A pizzeria owner checks their sales every morning, celebrating €2,800 days while panicking over €1,200 ones. But they don't know their actual break-even point is €1,850 daily. Those celebration days barely cover costs, and panic days create real losses.
What exactly is break-even?
Break-even is the revenue point where you make neither profit nor loss. All costs are covered, but nothing's left over. It's your absolute minimum to survive.
💡 Example:
Restaurant The Taste has monthly:
- Fixed costs: €8,500 (rent, insurance, depreciation)
- Variable costs: 65% of revenue (food 30%, staff 35%)
Break-even: €8,500 / (100% - 65%) = €24,286 per month
Gather your fixed costs
Fixed costs hit you every month, regardless of guest count. Add up these expenses:
- Rent and service charges - often your biggest expense
- Insurance - liability, inventory, fire
- Depreciation - kitchen equipment, furniture
- Fixed contracts - internet, phone, software
- Minimum staff costs - what you always spend, even with zero guests
⚠️ Watch out:
Only count real fixed costs. Staff costs that increase during busy periods are variable, not fixed.
Calculate your variable costs percentage
Variable costs climb with your revenue. Food cost and extra staff during rush periods make up the bulk.
💡 Example percentages:
- Food cost: 30% of revenue
- Variable staff: 25% of revenue
- Other variable costs: 5% of revenue
Total variable: 60% of revenue
So for every euro earned, 60 cents goes to variable costs. That leaves 40 cents for fixed costs and profit.
The break-even formula
Now you can calculate break-even with this formula:
Break-even = Fixed costs / (100% - Variable costs %)
Or: Break-even = Fixed costs / Contribution margin %
💡 Complete example:
Bistro The Square:
- Fixed costs: €12,000/month
- Variable costs: 68% of revenue
- Contribution margin: 32% of revenue
Break-even: €12,000 / 0.32 = €37,500 per month
At €37,500 revenue all costs are covered, but there's no profit yet.
Convert to daily revenue and covers
Monthly figures feel abstract. Convert them to daily targets:
- Daily break-even revenue = Monthly break-even / Number of opening days
- Break-even covers = Daily break-even revenue / Average bill
💡 Practical example:
Break-even €37,500/month, open 26 days:
- Daily break-even revenue: €1,442
- At €32 average bill: 45 covers/day needed
Fewer than 45 guests = loss. More than 45 guests = profit.
Check your break-even regularly
Your break-even shifts as costs rise or efficiency improves. Most kitchen managers discover too late that their break-even calculations became outdated months ago, leading to false confidence about profitability. Check quarterly at minimum:
- Have fixed costs increased? (rent hikes, new contracts)
- Has your food cost percentage changed? (supplier price increases)
- Are you working more efficiently? (less staff per euro of revenue)
⚠️ Watch out:
An underestimated break-even is dangerous. You think you're making profit while actually losing money.
Break-even as a management tool
Use break-even not just as a check, but for decisions:
- New investment? How much does your break-even increase?
- Adding staff? How much extra revenue do you need?
- Expecting a quiet month? Which costs can you temporarily reduce?
With a system like KitchenNmbrs you see actual food cost directly and can estimate more accurately what your variable costs really are.
How do you calculate your break-even? (step by step)
Add up all your fixed monthly costs
Make a list of rent, insurance, depreciation and fixed contracts. Also include minimum staff costs that you always have, regardless of busy times.
Calculate your variable costs percentage
Add up food cost, variable staff and other costs that rise with revenue. Divide this by your average monthly revenue to get the percentage.
Apply the break-even formula
Divide your fixed costs by (100% minus variable costs percentage). The result is your monthly break-even revenue.
Convert to daily targets
Divide your monthly break-even by the number of opening days. Divide the daily amount by your average bill to get the number of covers needed per day.
✨ Pro tip
Track your actual daily revenue against your break-even target for 90 consecutive days. You'll spot patterns showing which days consistently underperform and need attention.
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 variable costs percentage fluctuates every month?
Take the average of the last 6 months. Large fluctuations often indicate poor control over food cost or inefficient staff deployment.
Should I include depreciation if I don't have a bookkeeper?
Yes, even without formal recording. Your kitchen equipment wears out and needs replacement. Calculate roughly 10-15% of purchase value annually.
How often should I recalculate my break-even?
Quarterly minimum, or immediately after major changes like rent increases, new staff, or significant supplier price rises.
Is break-even the same as the point where I can pay myself?
No, break-even means zero profit. To pay yourself a salary you need revenue above your break-even point.
What if I'm well above break-even but still have no money?
Money is leaking somewhere you don't see. Often from excessive food cost, underestimated staff costs, or forgotten expenses.
Can I use last year's break-even calculation for this year?
Not advisable. Costs change constantly - rent increases, supplier prices rise, minimum wages go up. Always use current figures.
Should seasonal restaurants calculate break-even differently?
Yes, calculate separate break-evens for high and low seasons. Your fixed costs stay the same, but variable costs and revenue patterns change dramatically.
📚 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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