Labor cost data is your strongest weapon in a bank meeting about expansion. Most entrepreneurs walk in armed with revenue dreams and market research, while banks care about one thing: can you control costs? Your labor numbers transform pipe dreams into bankable business plans.
Why banks are so interested in labor costs
Labor costs eat up your second-largest chunk of money after ingredients. Most restaurants see this hit 25-35% of revenue. Banks need answers to specific questions:
- Can you realistically estimate wage costs for your new location
- Does your current staffing plan actually work efficiently
- Do you handle seasonal ups and downs without bleeding money
- Can you predict exactly how much staff you need per revenue level
Without this data, your expansion plan sounds like wishful thinking. But solid numbers? That becomes a smart investment opportunity.
What labor cost data you need to collect
Gather at least 12 months of data from your current location. This reveals seasonal patterns and growth trends that make banks sit up and pay attention.
💡 Example: Bistro with €40,000 monthly revenue
- Kitchen: €8,500 (21% of revenue)
- Service: €4,800 (12% of revenue)
- Management: €3,200 (8% of revenue)
- Total labor costs: €16,500 (41% of revenue)
Bank sees: realistic percentages, no fantasy numbers
Essential figures per month:
- Gross wages by function (kitchen, service, management)
- Employer contributions (roughly 25% on top of gross wage)
- Temporary staff and freelancers
- Holiday pay and 13th month bonus
- Number of hours worked per function
- Revenue per hour worked (productivity)
How to present your seasonal patterns
Banks hate seasonal businesses that crash during slow months. Show them you've conquered this challenge instead of just surviving it.
💡 Example: Restaurant with summer terrace
Seasonal differences in labor costs:
- Summer (May-September): 38% of revenue - more service staff
- Winter (October-April): 45% of revenue - less revenue, core team
- Flexible workforce: 60% permanent staff, 40% seasonal workers
Bank sees: you plan flexibly and keep costs manageable
Productivity figures that impress
Show efficient operations with revenue per hour worked. This metric proves you're not carrying dead weight on your payroll.
Formula:
Revenue per hour = Monthly revenue / Total hours worked
💡 Example calculation:
- Monthly revenue: €45,000
- Kitchen: 520 hours × €16/hour = €8,320
- Service: 380 hours × €13/hour = €4,940
- Total: 900 hours worked
Productivity: €45,000 / 900 = €50 revenue per hour worked
Standard productivity for restaurants runs €40-60 per hour. From analyzing actual purchasing data across different restaurant types, establishments below €40 typically carry excess staff. Above €60 indicates efficient operations that banks love to fund.
Break-even point per staff member
Calculate how much revenue each employee must generate to keep you profitable. This number tells banks you understand the real cost of every hire.
⚠️ Note:
Always calculate with total labor costs including employer contributions, holiday pay, and temp agency costs. Gross wage alone is fantasy math.
Formula break-even per employee:
Minimum revenue = (Total labor costs employee × 12 months) / Desired labor cost %
At 30% desired labor costs and €3,000 total monthly costs per employee, they need to generate €36,000 / 0.30 = €120,000 annual revenue.
Projection for new location
Use your current data to calculate labor costs for expansion. Banks demand realistic projections based on proven performance, not hopeful guessing.
💡 Example projection new location:
Expected revenue year 1: €480,000
- Labor costs based on current %: €480,000 × 32% = €153,600
- Ramp-up phase: first 6 months +20% = €184,320
- Monthly average: €15,360
Bank sees: you base projection on proven figures
How to present the figures
Create clear tables with monthly figures from at least 12 months. Show trends and seasonal patterns that banks can follow without squinting at messy spreadsheets.
- Use Excel or Google Sheets for professional appearance
- Create charts of labor cost % per month
- Compare with industry averages (show that you know your market)
- Explain how you flexibly respond to busy-period differences
Food cost calculators can automatically generate this data and export to Excel, saving hours when preparing for your bank meeting.
How do you prepare labor cost data for your bank meeting?
Collect 12 months of wage data
Pull from your payroll administration the gross wages, employer contributions, and hours worked per function. Also include temporary staff and freelancers. This gives you complete labor costs per month.
Calculate labor cost percentage per month
Divide your total labor costs by your revenue per month. This percentage should be between 25-40% for restaurants. Create a chart to make seasonal patterns visible.
Make a projection for your new location
Use your current labor cost percentage to calculate costs for expansion. Add 20% extra for the ramp-up phase of the first 6 months. Show that you plan realistically.
✨ Pro tip
Present your last 18 months of labor cost data broken down by kitchen, service, and management functions with monthly variance analysis. This shows banks you track performance closely and can scale efficiently based on proven patterns.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
What labor cost percentage do banks find acceptable?
For restaurants, a healthy labor cost percentage runs 25-35% of revenue. Above 40% looks risky to banks. Below 25% might seem too optimistic and unrealistic.
Should I mention employer contributions separately?
Yes, always show total labor costs including employer contributions (roughly 25% on top of gross wage). Banks want actual costs, not just net wages.
How do I explain seasonal differences to the bank?
Show flexible planning with a core team plus seasonal workers. Explain how you reduce costs during quiet periods without sacrificing quality.
What if my labor costs are higher than average?
Explain the reasoning: higher quality service, complex kitchen operations, or deliberate choice for permanent staff. Show how this fits your concept and target market.
How do I prevent my projection from looking too optimistic?
Base forecasts on proven figures from your current location. Add 20% extra for ramp-up costs and plan conservatively for the first year.
Should I include overtime costs in my labor projections?
Absolutely include overtime in your calculations. Banks need to see realistic costs including peak periods when overtime becomes necessary.
How detailed should my staffing breakdown be for the bank?
Break down by function (kitchen, service, management) and show both full-time and part-time positions. This demonstrates you understand exactly where labor dollars go.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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