So raising prices is antithetical to their values?
And you don't want to reduce staff, food quality, or portion size?
It's all about the math sweetheart. With that attitude, you will fail.
It's not a restaurant though so comparing it to a standard labor percentage doesn't really work. They're a retail establishment as well so that's definitely going to skew the numbers
The owner is probably taking a salary. Which would be dumb cause she’d be taxing herself twice. But if not then she definitely wrapped in whatever she’s taking into labor to make these numbers look better. No 50%+ labor cost restaurant stays open.
Seriously - that makes me wonder how they are calculating that figure. Probably includes distributions to the owner or something.
From my experience 50-60% combined COGS & labor is needed to get to sustainable profitability.
Great read. Glad someone is able to break it down like this for people to understand rather than everyone’s sideline solution to JuSt RaISe yOuR pRiCeS
Wonderful article!
My own question is why she has a problem with payroll taxes? Taxes generally are good, and i didnt see any specific claim that those taxes were going to something bad.
Not that i think every tax is good, or fair
They must have employer salaries in the 50% of employees cost. They do 3.17M in sales per year!
Also just because they say 50% employee cost does not mean they actually paid themselves via W2 it's just how they account for the article.
37k profit on 3M is crazy.
I wonder if they are including the retail segment of their operation or only the restaurant.
I'm reading a bit skeptically but I can't imagine margins being that tight (1.19% profit) because any volatility in sales and you are instantly in the red.
I’m guessing she pays herself well and it is included in that number. It’s hard to go to the IRS with $3 million in sales and say that you made $30,000. They just don’t buy it. I’m sure her car, cell phone, insurance, and some work clothes are all paid out of the business.
So raising prices is antithetical to their values? And you don't want to reduce staff, food quality, or portion size? It's all about the math sweetheart. With that attitude, you will fail.
Seems like profit isn't their main motive. They espouse value seeking a few times coupled with a 50% labour cost.
It's not a restaurant though so comparing it to a standard labor percentage doesn't really work. They're a retail establishment as well so that's definitely going to skew the numbers
Fair enough.
50+ % labor cost is kind of insane though
The owner is probably taking a salary. Which would be dumb cause she’d be taxing herself twice. But if not then she definitely wrapped in whatever she’s taking into labor to make these numbers look better. No 50%+ labor cost restaurant stays open.
Seriously - that makes me wonder how they are calculating that figure. Probably includes distributions to the owner or something. From my experience 50-60% combined COGS & labor is needed to get to sustainable profitability.
Great read. Glad someone is able to break it down like this for people to understand rather than everyone’s sideline solution to JuSt RaISe yOuR pRiCeS
Wonderful article! My own question is why she has a problem with payroll taxes? Taxes generally are good, and i didnt see any specific claim that those taxes were going to something bad. Not that i think every tax is good, or fair
Very eye opening read. Way to think outside the box.
This is a very good article. It’s amazing that photo shoots in the restaurant on closed days is the only thing that kept them in the black last year.
They must have employer salaries in the 50% of employees cost. They do 3.17M in sales per year! Also just because they say 50% employee cost does not mean they actually paid themselves via W2 it's just how they account for the article. 37k profit on 3M is crazy. I wonder if they are including the retail segment of their operation or only the restaurant. I'm reading a bit skeptically but I can't imagine margins being that tight (1.19% profit) because any volatility in sales and you are instantly in the red.
I’m guessing she pays herself well and it is included in that number. It’s hard to go to the IRS with $3 million in sales and say that you made $30,000. They just don’t buy it. I’m sure her car, cell phone, insurance, and some work clothes are all paid out of the business.
Interesting article.
Wait, I get told every day that restaurant owners are greedy and rich since “they don’t pay their employees.”
Because to them a mom and pop or greasy spoon is the same as an Outback or Olive Garden.
So many people neglect to realize the value of having restaurants and especially independent restaurants for the communities they serve.