Do you know your prime cost?
For decades, restaurants have been run with one key number in mind. This magic number ensures that the owners make money. It’s called prime cost. To old timers like me, it used to be called controllable expenses, in the control of management on a daily basis on how they hire, fire, schedule their team members to purchasing and utilizing products.
Prime Cost = Total Cost of Goods Sold + Total Labor Cost
My goal is to teach anyone who is responsible for the success of a restaurant what you need to know to get your prime cost at or below 55 percent!
That’s right – your total COGS and labor cost combined will be no more than 55 percent if you follow what I teach you.
What would you do with that extra money?
- Take a vacation?
- Hire a general manager?
- Invest in new equipment?
- Enjoy the extra cash flow?
Go ahead – daydream about it! Because if you work the systems I’m teaching, you’ll reach that 55 percent prime cost target.
If you would like to learn ways to control prime cost, read our free special report, Is Your Food Distributor Screwing You? 5 Things You Can Do Now to Lower Food Cost. Download it here. Be sure to visit my YouTube channel for more helpful restaurant management video tips.