Updated P&L. Please continue to provide feedback if you wish to challenge any of the numbers. I lowered gross sales (only a tiny bit) to make labor costs as a % of sales and profit as a percent of sales traditional with the industry. You are welcome to challenge these numbers if you wish, but I would encourage you to google and learn about traditional restaurant margins (and the cost of labor).
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I repeated myself several times about the mistakes in your model but you continuosly overlook it. Why should I continue to go back and forth but let me summarize it again for you:
1. The min wage is to be phased in over 5 years, you jacked it up immediately
2. Revenues over that 5 year period should be expected to increase 2-3% annually ata minimum, you kept them the same.
3. All 20 employess will not be earning the min wage because at least half of them are tipped so their salary would be less than you estimated thus a lower labor cost increase with an increase in min wage.
4. Your Total Labor does not even add up correctly unless there is something hidden.
5. Owner could easily shave off a few hours a week of being open or shifts to save some money.
Restaurant labor is in 3 groups:
Front House Staff (servers hosts and bartenders)
Managers
Kitchen Staff
Or you can divide it into 2 groups of hourly v. annual salary.
Then you have to adjust labor depending on which night of the week. You will have more staff on FRI and SAT then you will have on TUE and WED. So your salary assumptions are generic.
Also labor should be less than 30% unless this is a really fine dining establishment but even then the prices charged are way higher. I dont know what kind of restaurant this is.
But I am supposed to go to homework to fix all the mistakes.
I tell undergrad students I used to teach about models..... garbage in... garbage out.
If you want to make crazy assumptions then it is easy to show how a restaurant goes from profitable to a loss.... but where is the complaints when food costs jump like they have with meat and dairy various times over the past 2 years, what about rent increases etc... labor is a cost of business and despite your wild accusation that it would double in price overnight, restaurants and businesses can adjust to a reasonable increase in min wage. If not then they go out of business just like if their rent increased over the next 5 years with an escalation clause.
You are implying to us all you have vast experience in running a business but it is not s howing in how you model costs and forecasts. I should not have to do your homework for you.
