Prime Cost Calculator
Enter your beverage cost, food cost, labor, and sales for the period. You get prime cost percentage, plus the cost of goods and labor split that makes it up, against the line every operator watches.
This is only as honest as the numbers you feed it. Real cost of goods is what you used, not what you bought, and that comes from counting. That is where prime cost gets real.
Healthy prime cost by operation.
Prime cost is cost of goods plus labor, and it is the number that leaves room for everything else, rent, utilities, and what you take home. These are the lines operators watch. They are targets, not laws, and every operation runs a little different.
| Operation | Healthy prime cost | Left for rent and profit |
|---|---|---|
| Bar, beverage-led | 55% to 60% | 40% to 45% |
| Bar with a full kitchen | 58% to 63% | 37% to 42% |
| Full-service restaurant | 60% to 65% | 35% to 40% |
| The line most operators watch | Under 65% | Over 35% |
Prime cost only moves two ways: your cost of goods or your labor. That is the whole reason it is the number to watch, everything you can actually control lives inside it. Bar Cop tracks both halves week to week and prices the gap in dollars, so you know which half moved and by how much.
How prime cost is calculated.
Cost of goods, counted
Add your beverage and food cost, and use what you actually used, not what you bought. Cost of goods is beginning inventory plus purchases minus ending inventory. Use invoices instead and prime cost is off by whatever your inventory swung. This step needs a count.
Add all your labor
Add every dollar of labor for the same period. Hourly wages, salaried managers, payroll taxes, and benefits. The salaried people count. Leaving them out is how an operator swears labor is at 18 percent when it is really at 26.
Divide by sales
Prime cost is cost of goods plus labor. Divide that by total sales and multiply by 100. Under 60 percent is healthy for most bars, 60 to 65 is a watch, and past 65 there is not much left for the rent. It is one number, and it is the one to run your week against.