Calculate the breakeven point of your restaurant: the complete method with examples and figures

The break-even point (or breakeven point) is the level of revenue from which you begin to generate profits. Below that, you lose money. Above that, you are profitable. It’s the most important calculation in restaurant management, yet many owners don’t precisely know where this threshold lies. Knowing it allows you to set concrete monthly goals and to quickly know if a month will be unprofitable.

The basic formula: Break-even point = Fixed costs / Variable margin rate on variable costs. Fixed costs are those that do not vary with your activity level: rent, salaries, social security, insurance, software subscriptions, equipment installments. Variable costs are those that vary proportionally to sales: raw materials, packaging, platform commissions. Variable margin rate on variable costs = 1 - (variable costs / revenue).

For a medium-sized delivery restaurant: Fixed monthly costs: rent €1,800 + salaries + overheads €4,500 + insurance + miscellaneous €600 = €6,900. Variable costs: raw materials 30% + packaging 3% + platform commissions 28% = 61% of turnover (CA). Variable cost margin rate = 1 - 0.61 = 0.39 (or 39%). Break-even point = €6,900 / 0.39 = €17,692 of monthly turnover minimum.

This means that this restaurant must generate at least €17,692 of gross monthly turnover to cover all its expenses. If its average basket is €22, it must generate €17,692 / €22 = 804 orders per month, or approximately 26 orders per day. This figure becomes the daily operational target of the team. Below 26 orders per day results in a loss.

For restaurants with multiple channels (dining room + delivery), the calculation must be done separately for each channel because the cost structures and margin rates are different. A restaurant with a dining room benefits from a higher variable cost margin (no platform commission) but has larger fixed costs (dining room staff, equipment). The cross-analysis of these calculations can reveal that one channel is profitable and the other is deficitary, guiding resource allocation decisions.

Recalculate your breakeven point at every significant change: rent increase, hiring, equipment investment, changes to commissions. It’s a living tool that must be updated regularly. For new restaurants, the breakeven point calculated before opening is also one of the key criteria for evaluating the viability of the project: if reaching this point seems impossible given the local market and competition, it’s better to revise the business model before investing.