In many companies one of the biggest costs of doing business is the staff (employees) and related expenses. This is especially true in most restaurants who not only have a staff of servers, but also cooks, key employees, managers, host staff and other support personnel. A restaurant business plan should not underestimate or overlook the labor costs.
One of the main factors in building a personnel plan is the number of people you will employ and the timing. You must figure out how many people your restaurant or other business needs and when it needs them. This relates to the seasonality discussed in the sales forecast. A restaurant business plan should also tie labor into the level of service you plan to instill, indicated by your promotional plan. Also, not all employees will be hired at once. You need to get an understanding of just how many employees you will need based upon the sales volume that your business is doing. For this you need to have a clear understanding of just how many meals the cooks can prepare (per cook) and how many tables a server can handle in a given hour and how many meals will be served to those tables. This is generally the means for calculating personnel requirements across other industry segments as well.
One thing you don't want to forget in your restaurant business plan or any other business plan is your benefits and taxes associated with your planned personnel. Some employee costs are instituted by law. It is best to check with your state's department of labor to find out what these requirements are.
If the business plan is for a bank or for you personally, broad categories are usually fine. If it is for an investor or an operations guide, break them out as much as possible so you can see how hiring and firings affect the bottom line of the business plan.
One of the biggest follies that I have seen when entrepreneurs build their business plan is that they believe the can handle everything or almost everything. Being in business at the start-up level does require a lot of work and for the owner(s) to wear many hats in the beginning, but you also must be realistic with what you can accomplish in a ten hour day. Also take into consideration how you will remove yourself from the daily tasks of running the business by hiring personnel; this serves two purposes: it allows you to focus on expanding your business, its efficiency and its market presence; and it allows you to enjoy your business rather than resent it.
Another common mistake in the personnel plan is to include the owner's salary when a sole proprietor structure is used. In a sole proprietorship, the owner takes draws from profits, not payroll, which often has a 15–17% premium added to it for social security, payroll tax, Medicare, and workman's compensation. While the owner may need to pay some of this, it will come from the draws he or she takes, not the business directly. This leads to a discussion with your accountant regarding the benefits of an LLC, S-Corp, or C-Corp depending on the number of people involved and the type of business you are operating.