Prime Cost Calculator

 

Prime Cost Calculator 

 

Before we get to discussing other restaurant costs, we need to cover prime costs (because they include both your labor costs and your food costs). 

 

Prime costs are important to know because they are a key indicator of how your restaurant is performing.

 

In order to calculate prime costs, you will use this formula: 

COGS + Labor Costs = Prime Cost. 

Now, you can divide your prime cost by your sales, and you'll get your prime cost as a percentage of your sales. 

Prime Cost ÷ Total Sales = Prime Cost Percentage

On average, you should try to keep your prime costs below 60%. 

Since prime costs are an indicator of success, you should try to check your prime costs on a weekly basis. But don't fret if you see discrepancies in your numbers—prime costs will fluctuate, no matter how well you streamline your service and inventory.

Knowing where you stand is half the battle. It will help you make changes as you go, and spot inefficiencies before they begin to impact your bottom line.  

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