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The Real Cost of Running a Restaurant

From Menu Pages Chicago (blogs.menupages.com/chicago) and the San Francisco Chronicle (www.sfgate.com): For the SF Gate, restaurant critic Michael Bauer wonders why it is that it's so much more expensive to open a restaurant in San Francisco than it is anywhere else in the country. (The answer, in a nutshell, is that minimum wage there is a whopping $9.36, and employers are required to shell out about $2,340 a year per employee for mandatory health care provision.) In looking at service costs for his city, Bauer compared it to estimated service costs in other major restaurant markets - New York, Boston, and of course Chicago. Ever wanted to open your own shop here? According to Michael Bauer, here's how much it'll cost you for employee services alone:

    Chicago
    Minimum wage (w/Tip Credit) $ 3.90
    Server Labor Cost $ 7,800
    Payroll Tax & Work Comp $ 1,248
    Total Annual Cost [Per employee] $ 9,048
    Cost for 12 Workers $108,576

This figure comes in just under New York's $128,064, and above Boston's obscenely low $73,219. And be grateful you're not opening your joint in the Bay Area: the total cost for 12 workers out west is $296,076. Of course, none of this takes into account rent, facilities, kitchen staff, the cost of food, and all the other little incidentals. No one ever said opening a restaurant was easy.
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