Here's what most restaurant owners get wrong: they treat their P&L like a report card instead of a GPS for next month. You read the numbers, feel good or bad about them, then file it away. But your P&L is actually screaming directions at you - if you know how to listen.
Your P&L as an action dashboard
A P&L report shows you what happened. But the real value is in what it tells you about what you need to do. Don't just look at the bottom line, but at the relationships between cost items.
💡 Example P&L analysis:
Restaurant with €45,000 revenue last month:
- Food cost: €15,750 (35% - too high)
- Staff: €13,500 (30% - good)
- Other costs: €9,000 (20% - good)
- Profit: €6,750 (15% - can be better)
Action: Focus on reducing food cost to 30% = €2,250 extra profit
The 4 critical ratios to check
1. Food cost percentage
Divide your total ingredient purchases by your revenue (excl. VAT). Target: 28-35%.
2. Staff cost percentage
Divide your total payroll by your revenue. Target: 25-35%.
3. Revenue per square meter
Divide your monthly revenue by your floor space. This shows your efficiency.
4. Average check value
Divide your revenue by number of covers. Is this rising or falling?
⚠️ Note:
Always calculate with revenue excl. VAT for your percentages. Otherwise your costs will look lower than they actually are.
From analysis to action plan
For every deviation you see, ask yourself these questions:
- Why is this percentage higher/lower than last month?
- What 3 actions can I take this month to improve this?
- What will I do differently in the kitchen or with purchasing?
- How will I measure if my actions work?
Food cost too high? These actions work
If your food cost is above 35%, tackle these points - it's a pattern we see repeatedly in restaurant financials where owners know the numbers but don't act on them:
💡 Example food cost action plan:
Food cost from 37% to 32% in one month:
- Check portion sizes of your top 5 dishes (often too generous)
- Recalculate dish costs with current price increases
- Replace 2 expensive ingredients with cheaper alternatives
- Improve trim loss through better planning
Result: 5% food cost savings = €2,250 extra profit per month
Optimizing staff costs
Staff costs above 35%? Look at these factors:
- Productivity per hour: How much revenue per hour worked?
- Peak hours vs. quiet times: Are you scheduling staff smartly?
- Sick leave: High costs from replacement staff?
- Overtime: Structural or occasional?
Setting up a monthly routine
Make your P&L analysis a monthly ritual:
- Week 1 of the month: Receive and analyze P&L
- Week 1: Determine top 3 action points
- Week 2-3: Execute actions and adjust
- Week 4: Check mid-month if it's working
💡 Example monthly planning:
March P&L shows 36% food cost (too high):
- Week 1 April: Recalculate all recipes with current prices
- Week 2 April: Adjust portion sizes for 3 top dishes
- Week 3 April: Test new menu prices
- Week 4 April: Measure food cost % from first 3 weeks
Goal: May P&L shows 32% food cost
Real-time tracking support
A P&L gives you the big picture, but you need more for the details. Tools like KitchenNmbrs show your real-time food cost per dish, so you don't have to wait until the monthly P&L to adjust. You can check daily if your actions are working.
How do you use your P&L as a management tool? (step by step)
Calculate the critical percentages
Divide food cost by revenue (excl. VAT), divide staff costs by revenue, and calculate your average check value. Compare with previous months and with standard percentages for your type of business.
Identify the biggest deviation
Which percentage deviates most from your norm? Focus on the cost item that has the biggest impact on your profit. Usually this is food cost or staff.
Create an action plan for this month
Determine 3 concrete actions you'll take this month to correct the deviation. Write down when you'll execute each action and how you'll measure the result.
Measure weekly if it's working
Don't wait until the next monthly P&L. Measure each week if your actions are having an effect. Check your food cost, count your covers, monitor your average check value.
✨ Pro tip
Track your top 8 dishes' individual food costs weekly, not just monthly totals. If 2-3 dishes spike above 38% food cost, fix those specific recipes within 10 days and watch your entire P&L improve.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
What if my food cost varies wildly every month?
That's normal due to seasons and price fluctuations. Look at the trend over 3-6 months. If it's consistently rising, you need to take action.
Which percentage is more important: food cost or staff costs?
Both are crucial, but food cost you can adjust faster. Reducing staff costs takes more time and planning. Start with food cost for quick results.
Can I compare my P&L with other restaurants?
General benchmarks are useful, but every business is different. Compare mainly with yourself: are you better or worse than previous months? That's more relevant than someone else's numbers.
What if my revenue drops but my costs stay the same?
Then your cost percentages automatically rise. Focus on variable costs (food cost) that move with revenue. Fixed costs (rent, insurance) stay the same.
📚 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.
Calculate your break-even point in seconds
Food cost is just one part of the story. KitchenNmbrs also helps you structure labor costs and other expenses for a complete break-even overview. Start free.
Start free trial →