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Restaurant Break-Even Calculator

Enter your total monthly fixed costs (rent, rates, insurance, loan repayments, fixed salaries), your gross profit margin percentage (revenue minus variable costs like food, beverage, and variable labor as a percentage of revenue), and your average spend per customer. The calculator shows your monthly and daily sales needed to break even, and how many covers per day that represents.

Enter your monthly fixed costs, gross margin, average spend, and trading days to find your break-even point.
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Break-even calculations are estimates based on the numbers you enter. Actual results depend on sales mix, pricing, cost management, and many other factors. This is not financial advice.

How to use this tool

  1. 1Enter your total monthly fixed costs - rent, business rates, fixed salaries, loan repayments, insurance, utilities, subscriptions, and any other costs that do not change with revenue.
  2. 2Enter your gross margin percentage - this is 100% minus your variable cost percentage. If food cost is 30% and variable labor is 20%, your gross margin is 50%.
  3. 3Enter your average spend per customer (average check or average cover).
  4. 4Enter the number of days per month you are open.
  5. 5Read the break-even monthly revenue, daily revenue, and daily covers required.

Formula used

Break-even revenue = fixed costs / gross margin percentage. Break-even covers per day = (break-even revenue / trading days) / average spend per customer. Gross margin = 1 - variable cost percentage (food cost % + variable labor %).

Example

Cafe: fixed costs 8,000/month, gross margin 65%, avg spend 12, 26 trading days

Break-even monthly revenue: 8,000 / 0.65 = 12,308. Daily revenue needed: 12,308 / 26 = 473. Covers needed: 473 / 12 = 40 customers per day. This cafe must serve at least 40 covers on every trading day just to pay its fixed costs. Any day below that is a loss day.

Restaurant: fixed costs 22,000/month, gross margin 55%, avg spend 35, 25 days

Break-even monthly revenue: 40,000. Daily revenue: 1,600. Covers: 46 per day. With 60 seats, this restaurant needs to turn over 46 covers per day on average. If weekend nights average 80 covers and weekday lunch averages 20, the operator needs to check whether the weekly average hits the daily break-even target.

Common use cases

  • Understanding exactly how many covers or how much daily revenue you need to pay all your fixed costs
  • Stress-testing a new restaurant concept before signing a lease, to check if expected volume is realistic
  • Setting a daily sales target for the front-of-house team with clear context for why it matters
  • Evaluating whether to open an additional trading day by comparing the revenue gain against any fixed cost increase
  • Planning how much revenue a new marketing campaign needs to generate to be worth running

Common mistakes

  • Including variable costs in fixed costs - food cost and variable labor fluctuate with sales and belong in the gross margin calculation, not fixed costs.
  • Using optimistic average spend - use a real trailing average from your POS data, not a hoped-for figure.
  • Ignoring seasonal variation - a break-even based on peak-season covers may not hold in a slower period. Run the calculation for your slowest month.
  • Not updating after a rent review or fixed cost change - break-even shifts whenever fixed costs change.

Frequently asked questions

What is a typical gross margin for a restaurant?

Gross margin (revenue minus variable food, beverage, and variable labor costs) typically ranges from 45% to 70% depending on concept. Quick service and counter concepts with low labor often achieve 60-70%. Full-service restaurants with higher labor as a percentage of sales typically run 50-60%. Fine dining can run 45-55% with high food cost.

What counts as a fixed cost in a restaurant?

Fixed costs are those that do not change regardless of revenue: rent, business rates or property tax, fixed management salaries, loan repayments, insurance premiums, software subscriptions, and a base level of utilities. Food cost, hourly labor wages, delivery packaging, and payment processing fees are variable - they scale with sales.

How do I use break-even to set a revenue target?

Add your desired monthly profit to your fixed costs, then divide by gross margin. For example, if fixed costs are 15,000 and you want 5,000 profit, your target revenue is (15,000 + 5,000) / gross margin %. This gives you the sales target needed to pay costs and hit your profit goal.

What if I cannot reach break-even at my current capacity?

If break-even requires more covers than your physical capacity can deliver, you need to either increase average spend (upselling, pricing), reduce fixed costs (renegotiate rent, reduce management salaries), improve gross margin (better food cost, more efficient labor), or open more trading periods. Running the numbers early is better than discovering the problem after opening.

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