In this section
- How to cost a plate for your menu, step by stepBuild a plate cost card with the protein, sides, sauces, fryer oil and the waste of the line. A full worked example with a burger and fries, in dollars.→
- Menu engineering: which dishes to push, fix or dropSort your dishes by how much they sell and how many dollars each leaves: stars, plowhorses, puzzles and dogs. One month of sales and what to do next.→
- How to price a set lunch or lunch specialCost a set lunch by what guests actually order, find how many you need to sell each day, and set the price that covers your costs. With an example.→
- Prime cost: food plus labour as a share of salesWork out your restaurant's prime cost every week, food plus labour with your own hours included, and read it against sales. With a worked example.→
- Covers, average ticket and table turnoverRead daily sales as covers times average ticket, work out table turnover and decide which lever to pull. Includes a simple daily log to start with.→
- How to schedule restaurant staff to your salesMatch kitchen and floor shifts to your covers by the hour, work out labour cost per cover, and see exactly when one more person on shift pays for itself.→
- When and how to update your menu pricesThe signals that say your menu prices need updating, how much to raise at once, which dishes to move first and how to tell your regulars without losing them.→
- Drinks, sides and extras: where restaurants make marginHow much a lemonade, a side of fries or a dessert leaves you next to the main dish, and how to sell them in your restaurant without discounting the meal.→
- How to track food waste in a restaurant kitchenHow to log prep trim, spoilage, overproduction and plate returns on a simple waste sheet, cost every line and work out what waste costs you per cover.→
A restaurant is profitable when, month after month, covers times average ticket pays for food, wages (yours included), rent and everything else, with something left over. To know whether that is happening in yours, you need six numbers: plate cost, food cost percentage, prime cost, covers, average ticket and break-even. None of them works alone. Together they show where the money goes and which lever to pull first.
In this guide
This is the overview. Each number has its own guide:
- How to cost a plate for your menu
- Menu engineering: which dishes to push, fix or drop
- How to price a set lunch or lunch special
- Prime cost: food plus labour as a share of sales
- Covers, average ticket and table turnover
- Scheduling restaurant staff around your sales
- When and how to update menu prices
- Drinks, sides and extras: where the margin is
- Tracking waste in a restaurant kitchen
The six numbers and how they fit
Think of a chain. Each link comes from the one before.
- Plate cost. What it costs in ingredients to send one plate out exactly as it leaves the pass: protein, sides, sauces, fryer oil, what goes on the table, and the waste of the line.
- Food cost %. Plate cost divided by the menu price before tax. Per dish it tells you how loaded each plate is. Per month (actual usage ÷ sales) it tells you what really went, staff meals and waste included.
- Prime cost. Food plus labour as a percentage of sales. They are the two largest costs in almost any restaurant, and the two you can control every week.
- Covers. How many people ate. That is volume.
- Average ticket. Sales ÷ covers. That is spend per head.
- Break-even. How many covers a month (and a day) you need to pay all fixed costs with what each cover leaves.
Sales = covers × average ticket. Food and labour (prime cost) come out of those sales. What is left has to pay rent and the rest. If it does not stretch, break-even tells you how many covers are missing.
1. Plate cost
Everything starts here. If you do not know what a burger and fries costs as it reaches the table, every other number is wrong. The usual mistake is costing the patty and forgetting the bun, the fries, the fryer oil, the sauce cups and what gets lost on the line.
Build a card for each dish with the grams you actually serve and the price from your last invoice at the wholesaler or cash and carry. Use your own trim: if your potatoes give you 800 g of cut fries per kilo after peeling, that is your number, whatever anyone else gets. The step-by-step method is in how to cost a plate. To go from cost to menu price, the menu price calculator works it out from the food cost percentage you choose.
2. Food cost per dish and per month
Food cost % = ingredient cost ÷ price before tax × 100
Work it out two ways and compare them:
- Per dish, from the plate cost card. It tells you which dishes are heavily loaded.
- Per month, from what you actually used: opening stock + purchases − closing stock, divided by sales before tax.
If the monthly figure comes out several points higher than your cards, the gap is waste, portions that crept up, staff meals or ingredients going out without being charged. That gap is money, and the example below shows how much. How to set your own food cost ceiling, without copying ranges from the internet, is in the guide to food cost percentage.
3. Prime cost
Prime cost % = (food used + labour) ÷ sales before tax × 100
Labour means everyone who works: kitchen, floor, dish pit and you. If you cook twelve hours a day and leave those hours out, your prime cost looks healthy and the restaurant is not actually paying you. To put a value on your hours, use the guide to costing your own labour.
Measure it every week. It is the number that warns you first: when a key ingredient jumps, when a quiet week had the same rota as a busy one, when portions grew. Your prime cost ceiling does not come from an industry average; it comes from your fixed costs. The method is in the guide to prime cost.
4. Covers and average ticket
Your daily sales are covers × average ticket. Each lever moves differently:
- More covers bring more sales, but also more food and, at peak hours, more people on the floor.
- A higher ticket comes from drinks, sides, starters to share, desserts or a better main. A house lemonade has very little in it; almost everything it adds to the ticket stays with you.
Keep a simple daily log: covers, sales and ticket per service. Then you know which days are short of covers and which days the problem is the ticket. The detail is in covers, average ticket and table turnover.
