Many restaurant owners believe they just need more customers to finally pay themselves. But if you're losing money on each guest, more volume only creates bigger losses. The real issue lies in four structural problems that need fixing before you can draw a proper salary.
Why does this happen?
The problem usually stems from one of these four causes:
- Food cost too high: Your ingredients cost more than 35% of your revenue
- Labor costs too high: Staff costs more than 30-35% of your revenue
- Prices too low: You're charging too little for your dishes
- Revenue too low: You don't have enough guests to cover all costs
⚠️ Watch out:
Many entrepreneurs think more guests will solve the problem. But if you're losing money per guest, you're just making bigger losses.
Analyze your current situation
Before you can change anything, you need to know where you stand. Gather these numbers from the past 3 months:
- Total revenue per month
- Total food purchasing costs
- Total labor costs (including yourself)
- Fixed costs (rent, energy, insurance)
- Number of covers per month
💡 Example:
Restaurant with 2,000 covers per month:
- Revenue: €60,000
- Food cost: €24,000 (40% - too high!)
- Staff: €21,000 (35%)
- Fixed costs: €12,000 (20%)
- Other: €3,000 (5%)
Result: €0 for the owner
Choose your approach
You've got three options to escape this situation. Most times you'll need a combination:
Option 1: Lower food cost
If your food cost exceeds 35%, this is where you'll find the biggest wins:
- Calculate exact cost price of your 10 best-selling dishes
- Increase portions that are under 28% food cost, reduce those above 35%
- Find cheaper suppliers for expensive ingredients
- Reduce waste through better planning
Option 2: Raise prices
This is often the quickest solution, but it takes courage. After managing kitchen operations for nearly a decade, I've seen owners wait too long on necessary price increases:
- Raise prices of dishes with food cost above 33% by €2-4
- Test first with daily specials or seasonal menu
- Communicate value: quality, fresh ingredients, craftsmanship
💡 Price increase example:
Steak from €28 to €32:
- At 50 portions per month: €200 extra revenue
- At 10% fewer sales due to higher price: still €180 extra
- Per year: €2,160 extra for this one dish
Option 3: Optimize labor costs
Take a critical look at your staffing:
- Do you work yourself in service or kitchen? Are you counting your own hours as costs?
- Can you operate with fewer staff during quiet times?
- Are there tasks that could be done more efficiently?
The break-even calculation
To be able to pay yourself €3,000 per month, you need to know how much extra revenue you need:
Formula: Extra revenue needed = Desired salary / (1 - Total cost percentage)
💡 Example calculation:
You want €3,000 per month for yourself:
- Current costs: 95% of revenue
- Desired margin: 5% for your salary
- Extra revenue needed: €3,000 / 0.05 = €60,000
That's unrealistic. You first need to lower your costs to 85%, then you need €15,000 extra revenue.
Set priorities
Always start with the biggest leak:
- Food cost above 35%? Start here - often 5-10% improvement possible
- Haven't raised prices in 2 years? Inflation has caught up with you
- Too much staff during quiet times? Plan more efficiently
- Not enough guests? Improve marketing and guest experience
⚠️ Watch out:
Don't turn all the knobs at once. Choose one action, execute it, measure the result, then the next step.
Time to stop
Sometimes the honest conclusion is that your business isn't viable. Warning signs:
- After 6 months of improvements, still no salary for yourself
- You constantly have to add personal money
- You work 70+ hours per week for less than minimum wage
- Customers leave when you raise prices as needed
Food cost calculators help you track all your numbers and quickly spot where your profit is leaking, without doing Excel calculations yourself.
How do you get out of the situation? (step by step)
Gather your numbers from the past 3 months
Write down your total revenue, food purchasing costs, labor costs and fixed costs. Calculate the percentage of each cost item. This gives you insight into where the problem lies.
Calculate the cost price of your 10 best-selling dishes
Add up all ingredients per dish and calculate the food cost percentage. Dishes above 35% food cost are losing you money. Focus first on the most popular dishes for maximum impact.
Choose one action and execute it consistently
Start with the biggest leak: usually food cost or prices too low. Raise prices of loss-making dishes by €2-4, or reduce portions. Measure the result after 1 month before taking the next step.
✨ Pro tip
Track your actual owner salary weekly for the next 4 weeks: subtract all costs from revenue and see what's left. If it's below €15 per hour worked, you need immediate action on food costs or pricing.
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
How much should I be able to pay myself?
As an owner-operator, you can expect 8-15% of your revenue as your own salary, depending on how much you work yourself. With €50,000 revenue per month, €4,000-7,500 for yourself is realistic.
What if customers leave when I raise prices?
Test small increases of €1-2 on a few dishes first. Often it's not as bad as you think. Better 10% fewer customers with profit than a full restaurant with losses.
Can I pay my staff less to save costs?
No, cutting wages isn't sustainable and often isn't possible due to collective labor agreements. Focus on efficient planning: fewer people during quiet times, combining tasks.
How long before I see improvement?
You'll see food cost reduction and price increases in your numbers within 1-2 months. More guests takes longer: 3-6 months for noticeable revenue growth.
What if my food cost is already below 30%?
Then the problem is probably prices too low or labor costs too high. Check if your prices still match the current market and if you're working efficiently enough.
Should I hire an accountant?
For basic analysis you can do it yourself. But if you're consistently losing money, a hospitality-specialized accountant can help with an objective view of your operations.
📚 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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