Your daily break-even is the number of items you need to sell in one trading day to cover what it costs just to turn up. The formula is daily costs ÷ contribution per item, rounded up. If your daily costs are $75 and each hot dog leaves you $3.30, you need 23 hot dogs. Everything you sell beyond that is what you keep.
Your daily costs
These are the costs you pay whether you sell 10 items or 100. For a cart or a street stall they are usually:
- The pitch fee for the day.
- Fuel to get there and back with the cart or gazebo.
- Propane or charcoal. If a tank lasts several days, divide its cost by those days.
- Frying oil you change every session or every few sessions.
- A helper's wages, if you have one.
- Cart storage or a commissary kitchen, if you pay by the day or can split it per day.
- Ice, water, bin bags and anything else you buy every day to operate.
Use your receipts, not a guess. If you are not sure which side something goes on, the guide to fixed and variable costs explains it. Costs you pay monthly or yearly (the cart, the gazebo, a licence) can become a daily cost too: divide them by the days you trade.
Contribution per item
This is the selling price minus what you spend on that one item: ingredients, packaging and the card fee. It is what each sale puts towards the day. The guide to contribution margin shows how to work it out properly for each product.
Weigh what you serve. If "a portion" of onions is sometimes a pinch and sometimes a fistful, your real contribution is lower than you think.
The formula, and why you round up
Items to cover the day = daily costs ÷ contribution per item
The answer is almost never a whole number. If it comes out at 22.7, selling 22 still loses a little; you need 23. Always round up.
Then divide by the hours you really sell. If you trade for 5 hours, 23 items is 4.6 an hour: about 5. That tells you whether the number is possible at your pace.
Worked example: a hot dog cart
You sell hot dogs from a cart outside a park, 11 am to 4 pm. A hot dog with onions and sauces is $5. These are your numbers.
Cost per hot dog
| Item | Cost |
|---|---|
| Sausage | $0.90 |
| Bun | $0.35 |
| Onions, mustard, ketchup and relish | $0.20 |
| Napkin, tray and foil | $0.10 |
| Card fee (example rate 3% of $5) | $0.15 |
| Total | $1.70 |
Contribution per hot dog: 5.00 − 1.70 = $3.30.
Daily costs
| Item | Cost |
|---|---|
| Pitch fee | $40 |
| Propane ($32 refill that lasts 4 days) | $8 |
| Fuel | $12 |
| Cart storage | $15 |
| Total | $75 |
Break-even: 75 ÷ 3.30 = 22.7, so 23 hot dogs. Over 5 hours, about 5 an hour.
Break-even with your own pay
At 23 hot dogs you cover the day but work for free. Decide what you want to pay yourself per day, counting the time you spend shopping, prepping onions and cleaning the cart. Say $120:
(75 + 120) ÷ 3.30 = 59.1, so 60 hot dogs. Over 5 hours, 12 an hour.
That is the number that really matters. If a normal day brings 45 hot dogs, you cover the day and pay yourself only part of what you wanted. The guide to paying yourself helps you set that figure.
When you sell more than one thing
Your cart also sells canned drinks at $2. Each can costs you $0.60 from the cash and carry, plus a $0.06 card fee at the same example rate, so it leaves 2.00 − 0.66 = $1.34.
On a normal day you sell 25 cans: 25 × 1.34 = $33.50 of contribution. That covers part of the day, so subtract it before you divide:
- Without your pay: (75 − 33.50) ÷ 3.30 = 12.6, so 13 hot dogs.
- With your pay: (195 − 33.50) ÷ 3.30 = 48.9, so 49 hot dogs.
The drinks bring your daily target down from 60 hot dogs to 49. That is why it pays to work out the combos and add-ons at your stall: an item that takes seconds to serve can carry a good part of the day.
Use the number of drinks from a normal day in your sales log, not your best day.
What to change if you cannot reach it
If your break-even with pay is above what you sell on a normal day, you have four levers:
- Price. At $5.50, the card fee becomes $0.165 and the contribution about $3.79. The target with pay and drinks falls to (195 − 33.50) ÷ 3.79 = 42.6, so 43 hot dogs.
- Cost per item. Buying sausages and buns by the case from a wholesaler rather than the supermarket can lower the cost. Do the sum with your own prices.
- Daily costs. A cheaper pitch or storage arrangement lowers every target. Adding a helper raises it; check whether a helper is worth it before you hire, using the extra sales you expect at the rush.
- Days and location. Some days never get there. Your sales log, used as in weather and demand planning, tells you which ones.
This is the daily version of the break-even for any business. To see how it fits with serving speed, waste and weather, the guide to street food profit has the full method.
Do it with the calculator
Get the cost of each item from the food cost calculator, then put that cost, your price and your daily costs into the break-even calculator to see how many you need to sell per day.
Frequently asked questions
What happens if I sell exactly my break-even number?
You cover the day's costs and earn nothing, not even for your hours. That is why it is worth working out a second break-even with your own daily pay included.
How do I count a propane tank that lasts several days?
Divide what the tank costs by the number of trading days it lasts, from your own records. If a $32 refill lasts you four days, that is $8 a day.
What if I sell two or three different things?
Work out what the side items contribute on a normal day, subtract that from your daily costs, and divide what is left by the contribution of your main item.
Should the card fee go into the item cost?
Yes. It goes up with every sale, so it is a variable cost. Use your own provider's rate on the price of the item.