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Thread: Cost Of Goods Sold?

  1. #1
    Join Date
    Nov 2008
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    Talking Cost Of Goods Sold?

    Wondering if everyone could share what their "Cost Of Goods Sold" averages?

    What's a good number to shoot for? 35%? 45%? More? Less?

    COGS should not include any overhead or salaried employee costs.

  2. #2
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    My cogs is down to about 30% on the year to date, however I am shooting for a final closer to 27% for this year. We do over 70% food to 30% alcohol sales at this time.

  3. #3
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    Quote Originally Posted by bruce View Post
    My cogs is down to about 30% on the year to date, however I am shooting for a final closer to 27% for this year. We do over 70% food to 30% alcohol sales at this time.
    Bruce,
    Wow! 30% sounds REALLY good considering that 70% of your sales are food! (less margin on food) Are you sure that all your labor costs to produce those sales are in there?

    I beleive that labor costs usually eat up about 20%. Unless you yourself are the labor, which might then be do-able. (If your not apying yourself anything)

  4. #4
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    Quote Originally Posted by Newbei View Post
    Wondering if everyone could share what their "Cost Of Goods Sold" averages?

    What's a good number to shoot for? 35%? 45%? More? Less?

    COGS should not include any overhead or salaried employee costs.
    Just the cost of food and alcohol purchased. I don't even count the TP as it does not sell. Anyone tells you a number in the 35% to 45% with labor included is delusional to say the least. If you can get away without hired help and do it legally, I would like to live where you do.

  5. #5
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    We also have a $8.55 minimum wage which applies to all employees and tips can not be deducted.

  6. #6
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    Jan 2009
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    Australia
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    We run at around 28 to 30% on food and it varies by product type for alcohol.

    Tap Beer is around 28%
    Packaged Beer is around 23%
    Spirits are around 21%

    Keep in mind our minimum hourly wage is $16.48 with 25% loading on weekends.

  7. #7
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    Jun 2009
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    NJ
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    The preliminary numbers I have seen coming out of the bar I am currently negotiating for are 33% for COGS..

  8. #8
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    Nov 2008
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    NM
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    Pc & cogs

    In reading most all the threads, it looks like 16-25% PC is a good number. What's a good number for all the COGS such as when you add in all your juices, mixes, and everything else that is necessary to mix drinks?

  9. #9
    Join Date
    Oct 2008
    Location
    Waterford, MI
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    105
    Quote Originally Posted by Newbei View Post
    Bruce,
    Wow! 30% sounds REALLY good considering that 70% of your sales are food! (less margin on food) Are you sure that all your labor costs to produce those sales are in there?

    I beleive that labor costs usually eat up about 20%. Unless you yourself are the labor, which might then be do-able. (If your not apying yourself anything)
    I have never calculated labor into the COGS number on a financial statement. Labor is generally a separate line item.

    In addition, lumping all goods sold into one line item is a poor way to evaluate the overall business because you do not see issues that may be occurring in each, distinct, area. I would prefer to target the following COGS goals: Bottled Beer 20%, Draft Beer 18-20%, Wine (glass) 15%, Non-alcoholic Beverage 6-8%, Liquor 17-20%, Food 30-35% (depending on concept, specials, etc).

    Labor greatly varies based upon the concept; restaurants can be in the 30-35% range, bars/clubs hopefully in the 15-25% range.

    Again, these are generalization and much is dependent on the concept and company philosophy.

    By breaking the areas down into separate line items, you have a more accurate understanding of the business situation and see what subcategories need improvement and/or theft deterrence.
    Duane J. Owens, Director of Pubs
    Happy's Pizza & Pubs

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