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Running A Restaurant

Servy RUNNING A RESTAURANT ISN'T A PIECE OF CAKE. Let's Open A Restaurant: RESTAURANT MATH Construction and Building Cost $50K to $1.5M+ *Varies by Location and Size Legal Fees, Permits, and Licences $2K+ Equipment $5K to $400K+ Initial Labor $7K to S7OK+ Insurance $2K to $5K+ Marketing $1.5K to $30K+ TOTAL: $115K to $2M+ Okay, so we've laid the foundations. Now what? OPERATIONAL COSTS BREAKING IT DOWN 30% 30% Labor Food and Beverage REVENUE 5% Profit 25% Misc. Food and Beverage Food costs are difficult to control Too many products in inventory Restaurants spent an estimated Perishible products with short life spans $253.6 B %24 %24 on food and drink Losses are difficult to track and assess purchases in 2015 Overall, Food Costs are Rising Wholesale food prices continue to increase, jumping more than 5% in 2014 and nearly 25% during the last five years Labor AVERAGE HOURLY WAGES $23.39 $10.56 $8.20 $9.49 $8.54 $8.93 Food Service Managers IRestaurant Cooks Restaurant Dishwashers IBartenders Restaurant Hosts/Hostesses Waiters and Waitresses As of Jan 2015, 29 states, plus the District of Columbia, had set their minimum wage above the federal level of $7.25 per hour Seattle $15 Kansas City $13 Chicago $13 Oakland $12.25 New York $8.75 S.F. Washington, D.C Š10.50 $15 L.A. $15 San Diego $11.50 Louisville $9 Albuquerque $8.75 Santa Fe $10.84 Proposed Increase in Minimum Wage At Federal Minimum Wage Above Federal Minimum Wage By 2018, New York Cíty will place a Operating profit margins for restaurants could drop by $15 to Minimum Wage in the Fast Food Indūstry as cities and states increase workers' base pay Where are the cooks? The U.S. Bureau projects 15% growth through 2025 in full service restaurants Nearly 200,00ọ0 more line cooks and chefs will be needed THERE'S AN EMPLOYMENT GAP. Restaurant employment growth outpaced overall employment growth for the 16th straight year in 2015 HELP WANTED 19% 9% Restaurant Total Job Market Growth Industry Growth Not to mention the high turnover rate, making training a costly expense 66% Turnover Rate Thats nearly 7 out of 10 employees leaving each year Replacing one minimum- wage worker costs an average of %24 $4,000 %24 So, what does this all mean? There is upward pressure for restaurants to raise their wages to compete for workers Miscellaneous Marketing 2-5% Supplies of total revenue Less than 1% of total revenue Utilities Theft Maintenence Less than 1% of total revenue of total revenue 2-3% Point of Sale Systems 2-3% of total revenue of total revenue Rent Insurance Less than 10-15% 1% of total of total revenue revenue With all of these costs, it can take to break even on a years restaurant. Servy Follow us on Social Media! @servyapp SOURCES "Based on research from:, Open-a-Restaurant.cfm,,, costs-restaurant.html,, and hitp://

Running A Restaurant

shared by benben2 on Mar 28
The second part of a series on restaurant trends, dining, mystery shopping, and more. This infographic takes a look at what goes into opening a restaurant—and keeping it running afterwards.




Jantima Somboonsong


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