A monthly profit and loss analysis is your steering wheel for the next month. Many restaurant owners create the analysis, but don't use the insights to plan concrete actions. This article shows you how to go from numbers to action.
What is a profit and loss analysis?
A profit and loss analysis (P&L) shows your revenue, costs and profit over a month. It's not just a report of what happened, but especially a predictor of what will happen if you don't change anything.
💡 Example P&L restaurant (€50,000 revenue):
- Revenue: €50,000
- Food cost: €16,500 (33%)
- Labor costs: €20,000 (40%)
- Fixed costs: €8,000 (16%)
- Profit: €5,500 (11%)
From analysis to action: the 5 steering questions
Ask yourself these 5 questions with every P&L:
- Which percentage deviates more than 2% from last month?
- Which cost item can I reduce by 1% next month?
- Which revenue source can I increase by 5%?
- Where did money leak away without me noticing?
- What 3 actions will I take this week?
Food cost as a steering tool
If your food cost has risen from 30% to 33%, this means a loss of €1,500 per month at €50,000 revenue. That's €18,000 per year.
⚠️ Attention:
A 3 percentage point increase in food cost costs you €1,500 per month at €50,000 revenue. That's more than most restaurants keep as profit.
Possible causes of rising food cost:
- Supplier raised prices (without you passing it on)
- More waste due to poor planning
- Larger portions due to new chef
- More expensive ingredient without adjusting menu price
Optimizing labor costs
Labor costs between 35-45% are standard. Above 45% it becomes difficult to make a profit.
💡 Example calculation:
Revenue per day: €1,600 (at 6 days = €50,000/month)
Staff on busy day: 6 people × 8 hours × €15 = €720
Labor costs: €720 / €1,600 = 45%
Steering questions for staff:
- Can I run slow days with fewer staff?
- Which tasks can I organize more efficiently?
- Where am I working with too many people at once?
Creating a concrete action plan
Translate every deviation into a concrete action for the next month:
💡 Example action plan:
- Problem: Food cost increased from 30% to 33%
- Action: Check portion size of top 5 dishes
- Deadline: Next Tuesday
- Goal: Get food cost back to 31% next month
Digital P&L for faster steering
With an app like KitchenNmbrs you see your food cost and margins in real-time, without waiting for the monthly close. This allows you to adjust earlier and prevents problems from running through an entire month.
How do you create a P&L action plan? (step by step)
Analyze the deviations
Compare each cost item with last month. Pay special attention to deviations of more than 2 percentage points. Note the 3 largest deviations.
Find the cause for each deviation
For higher food cost: check supplier prices and portion size. For higher labor costs: count work hours and compare with revenue. Don't guess, but check the facts.
Make concrete actions with deadline
Write down one concrete action per problem with a deadline within 1 week. For example: 'Check pasta portion size on Tuesday' instead of 'reduce food cost'.
✨ Pro tip
Schedule 1 hour each month to review your P&L and determine 3 concrete actions. Restaurants that do this have on average 3-5% more profit than restaurants that only look back.
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
How often should I create a P&L?
At least monthly for steering. Many restaurants also do a weekly quick-scan of revenue, food cost and main expenses to be able to adjust faster.
What if my profit is different every month?
That's normal due to seasons and varying revenue. Look at trends over 3 months and focus on percentages instead of absolute amounts.
Which deviation should I tackle first?
Start with food cost, because it's the quickest to influence. Then labor costs on slow days. Fixed costs are harder to adjust.
Can I do this without an accountant?
Yes, you can create a basic P&L with your cash register data, purchase invoices and labor costs. For taxes you do need an accountant.
How do I know if my percentages are good?
Food cost 28-35%, labor costs 35-45%, fixed costs 15-25% are standard ranges. Profit of 8-15% is healthy for most restaurants.
📚 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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