Your break-even point is the level of sales at which every cost is paid and nothing is left. Below it you lose money; above it, part of every sale becomes profit. Divide it by the days you open to get a daily target your team can see.
Split your costs in two
| Stay the same each month | Rise and fall with sales |
|---|---|
| Rent and service charges | Food and drink |
| Salaries of the core team | Packaging |
| Loan payments, insurance | Card and payment fees |
| Software, licences, basic power | Delivery platform commission |
Hourly or extra staff sit in between. Put them where they behave in your outlet: if you add shifts when it gets busy, count them with the costs that rise with sales.
How to calculate break-even
A worked example
| Line | Amount |
|---|---|
| Rent | 8,000 |
| Salaries and wages | 15,000 |
| Electricity, gas and water | 2,500 |
| Other fixed costs | 3,500 |
| Fixed costs each month | 29,000 |
| Costs that rise with sales | 38% of sales |
| Break-even sales each month | 46,774 |
| Each day, open 30 days | 1,559 |
| Guests a day, at an average spend of 25 | 63 |
If this outlet sells 60,000 in a month, it keeps 62% of every sale after the costs that rise with sales: 37,200. Take away the fixed 29,000 and 8,200 is profit.
How to bring your break-even point down
- Lower the share that rises with sales. Two points off food cost lowers break-even straight away.
- Raise the average spend. A starter, dessert or drink with each order means fewer guests are needed.
- Match the core team to real footfall. Salaries are the largest fixed cost after rent.
- Negotiate rent before you sign. It is the one cost you cannot fix later.
- Watch delivery share. A bigger share of platform orders raises the costs that rise with sales.
Turn it into a daily number
A monthly break-even number arrives too late. Put the daily target on the screen your manager sees at closing: today's sales against the daily break-even. A week below it is a warning while there is still time to act.
Try it on your own numbers: Break-even calculator, free and with no sign-up.
See it every day, not every month
Peasily shows the net profit of every outlet every morning, so you see how far above or below break-even each outlet ran yesterday.
Screens from the Peasily demo brand.
Questions
What is a restaurant break-even point?
It is the level of sales at which the restaurant makes neither a profit nor a loss: every fixed cost is paid and nothing is left over.
How long does a new restaurant take to break even?
It varies widely by location, format and how much was spent to open. Tracking the daily break-even from the first week shows how close you are every day.
Should I include my own salary?
Yes, if you work in the business. A break-even that only works when the owner works for free is not a real break-even.
See your own numbers in Peasily
We'll walk you through it with your real menu and outlets.