Stupid Question

[Flynnt Maverick]

Here goes my first stupid question:

How do the benchmarks on BizStats.com (http://www.bizstats.com/) compare with your real life finances?
Such as: Is 15% a realistic goal for salaries and wages. with these benchmarks, prime costs total about 57% revenue. But by keeping COGS down, you could project increased Sal/Wages and still keep prime costs below 55%. Do the benchmarks given seem realonable?

[dfwbevslinger]

not even close bro.....a 43% cost of goods when I put in my sales figure.

[Flynnt Maverick]

Um, there is nothing for sale here. Get (my) numbers straight??? Well, thats kinda the point, but I'm trying to figure out what didn't make sense? You gave me 43% cost of goods (the % change slightly depending on the income that is input) plus 15.4% salaries/wages, which is 58.4% or .6 more than my first post. then keeping cost of goods at lets say 40% brings Prime costs to 55.4.....

So "not even close" means....? Sal/Wages in your business is nowhere near the BizStats qoute??? Or their cost of gooda is not even close to yours???

Or does not even close refer to all the BizStats averages???

anything else I need to clear up?

[dfwbevslinger]

my apologies for earlier! To answer your first question a 15.4% for wages and labor is about what a place that serves food would run. A place without food should usually be able to operate at 10% labor. So, labor is fairly accurate. However a 43% cost of goods is no where in the ballpark for a place that doesn't serve food.

[Estefon]

I own a bar/grill that equals approximately 38% food sales, 60% bar sales and 2% vending sales. Annual revenue is around 1.1 Million / year. The only reason I mention sales, is because I think labor is both a variable and a fixed expense. I run a 20% labor cost, 33% food cost and a 25% bar cost. Overall, my gross profit with labor is around 42%. That being said, I consider us one of the cheapest places around to drink and eat (we're a neighborhood bar with great regulars that I consistantly "hook up") and we pay our employees above the industry standard for this town.

The benchmarks seem pretty sound to me, but I'm a restaurant/bar guy, not a nightclub owner. Remember, they're benchmarks only. You'll have to make your own judgements based upon the information and apply it to your own situation.

I hope this is helpful and please feel free to keep asking stupid questions. :)

[Flynnt Maverick]

Yeah, both helpful. Thanks. One other thing I should have clarified: I am wanting to compare those benchmarks to BAR/grill operations. That tid-bit of info does have an effect on percentages, starting with cost of goods.

And mixed costs for salaries/labor is kinda another of the reasons for checking on that %. Calculating a fixed salary (managment postitions) into the total cost of labor really plays with the budget for wage workers (knocking % out of wack. I'm having a problem with the hypothetical/budgeted payroll.

With a 1 mil. revenue/year, whats your seating capacity and turnover like? I'm not playing with numbers near 1 mil. But turnover could be helpful.

Trying to keep in mind that those are benchmarks only, as long as they are reasonable (particularly salaries/wages for this instance), that is a starting point to, as you said, make judgements and apply it to your own situation.

Remember I'm posting based off of hypothetical guesstimates only, not real world. So if it looks like I don't know what I'm talking about (I probably don't :D ), I appreciate you setting it straight.

[David]

Here's some stuff that I pulled from an old business plan. I hope that it transfers OK.



Pour Costs have been estimated at 20% for liquor, 28% for bottled beer and 33% for wine. (Cost of Goods divided by the Retail Sale Price equals the Pour Cost).

Beverage Sales

Beer $ 423,000
Liquor $ 296,050
Wine $ 121,824
Other $ 10,153

Total Beverage Sales $ 851,027

Miscellaneous Sales

Cover Charge $ 52,010
Boutique $ 4,000
Gaming $ 72,980
Total Miscellaneous Sales $ 128,990

Total Sales $ 980,017

Costs of Sales

Beer $ 118,440
Liquor $ 59,204
Wine $ 40,612
Other $ 2,537

Total Costs of Beverage Sales $ 220,793

Costs of Miscellaneous Sales

Boutique $ 3,200


Total Costs of Miscellaneous Sales $ 3,200


Total Costs of Sales $ 223,993


Gross Profit $ 756,024




Payroll & Related

Bartenders $ 73,912.80
Disc Jockeys (DJ) $ 14,996.80
Doormen/Security $ 26,780.00
Janitorial $ 12,000.00
Management $ 25,000.00
Music and Promotions Manager $ 20,000.00
Utilityman $ 5623.80
Waitresses $ 89,177.40

Total Cost of Payroll & Related $ 267,490.80




Annual General Expenses

Accounting $ 7,200.00
Advertising $ 60,000.00
Alarm Service $ 360.00
Dues & Subscriptions $ 300.00
Event Decorations $ 5,000.00
Equipment Leases $
Insurance $ 20,000.00
Legal Fees $ 5,000.00
Licenses
All Beverage $ 500.00
Business $ 55.00
Gaming $ 4,000.00
Lighting Supplies $ 3,600.00
Loan Payback $ 214,753.00 ($1.65mm)
Maintenance $ 6,000.00
Miscellaneous $ 5,000.00
Music Supplies $ 2,500.00
Office Supplies $ 2,000.00
Pest Control $ 1,000.00
Phone $ 1,200.00
Printing $ 1,000.00
Prizes & Giveaways $ 15,600.00
Real Estate Taxes $ 10,000.00 (estimated)
Supplies $ 24,000.00
Uniforms $ 3,500.00
Utilities
Gas $ 2,500.00
Water/Sewer $ 5,000.00
Electricity $ 12,000.00
Workman’s Comp $ 16,000.00

Total of Annual General Expenses $ 428,068.00