How To Calculate Labour Cost For Restaurants & Small Businesses 2022 | Restaurant Management
Channel: Wilson K Lee - How To Open A Restaurant / F&B Shop
Date: 2020-04-15

Did you know that labour is one of three big costs in a restaurant business? Today I'll show you how to calculate labour cost in restaurants...
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👀 ABOUT THIS VIDEO
Labour takes a huge chunk of money for restaurant businesses and small businesses. Which is why it is important to know how to calculate labor cost so you can see exactly how much it is taking from the pie. 

But before yo even calculate your labour cost, you need to know what labour cost is. Many people make the mistake of just thinking it is how much you pay someone per hour or salary...but it is more. You need to include bonuses, payroll taxes, remittance, benefits, meals, uniform, training, and more. A lot goes into the cost of a staff, which is WHY staffing and retaining good staff is so important. 

There are generally two ways to calculate labour cost in restaurants:

1. Labour as % of sales OR
2. Labour as % of total operating costs

Regardless of which you choose (I prefer method 1), the key is knowing how your labour cost compares to industry standards and benchmarks. Because if you're OVER the standard, it may mean there are things you or your business is not being efficient on, which is driving your labour cost UP. But you won't know any of this without calculating your labour cost and knowing the industry standards. Only then you'll be able to take out the magnifying glass and see where you can make changes. 

So if you're a restaurant owner, restaurant manager, food entrepreneur, small business owner, and are looking to learn how to calculate labor cost and make your business more profitable, or want to learn how to start a restaurant or how to open a successful restaurant, keep on watching!
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👤 ABOUT WILSON: 
I’m Wilson, your new restaurant business partner. I’m here to help turn your food and beverage concept into a reality with expert tips & tricks for success. 
My videos are based on years spent in the industry building multi-million dollar businesses, including my own international dessert chain (https://720sweets.com/) with locations spanning the globe. Since my franchise was acquired (2020) it’s been my mission to share this knowledge with people like you who have great ideas, but just can’t seem to break through. If I did it all with no experience, so can you. I know firsthand the struggles and mistakes most entrepreneurs make, and want to show you exactly how to avoid them. 

I’ve helped hundreds of restaurant owners and entrepreneurs create explosive Food & Beverage businesses. You don’t have to take my word for it. I’ve been awarded Top 30 Under 30, Young Entrepreneur of the Year, Top 10 Emerging Entrepreneurs, and recently a Forbes Business Council Member. 

Subscribe to see what everyone’s talking about and learn how you can achieve the same life-changing results. 

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