Rising revenue doesn't always mean better profits – five key metrics reveal your restaurant's true financial progress. Many owners celebrate increased sales while overlooking rising costs that quietly erode margins. These calculations take just 10 minutes but show exactly where you stand compared to last year.
The 5 most important KPIs to compare
Compare these figures with the same period last year to gauge your restaurant's true performance:
- Revenue per square meter - corrects for expansion
- Average check value - are you earning more per guest?
- Food cost percentage - have your margins improved?
- Labor costs as % of revenue - are you working more efficiently?
- EBITDA (profit before interest, tax, depreciation) - the real profit
💡 Example comparison:
Restaurant of 100m² - comparison March 2024 vs March 2023:
- Revenue: €45,000 vs €42,000 (+7%)
- Revenue per m²: €450 vs €420 (+7%)
- Average check: €32 vs €28 (+14%)
- Food cost: 29% vs 32% (improved!)
Conclusion: Restaurant is performing significantly better
Calculate revenue per square meter
This metric corrects for expansions or renovations. Added more tables? You'll need proportionally higher revenue to maintain performance.
Formula: Monthly revenue / Number of square meters of guest space
💡 Example:
Restaurant 80m² guest space:
- March 2024: €38,400 / 80m² = €480/m²
- March 2023: €35,200 / 80m² = €440/m²
- Improvement: +9%
Standard revenue per m² ranges from €300-600 monthly, depending on concept and location.
Analyze average check value
Rising check values indicate guests spend more per visit – either through higher prices or additional orders. This metric's particularly revealing for pricing strategy effectiveness.
Formula: Total revenue / Number of transactions (checks)
⚠️ Watch out:
Declining check value with rising revenue means more guests but less per-person spending. Investigate: have prices become prohibitive for larger orders?
Compare food cost percentage
Food cost percentage reveals if margins improved or deteriorated. A pattern we see repeatedly in restaurant financials shows declining food costs often drive the biggest profit improvements year-over-year.
Formula: (Total food purchase costs / Revenue excl. VAT) × 100
💡 Example food cost comparison:
- March 2024: €12,800 purchases on €41,284 revenue excl. VAT = 31%
- March 2023: €13,440 purchases on €38,532 revenue excl. VAT = 35%
- Improvement: 4 percentage points better
Annually this saves 4% × €500,000 = €20,000 extra profit
Labor costs as percentage
Labor efficiency shows up clearly in this percentage. Generate the same revenue with fewer hours? Your profit margins expand significantly.
Formula: (Total labor costs / Revenue) × 100
Standard labor costs run 25-35% of revenue. Above 35% makes profitability challenging for most concepts.
Calculate EBITDA
EBITDA represents your operating profit before interest, tax, and depreciation. It's the clearest indicator of your restaurant's ability to make money independently.
Formula: Revenue - Food cost - Labor costs - Other operating costs
💡 EBITDA example:
March 2024 vs 2023:
- Revenue: €45,000 vs €42,000
- Food cost: €13,050 vs €14,700
- Labor: €13,500 vs €12,600
- Other: €8,500 vs €8,000
EBITDA: €9,950 vs €6,700 (+48%!)
Track KPIs digitally
Manual calculations consume time and invite errors. Digital tools automate these key metrics, freeing up time for guest service and operations.
Apps automatically calculate food cost percentages, average check values and other critical figures. You'll spot performance trends at a glance rather than spending hours on spreadsheets.
How do you calculate this? (step by step)
Gather figures from both periods
Get your revenue figures, purchase invoices and labor costs from the same month this year and last year. Use the same period to exclude seasonal influences.
Calculate the 5 most important KPIs
Work out: revenue per m², average check value, food cost %, labor costs % and EBITDA for both periods. Use a calculator or spreadsheet to avoid errors.
Compare and analyze the differences
Look at which KPIs have improved and which have worsened. Rising revenue with rising food cost can mean you're making less profit despite more sales.
✨ Pro tip
Calculate your EBITDA for the last 6 consecutive months and compare it to the same 6-month period from the previous year. This smooths out seasonal fluctuations and gives you the most reliable picture of actual financial progress.
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
Which period should I compare for the most accurate analysis?
Always compare identical months (March 2024 vs March 2023) to eliminate seasonal variations. For broader trends, compare quarters or half-years using the same time periods.
What if my revenue increases but profit actually decreases?
Your costs have risen faster than revenue – a common trap. Focus on food cost and labor percentages first, as supplier price increases and inefficient scheduling typically drive this issue.
What constitutes a healthy EBITDA for restaurants?
Target 10-20% of revenue for sustainable EBITDA. Below 10% leaves little room for investments, equipment repairs, or emergency buffers.
Should VAT be included in these calculations?
Calculate food cost percentage excluding VAT always. For other metrics like revenue per m², include VAT consistently in both comparison periods to maintain accuracy.
📚 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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