Break-even revenue determines the minimum monthly income needed to cover all operational expenses without profit or loss. Ghost kitchens operate with a distinct cost structure compared to traditional restaurants. You'll master the calculation process through clear formulas and real-world examples.
What is break-even for a ghost kitchen?
Break-even represents the revenue point where total income matches total expenses. You generate zero profit but avoid losses. Ghost kitchens face unique cost challenges that differ significantly from traditional restaurant operations.
? Example cost structure ghost kitchen:
- Kitchen space rent: €2,500/month
- Ingredients (food cost 30%): variable
- Staff: €4,000/month
- Platform fees (20%): variable
- Packaging (3% of revenue): variable
- Other costs: €1,500/month
Total fixed costs: €8,000/month
The break-even formula for ghost kitchens
This formula accounts for delivery kitchens' specific cost structure:
Break-even revenue = Fixed costs / (1 - Variable costs %)
Variable costs include:
- Food cost percentage (typically 28-35%)
- Platform fees (15-25% of order value)
- Packaging costs (2-4% of revenue)
- Variable staffing during peak periods
⚠️ Note:
Platform fees calculate against gross order value, not net proceeds. This inflates your actual variable costs beyond initial estimates.
Step-by-step calculation
Using our previous example, here's the break-even calculation process:
? Practical example:
Fixed costs per month: €8,000
Variable costs:
- Food cost: 30%
- Platform fees: 20%
- Packaging: 3%
- Total variable: 53%
Break-even = €8,000 / (1 - 0.53) = €17,021/month
Daily break-even
Calculate your daily target by dividing monthly break-even by working days:
Daily break-even = Monthly break-even / Working days
? Calculate daily target:
€17,021 per month / 26 working days = €655 per day
At €18 average order value: 36 orders daily
Factor in seasonality and variation
Ghost kitchens experience significant revenue fluctuations. Plan with multiple scenarios:
- Slow days: 70% of average revenue
- Normal days: 100% of average revenue
- Busy days: 150% of average revenue
Ensure peak periods compensate for slower times. From analyzing actual purchasing data across different restaurant types, ghost kitchens typically see 40% revenue swings between weekdays and weekends.
Optimize platform fees
Platform fees represent your largest variable expense. Reduction strategies include:
- Implement higher minimum order values
- Develop own delivery for large orders
- Drive customers toward your website/app
- Utilize multiple platforms for negotiation power
⚠️ Note:
Platform fees become negotiable at higher volumes. Most operators secure better rates after reaching 1,000+ monthly orders.
Monitor break-even
Track weekly performance against targets:
- Compare actual revenue with break-even targets
- Verify cost percentage accuracy
- Identify top-performing days and hours
- Adjust operations based on data insights
Automated cost tracking systems provide quick break-even status visibility without manual calculations.
How do you calculate break-even for your ghost kitchen?
Gather all fixed costs per month
Add up: kitchen space rent, permanent staff, insurance, utilities and other fixed expenses. These are costs you pay every month, regardless of your revenue.
Calculate your total variable costs percentage
Add up: food cost percentage, platform fees, packaging costs and variable staff. These are costs that increase with your revenue.
Apply the break-even formula
Divide your fixed costs by (1 minus variable costs percentage). The result is your minimum monthly revenue to break even.
Translate to daily target
Divide your monthly break-even by the number of working days. Calculate how many orders this means at your average order value.
✨ Pro tip
Recalculate your break-even every 3 weeks during your first 6 months of operation. Ghost kitchen costs shift rapidly with platform fee changes and seasonal ingredient pricing fluctuations.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Calculate it yourself?
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Frequently asked questions
Are platform fees always 20% of the order value?
Should I include VAT in my break-even calculation?
What if my break-even exceeds realistic revenue targets?
Does break-even differ per platform where I sell?
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
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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