Profit is what remains after you've paid all costs. Many restaurant owners think they're making profit because the place is packed, but at the end of the...
Maria's restaurant serves 200 customers daily, yet she can't afford her own salary. She's confused because her dining room stays packed, but her bank account tells a different story. The problem? She's confusing revenue with profit.
What exactly is profit?
Profit equals revenue minus every single expense. But restaurants have sneaky costs that don't show up until month-end.
💡 Example:
Restaurant with €50,000 revenue per month:
- Revenue: €50,000
- Ingredients (food cost): €15,000
- Staff: €18,000
- Rent: €4,500
- Gas/water/electricity: €1,200
- Other costs: €3,800
Profit: €50,000 - €42,500 = €7,500 (15%)
Gross profit vs. net profit
You need to understand both numbers:
- Gross profit (or gross margin): Revenue minus only the ingredients
- Net profit: Revenue minus all costs
Gross profit tells you if your dishes work. Net profit reveals what you actually take home.
💡 Example gross vs. net:
With €50,000 revenue and €15,000 ingredients:
- Gross profit: €35,000 (70%)
- Net profit: €7,500 (15%)
Your gross margin looks healthy, but operating expenses eat most of it.
Which costs do you include?
Every expense counts toward your true profit calculation:
- Direct costs: Ingredients, packaging, napkins
- Staff costs: Wages, social charges, sick leave
- Fixed costs: Rent, insurance, subscriptions
- Variable costs: Gas, water, electricity, cleaning supplies
- Depreciation: Kitchen equipment, furniture
⚠️ Watch out:
Don't forget your own salary! Many owners skip this step, making their profit look better than reality.
Profit percentages in hospitality
Normal profit varies by restaurant type:
- Fine dining: 8-15% net profit
- Casual dining: 6-12% net profit
- Fast casual: 10-18% net profit
- Cafés: 5-12% net profit
These are benchmarks from tracking this across dozens of restaurants. Healthy net profit typically sits between 8% and 15%.
💡 Example profit check:
With €40,000 monthly revenue:
- 10% profit = €4,000 per month
- 5% profit = €2,000 per month
- 0% profit = break-even
Below 5%? You're basically working for free.
Why don't many hospitality businesses make profit?
The usual profit killers:
- Food cost creep: Above 35% becomes dangerous
- Overstaffing: Labor costs above 35% of revenue
- Portion drift: Kitchen staff serving larger portions than planned
- Waste blindness: Products spoiling unnoticed
- Stale pricing: Not adjusting for rising ingredient costs
⚠️ Watch out:
A packed dining room can still lose money. If your food cost runs too high, each customer actually costs you money.
Getting control over your profit
Smart restaurant owners track their numbers automatically. You need visibility into:
- Real food cost per dish
- Which menu items drive profit
- Where money disappears
- How price changes affect margins
This gives you control over margins without endless spreadsheet calculations.
How do you calculate your profit? (step by step)
Calculate your total revenue
Add up all income from a period (for example a month). This is your revenue excluding VAT, because VAT must be paid to the tax authorities.
Sum up all costs
Make a list of all expenses: ingredients, staff, rent, energy, insurance, depreciation. Don't forget any cost item, including your own salary.
Subtract costs from revenue
Profit = Revenue - Total costs. Divide this by your revenue and multiply by 100 for your profit percentage. At 8-15% you're doing well.
✨ Pro tip
Calculate your profit per seat-hour, not just monthly totals. If you're making less than €8-12 profit per occupied seat per hour, your pricing or costs need immediate attention.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
Should I include my own salary in the costs?
Absolutely yes. If you don't count your own time, your profit appears higher than it actually is. Calculate at least €3,000-4,000 per month for yourself as a baseline.
Can I make profit with a food cost of 40%?
That becomes extremely difficult. With 40% food cost, there's too little left for staff, rent and other operating expenses. Try to stay below 35% for sustainable profits.
Why am I not making profit while my place is packed?
A full restaurant doesn't guarantee profit. Often the food cost or staff costs run too high, or portion sizes drift upward so you lose money on each guest despite the busy atmosphere.
📚 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.
Calculate it yourself with KitchenNmbrs
All the formulas you learn here — KitchenNmbrs calculates them automatically. Enter your ingredients and instantly see your food cost, margin, and selling price. Try it free for 14 days.
Start free trial →