How much money does your restaurant actually need to make for you to survive? Most new owners focus on breaking even, but that means working 60+ hours weekly for zero pay. You need to calculate your true viability threshold - the revenue that covers costs AND pays you properly.
The three pillars of restaurant costs
Every restaurant has three main cost categories that together consume 70-85% of your revenue:
- Food cost: 28-35% of revenue (ingredients)
- Labor costs: 25-35% of revenue (wages, payroll taxes)
- Fixed costs: 15-25% of revenue (rent, utilities, insurance)
What's left is your profit - and it needs to be large enough to live on.
💡 Example: Bistro with 40 seats
At €300,000 annual revenue:
- Food cost (30%): €90,000
- Labor (32%): €96,000
- Fixed costs (20%): €60,000
- Other costs (8%): €24,000
Owner profit: €30,000 (10%)
What is a livable income?
As a restaurant owner, you're putting in 50-70 hours weekly. Your income needs to reflect this commitment. Plan for at least:
- €3,000-4,000 net per month for yourself (€4,500-6,000 gross)
- €10,000-15,000 buffer for unexpected costs
- €5,000-10,000 for replacement investments per year
This means your restaurant needs to generate at least €70,000-90,000 profit. With a profit margin of 8-12%, you'll need €580,000-1,125,000 in revenue.
⚠️ Watch out:
Many starters only calculate break-even (covering costs). But then you're working 60 hours a week for €0. Always include a decent owner's salary.
Calculate your minimum revenue
Use this formula:
Minimum revenue = (Fixed costs + Desired income) / (1 - Food cost% - Variable costs%)
💡 Example calculation:
Desired situation:
- Fixed costs: €8,000/month (€96,000/year)
- Desired income: €5,000/month (€60,000/year)
- Food cost: 30%
- Variable costs (labor, other): 35%
Calculation: (€96,000 + €60,000) / (1 - 0.30 - 0.35) = €156,000 / 0.35 = €445,714 minimum annual revenue
Translate revenue into covers
To check if this is realistic, work backwards to number of guests:
- Average check: €25-35 per person (depending on concept)
- Occupancy rate: 60-80% of your seats on average
- Operating days: 5-6 days per week, 50 weeks per year
💡 Reality check:
€445,714 revenue at €30 average check:
- Number of covers per year: 14,857
- Per week (50 weeks): 297 covers
- Per day (6 days): 50 covers
With 40 seats this means 125% occupancy - unrealistic! You need higher revenue per cover or more seats.
What if the numbers don't add up?
If your calculation results in unrealistic numbers of guests, you have three options:
- Increase your average check: pricier dishes, better wine list, desserts
- Expand your capacity: more seats, terrace, events
- Lower your costs: cheaper location, more efficient kitchen
Many entrepreneurs choose option 3 and go bankrupt. It's the kind of thing you only learn after closing your first month at a loss - you can't cut your way to prosperity. Better to be realistic about what you can earn at a location.
Digital support for cost monitoring
To reach your minimum revenue level, you need to keep a close eye on your costs. Food cost in particular can creep up without you noticing.
A system like KitchenNmbrs helps you to:
- Automatically calculate your food cost per dish
- Pass supplier price increases through immediately
- Track your break-even point as costs change
This prevents you from unknowingly dropping below your minimum revenue level.
How do you calculate your minimum revenue? (step by step)
Inventory all your fixed costs per month
Add up: rent, utilities, insurance, depreciation, accountant, licenses. These are costs you always have, even at 0 revenue. Multiply by 12 for annual costs.
Determine your desired owner's salary per year
Plan for at least €4,500-6,000 gross per month for yourself, plus €15,000 buffer for unexpected costs. This is what you want to keep after all business expenses.
Estimate your variable cost percentages
Food cost 28-35%, labor 25-35%, other variable costs 5-10%. Add these up - what's left is your profit margin. Use the formula: (Fixed costs + Income) / (1 - Variable costs%).
✨ Pro tip
Calculate your revenue target for the next 18 months, not just year one. Most restaurants need 12-15 months to hit their stride, so plan accordingly.
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 calculation results in unrealistically many guests per day?
Then you need to adjust your concept: higher prices, more capacity, or lower costs. Many starters underestimate how much revenue they need for a livable income. You can't serve 150% of your seats - the math has to work.
How do I know if my average check is realistic?
Check comparable restaurants in your area. Casual dining: €25-35, fine dining: €50-80, lunch: €15-25. Count main course + drink + possibly appetizer/dessert.
Should I include VAT in my revenue calculation?
Yes, you calculate with revenue including VAT (what comes in). You also calculate your costs including VAT. The VAT you remit is included in your other costs.
📚 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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