Break-even is the number of customers you need each day before the shop starts to make money. Every owner has a feeling for it. Few have the number. And the way most people work it out gives an answer that is too low.
This post gives you the restaurant break-even point formula, a worked example with real numbers, and the mistake that makes the usual answer wrong by about 40%.
The formula
Customers per day = (monthly fixed costs ÷ days open + daily labor) ÷ (average check − food cost per check)
In words:
- Divide your monthly fixed costs by the days you open. That is the fixed cost of one day.
- Add one day of labor. Now you have what one day must cover.
- Take your average check and subtract the food and drink cost in it. That is what each customer leaves you.
- Divide the day's cost by what each customer leaves. Round up.
The top of the fraction is your daily cost. The bottom is your contribution per customer. The result is how many customers you need.
The four numbers you need
Monthly fixed costs. Anything you pay even when nobody comes in. Rent, insurance, loan payments, software, licenses, base utilities. If you pay yourself a fixed wage, add it here. Many owners leave their own pay out, and then break-even still feels like losing money.
Days open. The days you open, not the days in the month. 30 means every day. 26 means closed one day a week. 22 means closed two.
Daily labor. What you pay staff for one ordinary day. Wages plus employer taxes. If your slow day has one person and your busy day has three, work out both.
Average check and food cost. Average check is total sales divided by number of customers. Food cost is what the food and drink in that check cost you. Most owners know it as a percentage. 30% food cost on a $28 check is $8.40.
A worked example
A cafe has these numbers:
| Input | Value |
|---|---|
| Monthly fixed costs | $12,000 |
| Days open | 26 |
| Daily labor | $450 |
| Average check | $28 |
| Food cost | 30% ($8.40 per check) |
Step 1. Fixed cost per day. $12,000 ÷ 26 = $461.54.
Step 2. Add labor. $461.54 + $450 = $911.54. That is what one day must cover.
Step 3. Contribution per customer. $28 − $8.40 = $19.60. Each customer leaves $19.60 after you pay for their food.
Step 4. Divide and round up. $911.54 ÷ $19.60 = 46.5. Customer 46 has not covered you. Customer 47 has.
Break-even: 47 customers a day.
| Step | Calculation | Result |
|---|---|---|
| Fixed cost per day | $12,000 ÷ 26 | $461.54 |
| Day must cover | $461.54 + $450 | $911.54 |
| Contribution per customer | $28 − $8.40 | $19.60 |
| Customers needed | $911.54 ÷ $19.60, rounded up | 47 |
The mistake everyone makes
Most owners do this instead: $911.54 ÷ $28 = 32.6, so 33 customers.
That divides the day's cost by the whole check. It assumes the food was free. It was not. Thirty cents of every dollar went to the supplier. Only 70 cents is left to pay the rent and the staff.
So the real answer is 47, not 33. That is 14 customers a day, or 364 a month, that the wrong formula hides. An owner who hits 35 customers on a Tuesday and feels safe is losing money on every one of those Tuesdays.
The fix is one subtraction. Take the food cost out of the check before you divide. The rest of the formula is the same.
Three more things that move the number
Days open. With the same $12,000 fixed costs, opening 30 days instead of 26 spreads the rent thinner. $12,000 ÷ 30 = $400. Add $450 labor: $850. Divide by $19.60: 43.4, so 44 customers. Closing one day a week moves the daily target from 44 to 47. That is not a reason to open every day. It is a reason to know the number for the days you do open.
Food cost. At 35% food cost the contribution per customer drops to $18.20. $911.54 ÷ $18.20 = 50.1, so 51 customers. Five points of food cost is four more customers a day.
Your own pay. If you want to take $3,000 a month, add it to fixed costs. $15,000 ÷ 26 = $576.92. Plus $450 labor = $1,026.92. Divide by $19.60: 52.4, so 53 customers. Break-even without your pay tells you when the shop survives. Break-even with your pay tells you when it works.
What to do with the number
Once you know your break-even is 47, three things change.
You know your slow day by number, not by feeling. If Tuesday brings 35, you lose about $235 that day (12 customers short × $19.60). Now you can decide whether to fix Tuesday, close Tuesday, or run Tuesday with one fewer person.
You can price a marketing cost. A tool that costs $39 a month needs to bring in two extra visits a month at $19.60 each to pay for itself. KANJIN's Paid plan is $39 a month per location. A discount that costs $200 a week needs to bring in more than ten extra customers that week, and most discounts do not.
You can see what a small change is worth. One more customer a day is $19.60 × 26 = $509.60 a month. Raising the average check by $1 with a pastry is 47 × $1 × 26 = $1,222 a month, and it costs almost nothing to serve.
Frequently asked questions
What counts as a fixed cost? Anything you pay even if no customer comes in: rent, insurance, loan payments, software, licenses and base utilities. Food and hourly staff are not fixed. They go in food cost and daily labor.
Why is my break-even higher than my costs divided by my average check? Because dividing by the check assumes a 0% food cost. At 30% food cost, only 70 cents of each dollar is left to cover the rest. With the numbers above, dividing by the check gives 33 customers. The real answer is 47.
Should I count calendar days or days open? Days open. Rent does not care, but your customers can only come when the door is open. Spreading the same rent over fewer days raises the daily target.
Does this work for a salon or a shop? Yes. Use product cost in place of food cost and average sale in place of average check. A salon with low product cost will see a contribution close to the full price, and break-even becomes mostly about labor and rent.
Work out your own break-even
Put your own four numbers into the free Break-even calculator. It does the subtraction that most people forget, rounds up, and shows what one day must cover. If you want to track the real count against that number every day, KANJIN's Daily ledger is free. And when you are ready to bring in the extra visits, the Paid plan is $39 a month per location, cancel any time.