Break-Even Sales

An important figure in your restaurant's profitability is its break-even point. This amount represents the sales that you need to cover all your costs. The calculation begins with determining your variable and fixed costs.

Variable costs (e.g. food, beverage, supplies and payroll for hourly employees) can change depending on the level of sales. During a restaurant's busier months, more food and beverages are purchased and additional staff members are scheduled to work. Therefore, during such busy periods, sales and variable costs are higher than slower periods.

Fixed costs (e.g. rent, insurance, payroll for salaried employees, utilities, etc.) generally stay the same regardless of sales levels. Generally, fixed costs during busy periods are similar to fixed costs during slower periods.