How To Calculate Break Even Analysis For Restaurant

Break even analysis is a crucial tool for restaurant owners to understand the point at which their total revenue equals their total cost, i.e., the break even point. This guide will walk you through how to calculate break even analysis for your restaurant using our interactive calculator.

1. Enter your restaurant’s fixed costs (e.g., rent, utilities, salaries).
2. Enter the variable cost per unit (e.g., cost of ingredients per dish).
3. Enter the selling price per unit (e.g., price of a dish on your menu).
4. Click ‘Calculate’ to see your break even point and a visual representation.

The break even formula is:

Break Even Point (in units) = Fixed Costs / (Selling Price per Unit – Variable Cost per Unit)

Comparison of Fixed Costs in Different Restaurant Types

Average Variable Costs per Dish Type

• Regularly review and update your break even analysis to account for changes in costs and pricing.
• Use the break even point to set sales targets and plan your marketing strategies.

What is the difference between fixed and variable costs?

For more information on restaurant financial management, see the Economic Research Service and the National Restaurant Association.