Hey, everybody. Ryan Gromfin with TheRestaurantBoss.com.
And today, we're going to talk about labor cost.
The last few posts I've put up have been a little fluffy,
less hard skill, more kind of theorical and
restaurant management and all that mumbo-jumbo,
and actually, if you get to know me a little bit,
as much as I love that
style and I think those are so important,
I am very, very much a numbers guy.
You can't operate a profitable restaurant
unless you know where your dollars are going unless you know where your pennies are going.
You cannot operate a profitable restaurant. However,
I also know that in order to move your needle,
I mean to move it quick and fast,
there are some other things that we need to talk about in your restaurant,
which are really why the chains are kicking our butts
out there sometimes.
So, today's different though. Today is going to be numbers, today is going to be labor cost.
If you're not already familiar with my thoughts on
prime cost and how important prime cost is for your restaurant,
please go ahead and have a look around my website. Somewhere on here,
I have it featured, I have a three-part series that's titled
why food cost isn't
the most important number in your restaurants, something like that.
I change the title once in a while, but basically,
it's a prime cost program and I talk about
why I only care about prime costs in your restaurant.
However, labor cost is one of those components,
so we're going to just quickly today talk about
labor in your restaurant and
a management theory that you can't expect what you don't inspect.
You can't expect what it is that you don't inspect.
So, today, we're going to talk about a very, very quick way to inspect your labor.
If you're not currently using any kind of daily labor tracking
system, program, spreadsheet, whatever it is;
this is where I want you to start. It's extraordinarily simple.
There is a lot missing from here,
but if you're not even tracking labor on a daily basis,
start with this. Build a very simple Excel spreadsheet -
Monday through Sunday, Total,
Front of the House, Back of the House.
You might have another category, maybe you want bar here,
maybe a bar and catering, you know your restaurant better than I do,
but just for simplicity, Front of the House, Back of the House.
Now, let's assume that on Monday,
you ran five hundred dollars in front of the house labor
and five hundred in back of the house labor for a thousand dollars.
Okay, now depending on what your labor cost goals are
and you may not even have labor cost goals at this point and that's fine, if you don't,
go ahead and shoot me an email. Let's talk about that a little bit or do a little bit more research.
Again, look at my prime cost video because
it's going to be really important, but here's the thing to keep in mind.
Now you know, you did a thousand dollars in labor today
and you'd probably put a sales category or something here,
but let's assume you did three thousand in sales that day.
Quick math, means you're running a 33% labor cost. That may be great,
I don't know. That may be horrible for you,
I don't know.
I get so many questions - is this a good labor cost? Is this a good labor cost? Is this good food cost?
Watch that training series. I will talk about all that. I don't know,
but that's the reality and that's not actually including
your taxes and your insurance and your benefits and all that,
and we'll get to all that later.
Again, I told you, this is very simple. I just want you to start tracking it.
We can get into more details later.
The point is though, let's assume 33% is high for you.
If you wait till your month is over,
if you wait till your week is over,
but if you wait till your month is over, there's nothing you can do now.
You're in reaction mode, you're not proactively
running your business, you're reacting to it.
So, here's what you could do. Maybe that's a bit high for you.
Well, you better call someone off tomorrow
unless you're scheduled to do more business tomorrow,
but this way, if you're tracking labor on a daily basis
when you start coming into your busy Friday Saturday, Sunday,
then you can start making adjustments throughout the week to make sure that you hit
whatever your goal is. I don't know what your goal is,
but make sure that you are inspecting labor daily
and make sure that you're active, that you're calling people off, you're calling people in,
that you're running where you need to be.
You can't do anything about it later and it may not seem like a lot,
but let me tell you – 50, 60, 100 bucks a day and lay,
20 or 30 bucks a day in labor.
Let's take $10 a day in labor.
If you could shave $10 a day in labor,
that's three thousand six hundred and fifty dollars at the end of the year.
That's a trip to Hawaii.
That is a trip to Hawaii. Is it worth the ten minutes a day
so that way you can go to Hawaii next year?
Save twenty dollars a day on labor,
that's a trip for you and your spouse to Hawaii.
Save 50, you're taking the whole family to Hawaii and all you had
to do was save fifty dollars a day.
I can't tell you guys how important this is.
Track your numbers on a daily basis, know where you're at.
Even if you don't know what to do with them yet, contact me. We can figure that out,
but start tracking them.
Simple, simple, simple.
That's fine, I know there's stuff missing here.
Sorry, I know this went a little long.
I just wanted to stress you how important it is.
Again, this is Ryan Gromfin with The Restaurant Boss.
If you're watching this video somewhere other than on my website,
head on over to TheRestaurantBoss.com,
give me your first name and a good email address
so we can keep sending you out this awesome information
as soon as it's available,
as well as other offers and great training and things that I only do for my members.
So as always, comment below, send me an email, like us on Facebook,
follow me on Twitter or Instagram.
I look forward to hearing from you soon. I want to hear about your restaurant.
How can I help? What's going on in your world?
This is Ryan Gromfin with The Restaurant Boss saying thanks and have a wonderful day.