How to work out a restaurant's break-even point
The break-even point is the turnover that exactly covers every cost. Below it, each service costs money; above it, it earns.
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The formula
break-even = fixed costs ÷ (1 − variable cost rate). The denominator is the contribution margin rate: what each euro taken leaves to pay fixed costs once food and the other variable costs are paid.
Worked example: a restaurant open 26 days a month
€18,000 of fixed costs a month, variable costs at 45% of turnover.
| Contribution margin rate | 55% |
|---|---|
| Monthly break-even point | €32,727 |
| Per trading day, over 26 days | €1,259 |
| The same calculation with food alone (30%) | €25,714 |
Counting food alone puts the threshold €7,013 too low every month: you believe you break even at €25,714 while losing money all the way to €32,727.
Fixed or variable
Fixed: rent, insurance, subscriptions, professional fees, depreciation, loan repayments and the wages of the permanent core — everything paid whether the room is full or empty. Variable: food, casual staff, overtime and delivery-platform commissions.
Food alone does not make the variable rate. It is the most dangerous mistake in this calculation, because it puts the threshold too low: you believe you are breaking even while losing money.
Per trading day, not per month
A monthly threshold means nothing in the kitchen. Brought down to the trading day, it can be checked the same evening and corrected the following week. Margéo places actual turnover against that threshold, day after day, and projects cash thirteen weeks out.