Should Your Cost Percentages Be?

by: Dave Allred TheRealBarman

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howdy-ho Dave Allred the real bar man from bar Patrol net today I'm going to talk to you really quick about bar and restaurant industry standard averages six out of ten bars I go and speak with the owner manager they're not even tracking their pour cost percentage their prime cost percentage and anything like that and then I'm doing profit loss team at the end of the month I'm just kind of flying by the seat of the pants so whether that's you if you don't have anything in place or you do have something in place but you want to see where you compared to where you're supposed to be at and I'm gonna go over that really quick right now we're gonna head to the computer go through the slideshow and then you can click the link under this video and get a PDF so you can print it out put it on your wall whatever you got to do to get to those industry averages and make sure you're making the right profits it's not going to be perfect for every bar after your fine dining or a casual it's gonna be a little bit different but this will give you a benchmark that you can follow so let's head to the computer right now make sure to subscribe to my youtube channel for more cool stuff and I'll see you at the computer let's go ok welcome to the slideshow this should go pretty quick we're gonna talk quickly about the industry standards what your cost percentages should be inside the barn restaurant where you rank inside these numbers and these are the target benchmarks you need to hit to be successful and as it says here although the numbers might bore you or even make you want to pull your hair out by the roots they're the key to your success it's like using a road map and by analyzing where you're at you're able to adjust your course to get where you need to be and this is all about if you don't measure it you can't monitor it if you don't monitor you can't improve your situation and why the hell are you in business not all bars and restaurants are created equal so the numbers here will not exactly match but you should be doing all that you can do to achieve realistic industry benchmarks so the numbers won't be perfect but they should be in this ballpark your numbers should be right around these areas and then note that these are benchmarks you should be hitting the actual industry standards are often much worse so the title of this is the industry averages but that's not necessarily true and all the bars and restaurants a lot of them are often much worse than they say here but this is what you should be hitting so let's go and do it here's alcohol your liquor should be in the teens somewhere 17 to 20 percent around 1718 Julie where I'd like to hit bottle beer 22 to 26 percent draught beer 18 to 22 percent and then Hawaiians all's a little bit higher at 25 to 35 percent get in a non alcohol your soda should be 10 to 12 percent coffee 15 to 18 specialty coffee 12 to 15 because you can charge a little bit more for it so it brings it down food in general 28 to 32 percent depending on fine or casual dining this is the numbers that you should be hitting a lot of places are at 30 you know six to forty percent which is really bad paper products find I need 1 to 2% casual dining 3 to 4 percent right in that area and then labor is a big one not staffing to many people's management salaries should be right around 8 to 10 percent of your total sales front of the house and back on the house I already employees 18 to 22 percent and then your benefits right at 4 to 6 percent and then all these put together bring up your prime cost if you don't know much about prime cost is really important articles on this you can read their cogs plus payroll divided by sales cogs cost of goods sold and then you divide it by your total sales so prime classes is the key indicator and if you could only choose one metric to measure how well financially you're doing in the bar restaurant prime cost would be the one it factors in the three major cost put together food alcohol and labor and gives you the biggest opportunity to see where you're at and the main areas to improve on and you know controls the main word to use her controller food alcohol and labor and then your prophets will rise it's just a formula that works every time and then you're occupancy you know we talked about location location location one other videos you want to make sure your rent isn't too high for 7% taxes and miscellaneous three to four percent and your total occupancy is 10 percent or less and that occupy occupancy includes all these down here listed that you can see there and then we talk about sales per square foot your annual sales divided by the square footage of your establishment and you can get a general benchmark here if your 200 dollars per square foot or less you're losing money or very low and that break-even point or average is 202 to 250 modest profit 250 to 400 and the high profit is $400 per square foot or higher so a lot of people don't figure this but it's nice to know what your making per square foot and it also helps you figure out your occupancy so visit Bart control botnet you can click on the resource tab once you get there to download this industry standards so you have it all and you can you can download a PDF and you can print it out hang it on your wall whatever you got to do to make sure you're hitting these industry standards so visit me there you can also visit me at the real bar mancom subscribe to my youtube channel for more cool stuff I am Dave Lawler the real bar man from bar control net I'm out see you

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