Restaurant Labor Cost Percentage Calculator

One of the many important costings and statistical figures in the domain of restaurant business and similar businesses is the costing of the labor and coming up with a percentage or numbers that how much that affects your revenue. This is one of the most important metrics to keep track of on a daily basis.

The reason is that labor is something that is related to an everyday time frame. This can be put second to renting. So, we will start by defining what the labor cost percentage is and then work our way to define how it can be calculated efficiently.

What labor cost is?

This is a term that describes the amount your restaurant is spending on labor, and it includes paycheck amounts as well as other figures such as taxes and employee benefits. This cost goes on to affect the prime cost of the restaurant and can, thus, affect your overall restaurant’s efficiency. According to Chron, the average figure for labor costs is 30-35% of the total revenue of food industry. Many professional restauranteurs know the methods to calculate this labor cost percentage and can provide examples that might be gibberish to the untrained eye. However, there is a method, and we can learn it.

Calculating Labor Cost Percentage

There are only a few steps and basic knowledge of what to include in “labor cost” of all the costings to make an efficient percentage calculation. Usually, the calculation of two different methods. One is labor as a percentage of sales and other is labor as a percentage of total operating costs.

Here is how the first one works

  • Determine your restaurant’s labor cost. Includes all the money that has to be paid to the employees.
  • Determine restaurant’s revenue. Revenue, in this case, is the bottom line. This can be found in the POS system dashboard; a system most modern restaurant has.
  • Divide labor cost by annual revenue. Let us say that the restaurant paid $300,000 a year to employees and managed to bring up $1000000. Divide, and you will get 0.3
  • Multiply by 100 to get the percentage figure as 30%

Here is how the second one works

  • Determine the annual labor cost
  • Determine the total operating costs
  • Divide the annual labor cost by the total operating costs
  • Multiply by 100 to get a percentage figure

It doesn’t seem so difficult now, does it? Only a few steps to consider and look at in a focused manner to get to a figure.

Lowering Labor Costs

This is something that varies from area to area. However, most common ways to reduce labor costs is to give bonuses and healthy and financially efficient benefits to employees. This can take the focus off of the employee wages and bring their focus on the benefits that the restaurant offers to them as an overall package.

Restaurant Website Management… A Complete Guide

Like all other industries, restaurant owners should be aware of the significance of marketing and promote using all possible promotional tools and marketing channels. It is of no doubt that these days social media presence of any small or large scale business is mandatory. You get many new customers through social and electronic media which may ultimately become repeat customers. However, it is not enough to promote your restaurant through social media pages only. Having a good website of your restaurant is a must also. That being said, developing a website is only one part. The second part is to manage and maintain it properly. Let’s explore why restaurant website management is vital.

Benefits of Restaurant Website:

  • Customer Attraction and Building Brand Awareness: The first and foremost benefit of having a restaurant website is getting customers through search engine traffic. You will be at a loss when a customer searches online “restaurants in London,” and your website does, not show up because you don’t have one. He would go to your competitor’s restaurant. Thus, it is important to have your website to build brand awareness among customers so that they can easily reach you out. They can also get all the information from your website they need instantly.
  • You can Beat Your Competition: Let’s assume your competitor is undergoing marketing strategies through social media accounts but does not possess a website? You can easily exploit this opportunity by making your own. It will surely help in growing your local as well as the general audience.

When Should You Manage Your Restaurant Website?

It is a very important decision whether to manage your website by yourself or via the third party. You should manage your restaurant website when you know,

  • Your budget is limited, and you cannot hire a digital marketing agency to manage the website. You have no choice other than to manage it on your own.
  • You are technically equipped to develop and design the website from scratch.
  • You have enough time to keep your website up-to-date through blogs, reviews, menu-updates, etc.
  • You can do “Search engine optimization” (SEO) to get your website on one of the top results via Google search. SEO is important to get more traffic to your restaurant website.

When Should You Hire a Third-Part For Your Restaurant Website Management?

You have to hire a third-party digital agency to manage your restaurant website when you cannot manage it by yourself due to the reasons mentioned above. But before hiring, do keep into consideration the following points:

  • Experience: You must go for a reputed company with sound experience. Do check out their portfolio of past work to know about their style and strategies.
  • What Services the Company Offer: You should opt out for a company which is offering additional services other than website management. For example, it would be a plus point if they do SEO for your website or they offer additional graphic designing services.
  • Company’s reviews: Take some time out and check company’s testimonials pages to check the reviews. Contact one of their clients to get information about their experience to work with the said company. This way, you can have a better idea whether to hire the agency or not.

Effective Restaurant Promotional Ideas for Beginners

Marketing and promotion play a vital role in increasing profitability of any restaurant. If you have recently opened your dream new restaurant, then you must go for some effective marketing ideas to make it grow in no time. In another case, if your already established restaurant has been facing a downfall, then also, you must think to redesign your marketing strategies.

This article will provide you all the up-to-date marketing tips and tricks to boost your restaurant sales. Let’s have a look below:

Creative Marketing

Effective, Easy and Useful Restaurant Marketing Strategies:

1: Make Use of “Google My Business Profile” Service:

When Google is giving you a complimentary service called “Google My Business Profile” then why not avail it as a primary marketing tool? It is an easy way to reach your target customers. By creating “Google My Business Profile,” you can mark your online presence as it shows your restaurant’s name, location, images, working hours, reviews, contact information as well as the ability to take bookings through online booking widgets.

2: Make Your Website:

In this time of global era, no business can flourish without a website. It is a must-to-do marketing strategy of your online existence. If you lack technical skills of making a website, then you must hire a website developer who can make an outstanding website for your restaurant.

3: Create Social Media Accounts:

No one can deny the power of social media these days. You must also make social media accounts for your restaurant on Facebook, Instagram, and Twitter as a quick marketing approach. You can make very good use of these accounts to keep your regular and potential customers updated about all the related information about your restaurant on a daily basis.

4: Post Menu on Social Media accounts to Attract Customers:

As a restaurant owner, it is a very good opportunity to post your menu online on social media pages to attract customers. The lip-smacking images of the tempting menu will urge customers to come to your restaurant.

5: Communicate with Customers on the Regular basis:

It is a new marketing strategy to interact with your customers online on a regular basis. You can have a “Question &Answer” session on Facebook or Twitter. You can also communicate with them to get their feedback and make your services better in the light of their suggestions.

6: Emailing New and Repeat Customers:

Sending emails about special offers and amazing discounts on the menu using software like MailChimp and Intercom to new and repeat customers will keep them interacted with your restaurant offerings directly.

7:  Use the Power of Bloggers:

Bloggers act as an excellent marketing source to promote your restaurant. You can invite famous bloggers to your restaurant and offer them free menu. They will post about your services and the positive word-of-mouth would reach to their thousands of followers in a fraction of the time.

8: Creating Own Blog:

Just by spending few hours a week, you can create your SEO optimized blog. You can write weekly about the interesting content to attract new and retain existing customers. You can also invite bloggers to write guest blogs.

9: Paid Advertisement:

Last but not the least; the paid advertisement is one hard and effective source of promoting your new restaurant. You can use paid advertising to exert a pull on new customers who do not know about your restaurant’s existence at all. You can also use location and time-based advertising to target potential customers within your area.