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Prime cost: the one number that says if you survive
Food plus labour as a share of sales. Under 60% and you have room. Over 65% and the rent is eating you.
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Check your prime costPrime cost is your two biggest controllable costs added together, food and drink plus labour, as a percentage of sales. Rent is fixed. Power is mostly fixed. Prime cost is the part you can actually move this week.
The formula
Prime cost % = (cost of goods + total labour including payroll taxes and benefits) ÷ sales × 100. Use the same period for all three numbers. A week is ideal; a month is fine.
The bands
Healthy. What is left covers rent, power, insurance, and leaves real profit.
Tight. You are probably profitable on paper and broke in the bank. One slow month hurts.
Losing money once rent is paid, in almost every location. Fix it before anything else.
- Food and drink
- $19,800 (33%)
- Labour, all in
- $17,400 (29%)
- Prime cost
- 62%
Verdict Barely. Find $1,200 a month and you are back under 60%.
Where the fix usually is
- Food side: the three or four plates that are over target and sell a lot. Fix those first.
- Labour side: the two slowest shifts of the week. Schedule to sales, not to habit.
- Both: check it weekly. Monthly is too late to change the schedule.
- Do not cut quality to fix prime cost. Cut waste, cut dead hours, and reprice what is underpriced.
Now do it with your numbers.
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Check your prime cost