You're putting in 70-hour weeks but still end each month with nothing to show for it. The culprit? Your labor costs money, even if you don't cut yourself a paycheck. Every hour you work chips away at profit you think you're making.
Why your own time costs money
Most restaurant owners think: "My labor is free since I don't pay myself." Wrong. Every hour you spend prepping vegetables is an hour you can't spend finding new suppliers, improving your marketing, or developing revenue streams.
💡 Example:
You work the line 8 hours daily. A line cook costs €18 hourly.
- Daily value: 8 hours × €18 = €144
- Weekly value: €144 × 6 days = €864
- Annual value: €864 × 52 weeks = €44,928
That €45,000 yearly isn't appearing in your cost calculations.
What this means for your prices
Without counting your labor, dishes appear more profitable than reality. You calculate 30% food cost, but you're actually running 45% once labor gets factored in properly.
⚠️ Watch out:
Restaurants close because owners believe they're profitable while actually hemorrhaging money once true costs surface.
How this eats into your profit
You sell 100 entrees daily. Each generates €2 profit, so €200 daily profit, right? But subtract your 8 hours at €18 = €144. Real profit drops to just €56 per day.
💡 Calculation example:
Pasta carbonara, 50 portions weekly:
- Ingredients: €5.10 per portion
- Your time (15 min): €4.50 per portion
- True cost: €9.60 per portion
Selling price €18.50 excl. VAT = €16.97
Food cost with your labor: 57% (dangerously high!)
Why entrepreneurs forget this
Several reasons explain why your time gets overlooked in cost calculations:
- No invoice arrives: Employees send invoices, you don't bill yourself
- Doesn't feel expensive: No cash leaves your account, so it seems free
- Revenue obsession: Higher sales feel like winning, regardless of profit margins
- No benchmark: You haven't calculated your hourly value
This pattern appears repeatedly in restaurant financials - owners mistake revenue growth for profitability while their unpaid labor subsidizes unsustainable pricing.
The real impact on an annual basis
Working 60 hours weekly at €15 hourly value costs €46,800 annually. Those expenses hide inside what you're calling "profit."
💡 Real-world example:
Restaurant generating €400,000 yearly:
- Food cost excluding your labor: 30% = €120,000
- Your time (60h/week × €15): €46,800
- Actual food cost: 42% = €166,800
Reality: €46,800 less profit than projected
How to fix this
The fix is straightforward: treat your time as a legitimate cost. Calculate your hourly worth (match what you'd pay an employee) and build this into your pricing structure.
Many dishes will need price increases. Scary? Yes. But it's the only path to genuine profitability.
⚠️ Watch out:
If raising prices feels impossible, focus on efficiency instead. Faster prep times mean lower labor costs per dish.
How do you calculate the real cost price including your time?
Determine your hourly rate
Look at what you'd pay a chef for the same work. Calculate €15-20 per hour for kitchen work, €25-35 for management tasks. That's what your time is worth.
Measure your time per dish
Track for a week how much time each dish takes. Add up prep time, cooking time, and plating. Divide this by the number of portions you make.
Calculate labor costs per portion
Multiply your time per portion by your hourly rate. Add this to your ingredient costs for the real cost price including your labor.
✨ Pro tip
Track your time on your 3 highest-volume dishes for exactly 7 days, then calculate the true labor cost per portion. If total costs exceed 50% of menu price, you're bleeding money on your most popular items.
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 hourly rate should I use for myself?
Calculate what you'd pay an employee for identical work. Kitchen tasks run €15-20 hourly, management duties €25-35 hourly. Be realistic about what you actually do.
Do I have to raise my prices if I factor in my time?
Not necessarily. You can also streamline operations so each dish requires less time. Or shift focus toward dishes that sell well but need minimal labor.
How do I know how much time each dish takes?
Track your time for one week - prep, cooking, plating per dish. Divide by portions made. After seven days you'll have solid data on actual time investment.
What if my cost price gets too high when I factor in my time?
Then you're currently losing money on that dish. Three options: increase the price, modify the recipe to reduce prep time, or drop it from your menu entirely.
📚 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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