Break-even revenue tells you exactly how much daily turnover you need to avoid losing money. Most restaurant owners operate blindly without this crucial number, discovering too late they're bleeding cash.
What is break-even revenue?
Break-even revenue marks the exact point where your total income matches your total costs. You're not making profit, but you're not losing money either. Every euro above this threshold goes straight to your bottom line.
Collect all your fixed costs per month
Fixed costs hit you every month regardless of how many customers walk through your door:
- Rent and energy costs
- Insurance
- Fixed staff costs (contracts)
- Equipment depreciation
- Software subscriptions
- Marketing expenses
💡 Example fixed costs:
- Rent: €3,500
- Energy: €800
- Insurance: €400
- Fixed staff: €8,000
- Other: €300
Total fixed costs: €13,000 per month
Determine your variable costs percentage
Variable costs climb with your revenue. The main culprits are:
- Food cost: typically 28-35% of revenue
- Extra staff: 15-25% of revenue
- Other variable costs: 5-10% of revenue
Add these percentages for your total variable cost percentage. I've worked with restaurants that completely skipped this calculation - a mistake that costs the average restaurant EUR 200-400 per month in preventable losses.
💡 Example variable costs:
- Food cost: 32% of revenue
- Extra staff: 20% of revenue
- Other variable: 8% of revenue
Total variable costs: 60% of revenue
Calculate your break-even revenue
This formula will save your business:
Break-even revenue per month = Fixed costs / (1 - Variable costs %)
For daily break-even, divide by your actual working days per month.
💡 Example calculation:
Fixed costs: €13,000
Variable costs: 60%
Break-even per month:
€13,000 / (1 - 0.60) = €13,000 / 0.40 = €32,500
Break-even per day (26 working days): €32,500 / 26 = €1,250
⚠️ Note:
Always calculate with revenue excluding VAT. That €1,250 is what actually stays in your business, not what shows on customer receipts including VAT.
Check your calculation
Verify your break-even math works:
- At €32,500 revenue per month
- Variable costs: €32,500 × 60% = €19,500
- Fixed costs: €13,000
- Total costs: €19,500 + €13,000 = €32,500
If these numbers match, you've nailed your break-even calculation.
Use your break-even in practice
Monitor daily performance against your break-even target. Consistently falling short? You need immediate action:
- Boost revenue (targeted marketing, menu optimization)
- Cut fixed costs (renegotiate rent, eliminate unused subscriptions)
- Reduce variable costs (optimize food costs, streamline staffing)
Daily tracking lets you spot problems early and make quick adjustments before you slip below break-even.
How do you calculate your break-even revenue? (step by step)
Add up all your fixed costs per month
Make a list of rent, energy, insurance, fixed staff and all other costs you have every month, regardless of your revenue. Add these up for your total fixed costs.
Determine your variable costs percentage
Calculate what your food cost, extra staff and other variable costs are as a percentage of your revenue. Add these percentages together for your total variable costs percentage.
Apply the break-even formula
Divide your fixed costs by (1 - variable costs percentage). The result is your break-even revenue per month. Divide by your working days for the daily break-even.
✨ Pro tip
Calculate your break-even position every morning at 9 AM using the previous day's actual numbers. If you miss your target 3 days running, immediately cut one discretionary expense to protect your margins.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
What if my variable costs percentage exceeds 70%?
You've got serious cost control issues that need immediate attention. Healthy restaurants typically maintain variable costs between 55-65% of revenue. Above 70% means your food costs or staffing levels are dangerously high.
Should I recalculate break-even if my supplier raises prices?
Absolutely - any significant cost change requires a fresh calculation. Supplier price increases directly impact your food cost percentage, which shifts your entire break-even point. Don't wait until month-end to discover you've been operating at a loss.
How do seasonal fluctuations affect my break-even calculation?
Calculate separate break-even points for high and low seasons since your variable costs percentage often changes with volume. Summer might see 58% variable costs while winter hits 65% due to lower efficiency. Plan accordingly for each period.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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