Picture this: you're working 70-hour weeks but still can't figure out why your restaurant isn't profitable. The missing piece? Your break-even point - the exact revenue needed to cover every cost. Most owners operate blind to this critical number.
What is the break-even point?
The break-even point is the revenue at which your profit and loss are zero. You've generated just enough revenue to pay all your fixed and variable costs. Everything above this point is profit, everything below is loss.
💡 Example:
Restaurant De Smulhoek has these monthly costs:
- Rent: €3,500
- Staff: €8,000
- Energy: €800
- Insurance: €400
- Other fixed costs: €1,300
Total fixed costs: €14,000 per month
Variable costs (food cost): 32% of revenue
Break-even point: €14,000 ÷ 0.68 = €20,588 per month
Fixed costs vs. variable costs
For the calculation, you'll need to split your costs into two groups:
Fixed costs stay the same, regardless of how much you sell:
- Rent and lease
- Base staff salaries
- Insurance
- Energy (base consumption)
- Phone, internet, software
- Depreciation
Variable costs increase with your revenue:
- Ingredients (food cost)
- Beverage costs
- Credit card fees (percentage of revenue)
- Extra staff during busy times
⚠️ Note:
Staff often falls somewhere between fixed and variable. You have a fixed team, but you hire extra people during busy times. Count the fixed team in your fixed costs.
The break-even formula
The formula is straightforward but powerful:
Break-even revenue = Fixed costs ÷ (1 - Variable costs %)
Where variable costs % = variable costs divided by revenue.
💡 Example calculation:
Café Het Pleintje:
- Fixed costs per month: €9,500
- Food cost: 30% of revenue
- Beverage costs: 22% of revenue
- Total variable costs: 52% of revenue
Calculation: €9,500 ÷ (1 - 0.52) = €9,500 ÷ 0.48 = €19,792
Break-even point: €19,792 per month
Break-even point per day and per week
For practical use, you convert this to daily figures:
- Per day (7 days open): Monthly amount ÷ 30 days
- Per day (6 days open): Monthly amount ÷ 26 days
- Per week: Monthly amount ÷ 4.33 weeks
💡 Practical example:
Restaurant with break-even of €18,000 per month, open 6 days:
- Per day: €18,000 ÷ 26 = €692
- Per week: €18,000 ÷ 4.33 = €4,156
This means: every day below €692 revenue contributes to losses.
What do you do with this information?
Your break-even point helps with important decisions - it's a pattern we see repeatedly in restaurant financials where owners who track this number make smarter operational choices:
- Closing days: Is it worth being open on Monday?
- Staff scheduling: How much staff can you deploy during low revenue?
- Marketing budget: How much can you spend to attract more guests?
- Price adjustments: What happens if you raise prices by 5%?
⚠️ Note:
Your break-even point changes as your costs change. Check it at least quarterly, especially after wage increases or rent hikes.
Lowering your break-even point
You can lower your break-even point by:
- Lowering fixed costs: Cheaper rent, energy savings, more efficient staffing
- Lowering variable costs: Better food cost, smarter purchasing
- Increasing margin: Higher prices or cheaper ingredients
A 1% reduction in food cost can lower your break-even point by hundreds of euros per month. Tools like KitchenNmbrs can help track these percentages more accurately.
How do you calculate your break-even point? (step by step)
Gather all your fixed costs per month
Add up all costs you have every month, regardless of your revenue: rent, base salaries, insurance, energy, phone, software. These are your fixed costs.
Calculate your variable costs percentage
Divide your total variable costs (food cost + beverage costs + credit card fees) by your average monthly revenue. This gives you your variable costs percentage.
Apply the break-even formula
Divide your fixed costs by (1 minus your variable costs percentage). The result is your break-even point in euros per month.
Convert to daily and weekly figures
Divide your monthly break-even by the number of working days to get your daily break-even. This is more practical for daily monitoring.
✨ Pro tip
Track your break-even performance weekly for 8 consecutive weeks to spot patterns. If you're consistently 15% below break-even on Tuesdays, consider adjusting staff or closing that day entirely.
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 costs differ every month?
Take the average of the last 6 months. This reveals seasonal fluctuations in energy costs and staff costs. It's more accurate than using just one month's data.
Should I include my own salary in the calculation?
Yes, if you reserve a fixed amount per month for yourself - that's a fixed cost. If you only work for profit, then no.
What if I'm above my break-even point but don't see any profit?
You've probably missed costs in your calculation or your variable costs are higher than expected. Check your food cost and other percentages first. Hidden costs often lurk in credit card fees or overtime pay.
📚 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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