Restaurant Break-Even Calculator

A higher Food Cost % shrinks the Contribution Margin -- the share of each sales dollar available to cover fixed costs after paying for food -- so it takes more total revenue to generate the same dollar amount toward rent, labor, and overhead. At a 40% food cost the contribution margin is 60%, versus 70% at a 30% food cost, so the same $40,000 in fixed costs requires roughly $66,700 of revenue instead of about $57,100 -- food cost control has a direct, amplified effect on the break-even target.

Contribution margin is the portion of revenue left after variable costs -- here, food cost -- that goes toward covering fixed costs and, beyond break-even, profit. Fixed costs alone don't tell you how much revenue you need, because every dollar of sales also carries a food cost; dividing fixed costs by the contribution margin (1 minus food cost as a fraction) accounts for that leakage and gives the true revenue figure needed to clear all costs.

Prime Cost Percent here is computed specifically AT the break-even revenue point, combining Food Cost % with Monthly Labor Cost as a share of that break-even revenue -- it is not your actual prime cost at whatever revenue you're currently doing. If your real monthly revenue is above break-even, your actual prime cost percentage will typically run lower than this figure, since fixed labor costs get spread across more sales dollars.

No -- Monthly Fixed Costs and Monthly Break-Even Revenue don't depend on Days Open at all, since rent, labor, and overhead are monthly totals regardless of how many days the restaurant operates. Days Open only affects how that same monthly revenue target gets spread into a Daily Revenue Needed and Daily Covers Needed figure -- opening more days spreads the same monthly target across more days, lowering the daily target per day but not the monthly total.