5. Break-even
Covers to break even per month = monthly fixed costs ÷ (average ticket − food cost per cover)
Fixed costs are the ones you pay whether the room is full or not: rent, wages, your own pay, utilities, insurance, accounting. The part in brackets is what each cover leaves to pay them. Divide the result by the days you open and you have your daily target. The full formula, with several products, is in the guide to break-even, and the break-even calculator gives you plates per month and per day.
Worked example: a small burger and lunch place
A 40-seat place serving burgers, sandwiches and a few mains. It opens 26 days a month. All sales figures are before tax.
Sales for the month
- Covers: 90 a day × 26 days = 2,340
- Average ticket: $20.00
- Sales: 2,340 × 20.00 = $46,800
Food. The plate cost cards say food cost on what was sold should be 29%. The stock count says something else: opening stock + purchases − closing stock = $15,444. That is 15,444 ÷ 46,800 = 33%.
Labour for the month
| Who | Monthly cost |
|---|---|
| You, on the grill (what you need to earn) | $4,000 |
| Two part-time cooks, a server and a dishwasher | $10,000 |
| Total | $14,000 |
Labour as a share of sales: 14,000 ÷ 46,800 = 29.9%.
Prime cost: 15,444 + 14,000 = $29,444. As a share of sales: 29,444 ÷ 46,800 = 62.9%.
Other fixed costs: rent $5,500, utilities and gas $1,600, insurance, accounting and software $1,200, disposables and cleaning $900. Total: $9,200, which is 19.7% of sales.
What is left: 46,800 − 29,444 − 9,200 = $8,156 a month, 17.4% of sales, after paying yourself for your shifts.
Break-even
- Food per cover: 15,444 ÷ 2,340 = $6.60
- What each cover leaves: 20.00 − 6.60 = $13.40
- Fixed costs: labour 14,000 + other 9,200 = $23,200
- Covers to break even: 23,200 ÷ 13.40 = 1,731.3, so 1,732 a month
- Per day: 1,732 ÷ 26 = 66.6, so 67 covers
At 90 covers a day, this place is 23 above break-even. A Tuesday with 60 covers loses money; a whole month at that pace would too.
Which lever to pull first
Using the same numbers, compare three possible improvements:
| Lever | Sum | Extra per month |
|---|---|---|
| 5 more covers a day | 5 × 26 × 13.40 | $1,742 |
| $1.00 more on the ticket from a drink with $0.30 in ingredients | (1.00 − 0.30) × 2,340 | $1,638 |
| Close the gap between cards (29%) and month (33%) | 4% × 46,800 | $1,872 |
All three are worth roughly the same. The difference is what it takes to get them. Closing the waste gap does not need a single new customer: weigh portions, record what goes in the bin and log staff meals. Raising the ticket depends on the server offering the drink. Bringing in more covers is usually the most expensive and the slowest.
So the order that often makes sense is plate cost and waste first, then ticket, then covers. Your numbers decide the order, though, not a rule. If you are full at 12:30 and people walk away because there is no table, faster turnover at the peak can be worth more than everything else.
Look at the menu too
Monthly numbers are averages. Inside them are dishes that carry the business and dishes that drag it. With a month of sales you can sort your menu and decide what to push, fix or drop; that is menu engineering. If you run a lunch special, its price deserves its own calculation, with the mix of options and the leftovers at the end of service: see how to price a set lunch.
Drinks, sides and extras often leave more per dollar sold than mains. It is worth checking what each one leaves in drinks, sides and extras.
A 30-minute weekly routine
You do not need a complicated system. Once a week:
- Add up sales before tax, covers and average ticket per day.
- Do a quick stock count of the expensive items (meat, fish, cheese, oil) and work out the week's usage.
- Add up everyone's hours, yours included, and calculate prime cost.
- Write down what was thrown away and why, using the guide to tracking restaurant waste.
- Check whether any ingredient has gone up enough to touch a price, with the guide on when to update menu prices.
- Set next week's rota against each day's covers, as explained in scheduling staff around your sales.
All the guides on this topic are together in the restaurants section.
Do it with the calculator
Put each dish's recipe into the food cost calculator with its grams and what you paid for each ingredient, and it gives you the cost per portion. With that number for every plate, you can work out food cost, prime cost and break-even with the formulas in this guide.
Frequently asked questions
How many covers a day does a restaurant need to break even?
Divide your monthly fixed costs (rent, wages, your own pay, utilities, gas) by what each cover leaves after food, then by the days you open. The answer is specific to your rent, your team and your average ticket.
Which number should I check first if the restaurant is not making money?
Weekly prime cost: food plus labour as a share of sales. If it is high, the problem is in the kitchen or the rota. If it looks fine and there is still nothing left, look at covers, average ticket and fixed costs.
Should my own hours count as a restaurant cost?
Yes. If you cook or run the floor, your hours are labour and belong in the wage line even if you do not pay yourself a fixed salary. Leave them out and the restaurant looks profitable while paying you very little.
Do I calculate these numbers with or without sales tax?
Without. Any sales tax or VAT you collect belongs to the government, so work from sales before tax. Check your local tax rules or ask an accountant for how it applies to restaurants.