Cost of food as percentage of gross

what do you think the cost of food should be as a percentage of gross on an outside stand that sells snow cones, hot dogs, hamburgers, sausage wraps, breakfast tacos and like 5000000000 more things of the like. Thx for ure input. Sorry for my bad typing I'm on iPhone.

quote:

Originally posted by asdfghjkl
what do you think the cost of food should be as a percentage of gross on an outside stand that sells snow cones, hot dogs, hamburgers, sausage wraps, breakfast tacos and like 5000000000 more things of the like. Thx for ure input. Sorry for my bad typing I'm on iPhone.

This is the strangest post I haver ever seen on this forum. To answer this: You have got to be kidding me right? If not give your phone to someone that has a little intelligence.

Food cost, 29%

thanks chewing and pd. I was asking for someone else. The question came up while we were all talking and I thought I'd just get on my phone and ask. Sorry if I didn't provide much info or came off as a dumbass

quote:

Originally posted by chewingthefat
Food cost, 29%

What?

If your stand is well run, about 20-25%

quote:

Originally posted by essvee
If your stand is well run, about 20-25%

May I ask what business your in?

This was posted on another food forum by Brandon O'Dell. As you read it you'll
understand there is no set answer to your question.

Cost percentages are different for every operation. A realized food cost percentage will be determined by pricing, purchasing savvy and the ability to negotiate a contract, and cost control. What works for one business won't work for another.

Asking other people what type of percentage they run won't help you in your business plan. You might as well just pick a number out of thin air, because different, successful, restaurants can operate with a cost of goods sold anywhere from 50% to 15%, and everywhere in between.

As far as "what are cost of sales", they are your food cost, your beverage cost, and the cost of any merchandise or other items you are selling. Each will likely have a different target percentage.

If you want to set up projected financial's, start with the minimum profit you need to make in order for this to be worth your time, then work backwards. Input all the expenses you can estimate with any degree of accuracy, then continue on to the ones you are less sure about. If your product costs are the area where you are least sure, you should leave those til last. After all your revenue is accounted for by profit, operating expenses and labor, what is left will be what you can spend on food, beverages and merchandise.

Once you are this far with your financial's, you can start to look at feasibility. Is that cost percentage possible with the type of items you want to sell? With the prices necessary to yield that cost percentage, is there enough gross profit left over to pay all the other expenses? How many items do you have to sell to pay those expenses with that gross profit? Is it possible? How much traffic will you have to have into your business to sell that many items? Is that possible? Do you have enough parking spaces to allow that many people into your business? Is your access from the road easy enough to get enough people in to fill those parking spaces?

If you're just putting in numbers to get a loan, you could plug in just about anything that yields a net profit, and many bankers won't know the difference. All they see is the "profit", which is theoretical at best. If this is for the loan, go to the NRA and look up some average numbers and plug them in. Make the adjustments necessary to make your business look good. Get the money.

__________________
Brandon O'Dell
O'Dell Consulting

quote:

Originally posted by Dr of BBQ

quote:

Originally posted by chewingthefat
Food cost, 29%

What?

My food cost is 29%

I answered this question on another forum-was basically told i was in correct. 50% is what you should get.

quote:

Originally posted by annpeeples

I answered this question on another forum-was basically told i was in correct. 50% is what you should get.

I'm sorry Ann, but there are very few food service business models that can succeed with a 50% food cost. There are just too many regulatory and operational costs for the typical food operation to be profitable unless the owner does all the work and he/she doesn't mind missing a paycheck every once in a while. If you're very high end or very high volume, you can possibly get by with a 50% food cost. Otherwise, it's unlikely.

Basically all the answers above are correct. But the percentages are not items that I would ignore. The old saying is that you sell at what the market will bare. So a little more simplified food/cost analysis is to use your competitor’s selling price for each item that you plan to sell and factor in your food cost to get your percentage factors.

Using these factors you can now calculate minimum sells you need to break even with your food cost and overhead (cart cost, gas, eminence, business license, ect). Also, you can determine minimum sells needed to meet the break-even point and pay yourself a reasonable wage and/or find a new location to do business. And, this would/should be based on a daily operating cost.

Years ago I was told that average sell price mark-up for a restaurant was 3X’s food cost. But this was not total cost, food cost & business over-head would be closer to 50%. But comparing a restaurant to a food cart is like comparing a supermarket to a convenience store; each has a different pricing structure and volume of business and the customer pays for convenience.

Just my 2 cents, I know others will just say Bull Sh..............

I cannot say for stands because I am unfamiliar with their location expenses (rent, utilities, advertising, CAMS, etc). But a rule of thumb I've heard tell of is trying to target a COMBINED COG and labor somewhere around 50% for a traditional location. Don't know if this can apply for a stand though.