Restaurant Profitability Calculator
Monthly Profitability Overview
Total Monthly Revenue:
Monthly Food Cost (COGS):
Monthly Labor Cost:
Total Monthly Operating Costs:
Total Monthly Expenses:
Monthly Gross Profit:
Monthly Net Profit:
Net Profit Margin:
Please enter valid numbers for all fields.
"; return; } // Calculate Monthly Revenue var monthlyRevenue = averageCheck * dailyCustomers * operatingDays; // Calculate Monthly Food Cost (COGS) var monthlyFoodCost = monthlyRevenue * (foodCostPercentage / 100); // Calculate Monthly Labor Cost var monthlyLaborCost = monthlyRevenue * (laborCostPercentage / 100); // Calculate Total Monthly Operating Costs var totalOperatingCosts = rentCostMonthly + utilitiesCostMonthly + marketingCostMonthly + otherOperatingCostMonthly; // Calculate Total Monthly Expenses var totalMonthlyExpenses = monthlyFoodCost + monthlyLaborCost + totalOperatingCosts; // Calculate Monthly Gross Profit (Revenue – COGS) var grossProfit = monthlyRevenue – monthlyFoodCost; // Calculate Monthly Net Profit var netProfit = monthlyRevenue – totalMonthlyExpenses; // Calculate Net Profit Margin var netProfitMargin = (monthlyRevenue > 0) ? (netProfit / monthlyRevenue) * 100 : 0; // Display Results document.getElementById("monthlyRevenueOutput").innerText = "$" + monthlyRevenue.toFixed(2); document.getElementById("monthlyFoodCostOutput").innerText = "$" + monthlyFoodCost.toFixed(2); document.getElementById("monthlyLaborCostOutput").innerText = "$" + monthlyLaborCost.toFixed(2); document.getElementById("totalOperatingCostsOutput").innerText = "$" + totalOperatingCosts.toFixed(2); document.getElementById("totalMonthlyExpensesOutput").innerText = "$" + totalMonthlyExpenses.toFixed(2); document.getElementById("grossProfitOutput").innerText = "$" + grossProfit.toFixed(2); document.getElementById("netProfitOutput").innerText = "$" + netProfit.toFixed(2); document.getElementById("netProfitMarginOutput").innerText = netProfitMargin.toFixed(2) + "%"; document.getElementById("profitabilityResult").style.display = "block"; }Understanding Restaurant Profitability
Restaurant profitability is the ultimate measure of a restaurant's financial health and success. It determines whether your establishment is generating more revenue than it spends on operations, ultimately leading to a positive bottom line. For restaurant owners, managers, and aspiring entrepreneurs, understanding and optimizing profitability is crucial for long-term sustainability and growth.
Key Components of Restaurant Profitability
Profitability isn't just about how much money comes in; it's about how efficiently that money is managed against various costs. Here are the core elements:
1. Revenue
This is the total income generated from sales of food, beverages, and any other services. Key drivers include:
- Average Check Size: The average amount a customer spends per visit.
- Number of Customers (Covers): How many patrons you serve daily or monthly.
- Operating Days: The number of days your restaurant is open for business.
Increasing any of these factors can directly boost your top-line revenue.
2. Cost of Goods Sold (COGS) – Primarily Food Cost
For restaurants, COGS primarily refers to the direct cost of ingredients used to prepare the food and beverages sold. It's often expressed as a percentage of revenue. Managing food waste, negotiating with suppliers, and optimizing portion sizes are critical for controlling this cost.
Example: If your monthly revenue is $100,000 and your food cost percentage is 30%, your food cost for the month is $30,000.
3. Labor Costs
This includes wages, salaries, benefits, and payroll taxes for all staff, from chefs and servers to managers and dishwashers. Labor costs are typically the second-largest expense after COGS. Efficient scheduling, staff training, and managing overtime are key to keeping labor costs in check.
Example: With $100,000 in monthly revenue and a 35% labor cost percentage, your labor expenses would be $35,000.
4. Operating Expenses (Fixed & Variable)
These are all other costs associated with running the restaurant that are not directly tied to COGS or labor. They can include:
- Rent/Occupancy Costs: Lease payments, property taxes, insurance.
- Utilities: Electricity, gas, water, internet.
- Marketing & Advertising: Promotions, social media, local ads.
- Other Operating Costs: Supplies (cleaning, paper goods), repairs & maintenance, administrative fees, software subscriptions, etc.
These costs can be fixed (like rent) or variable (like some utilities or marketing spend).
Calculating Profitability
The calculator above helps you break down your restaurant's financial picture into key profitability metrics:
- Total Monthly Revenue: Your total sales for the month.
- Monthly Food Cost (COGS): The direct cost of ingredients for your sales.
- Monthly Labor Cost: The total cost of your staff.
- Total Monthly Operating Costs: The sum of your rent, utilities, marketing, and other overheads.
- Total Monthly Expenses: The sum of all your costs (Food + Labor + Operating).
- Monthly Gross Profit: Revenue minus your Food Cost (COGS). This shows how much profit you make from sales before considering labor and other operating expenses.
- Monthly Net Profit: Your total revenue minus all your expenses. This is the actual profit your restaurant makes.
- Net Profit Margin: Your Net Profit expressed as a percentage of your Total Monthly Revenue. This is a crucial indicator of efficiency. A healthy net profit margin for restaurants typically ranges from 3% to 10%, though it can vary widely by concept and location.
Using the Calculator for Better Decisions
By inputting realistic figures into this calculator, you can:
- Forecast Profitability: Estimate potential profits for a new restaurant concept or location.
- Identify Cost Levers: See how changes in food cost percentage, labor percentage, or fixed costs impact your net profit.
- Set Goals: Establish targets for average check size, customer counts, or cost reductions.
- Evaluate Performance: Compare your actual results against your calculated projections.
Regularly monitoring these metrics and making data-driven adjustments is essential for maintaining a profitable and thriving restaurant business.