Chances are, your employees think you strike it rich with each sale. They don’t realize you have to keep your lights on, buy more cheese and market to keep customers. If you make a $10 sale, they think you’re putting $10 in your pocket. Boy, wouldn’t a 100 percent profit margin be nice?
If you haven’t taken the time to show your employees how things really work, now’s the time. The economy has tightened. Cheese prices are high. Gas prices are high. The minimum wage has increased. You don’t have much to show for every dollar you bring in. If your employees are careless about waste — or if their thieving — you are not making any money. Take a good look at the graphic that accompanies this article. Cut it out and hang it up for your employees to see just how little is left over for you at the end of the day.
Roughly, before taxes, the average pizzeria operator has a 7 percent net profit.
Here’s a breakdown of the average operator’s expenses:
- Food and Beverage, 30 percent
- Labor & Benefits, 35 percent
- Occupancy (rent, taxes, insurance, phone, supplies, common area maintenance, etc.), 20 percent
- Administrative, 8 percent
- Net profit before taxes, 7 percent
Gone are the days of the 10- or 15-percent profit margins. You aren’t getting rich off of each sale, so let your employees know that. It will make a difference.