Restaurant numbers explained
A restaurant or cafe can be full every night and still lose money. The difference between a busy room and a profitable one is usually in a handful of numbers: what each plate costs, how much of each sale goes on ingredients and wages, how many covers the room can serve and what the business has to take before it breaks even. This guide explains each of them in plain terms. Each section links to the calculator that does the arithmetic.
1. Cost every recipe down to the portion
Every other number depends on knowing what one portion costs. Take each recipe, list every ingredient with the quantity used and the price you pay, and allow for the trim and waste that never reach the plate: the peel, the bones, the outer leaves, the cooking loss. Divide the total by the number of portions the recipe yields. The recipe cost calculator handles the waste and trim allowance and gives a cost per portion. Do not forget garnishes, sauces, bread, oil for the fryer and the small items that go on every plate. Recost when supplier prices change, not once a year.
2. Turn plate cost into food cost percentage
Food cost percentage is the share of the menu price that goes on ingredients. Divide the plate cost by the selling price, excluding any sales tax. A food cost of 28 to 35 percent is a common target for full-service restaurants, though it varies with the concept and the menu. The food cost percentage calculator gives the percentage, the gross profit per plate and the price needed to hit a target food cost. Look at the gross profit in money too: a dish with a higher percentage can still earn more per plate than a cheap one, and it is the money that pays the rent.
3. Read labour as a share of sales
Labour is the other large cost, and it is the one you control each week through the rota. Total the wages for the schedule, including employer costs such as payroll taxes, holiday pay and any benefits, and compare it with the sales you expect for the same period. The labor cost percentage calculator shows the labour cost, its share of projected sales and the hours a target percentage allows. Use it before the rota is published, not after the week is over, so a quiet forecast leads to a lighter schedule rather than a bad month.
4. Combine them into prime cost
Prime cost is food plus beverage plus labour for a period. Together these are usually the largest part of a restaurant's costs, which is why owners watch prime cost more closely than either line alone. Keeping prime cost at or below roughly 60 to 65 percent of sales is a commonly quoted aim, but your own rent and overheads decide what you can afford. The prime cost calculator takes food, beverage and labour for the period and shows each one and the total as a share of sales. Work it out weekly if you can. A month is long enough for a problem to cost real money before you notice it.
5. Know how many covers the room can serve
Your sales ceiling is set by seats, opening hours and how long each table stays. Table turnover is the number of times a seat is used in a service. A room with fewer seats and faster turns can serve as many covers as a larger, slower one. The table turnover calculator takes seats, hours, average dining time and occupancy and gives turns per seat, covers per day and revenue per day at your average spend. It is a realistic check on any sales forecast: if the forecast needs more covers than the room can hold, the forecast is wrong. Feed the covers it gives into the labor cost percentage calculator to see whether the rota fits.
6. Find the break-even point
Fixed costs such as rent, insurance, loan repayments, software and salaried staff have to be paid whether or not anyone walks in. Break-even is the sales level at which the gross profit from each sale covers those fixed costs. The break-even calculator takes fixed costs, the average price and the variable cost per sale and shows the number of sales needed. Use your average spend per cover as the price and your food cost per cover as the variable cost, then compare the covers you need with the covers from the table turnover calculator. If break-even needs a nearly full room every service, the margin is too thin.
7. Make the numbers a weekly habit
None of these figures is useful once. Their value is in watching them move. Pick a day each week to update food and beverage purchases, labour and sales, and run the prime cost calculator on the result. When prime cost rises, look first at the dishes whose ingredients have gone up, using the food cost percentage calculator, and at shifts that were scheduled for a busier week than you had. If you want the whole workflow in one spreadsheet, the Restaurant Numbers Workbook on the kits page keeps recipe costs, menu pricing, labour and prime cost together so the weekly check takes minutes rather than an evening.
The mistakes that cost the most
- Costing recipes without waste. Trim and cooking loss are real cost. Ignore them and every food cost percentage looks better than it is.
- Pricing from the menu down the street. Their rent, wages and suppliers are not yours. Price from your plate cost and your target, then compare.
- Checking labour after the week is over. By then the wages are spent. Check the rota against forecast sales before it is published.
- Watching sales instead of prime cost. A record week with prime cost out of control can make less money than a quiet week run tightly.