How To Calculate Restaurant Revenue

Calculating your restaurant break even point will give you an idea of what revenue is needed for your business to be profitable.

How to calculate restaurant revenue. How to calculate net profit. The key to restaurant revenue management is accurately measuring revenue for a particular time interval. Luckily there are ways for brand new restaurants to calculate a decent estimate for their earnings over the first year in business. Alcohol has a tremendous profit margin that can help your restaurant increase its revenue.

You can estimate your restaurant sales on the number of seats in your dining room your check averages or even on seasonal highs and lows you can also divide your restaurant sales between food and liquor sales to determine the profitability of each. How to calculate restaurant overhead rate let s say your fixed costs for the month were 10 000 total and your restaurant is open eighty hours per week in a 31 day month. Once this figure has been calculated you get to know the number of sales you need to make a profit. Many restaurants and bars find that they can get an 80 gross profit margin from alcoholic beverages so getting a liquor license is well worth it.

When you know this metric you are better able to determine at which point it makes sense to cut costs or at which point you need to reconsider your options. Assuming you re open every day your overhead rate would be 28 23 per hour and 322 58 per day. If you can increase your sales then you will improve your restaurant s revenue. It represents the amount of revenue needed to cover the restaurant s fixed and total variable costs over a specific time period.

This calculation might not predict your exact amount of revenue for the next 12 months but it can give you a sense of where you should be and targets of average restaurant sales to aim for as you go. With a solid measurement of their revenue restaurant managers can make necessary adjustments that will boost profits. Increase your restaurant revenue. The break even point is the point at which the revenue of your restaurant equals the costs.

To improve your restaurant profit margin you ll need to influence your revenue and or expenses. For example let s say johnny s burger bar a quick service burger restaurant has 1 25 million in revenue 50 000 in gains and 1 2 million in expenses from july to. A new restaurant report from cornell s center for hospitality research shows how to make that important revenue calculation. To calculate net profit margin as for a certain time period you need the following information.

According to bloom intelligence benchmarks for a full service restaurant are as follows.