Understanding your restaurant’s fixed costs per hour of opening

Whether your restaurant is open twenty hours each week, or eighty hours each week there are going to be fixed costs that have to be covered with revenue made during those hours. Sounds obvious? First Table has created 2 online calculators to determine how much revenue you need for each hour you’re open and how much Revenue/Gross Profit you need to get ahead.

These calculators can be accessed by clicking this link – free to use

Rent & wages are typically your largest expenses – you should know them both as a monthly figure right now. They might change a little with the seasons, but knowing an average is highly recommended to stay on top of things. Then comes the power/gas bill, compliance costs and other fixed bills which have to be paid before you’ve even bought any ingredients.

With the first online calculator, you can enter your fixed costs, along with the number of days and the number of hours you are open each week. This will calculate your fixed operating costs per hour of opening.

The example pictured here shows:

Open hours/week = 70 (7 days x 10hrs/day)

Rent monthly = $15,000

Wages monthly = $38,000

Power/gas monthly = $2,000

Other fixed monthly expenses = $200

So the fixed costs per hour open are $182 – that’s every hour whether it’s busy or not.

As we all know, off-peak times are hard to avoid. You might open the doors at 5pm and often not get people through them until 6pm. But knowing that people walking past before 6pm will notice that you are open, you still open the doors at 5pm; maybe they are planning to dine at 6.30pm and looking at options. People Follow People, so when there is a group who arrive before 6pm, their presence can often attract more people.

Let’s then consider how many covers you need to cover your fixed costs. Use the second online calculator to enter the typical spend/person and your food/beverage margins to calculate the Revenue and Gross Profit of a table of four people. 

In our example, four people come in who spend $50 each on food, and $15 each on drinks. Cost of Goods Sold are 35% for food and 25% for drinks. These margins can be adjusted in the calculator to match those of your venue.

This brings in a Gross Profit of $175 that almost covers the fixed operating costs of that one hour ($182). It doesn’t factor in the variable costs of food, but it’s certainly a start.

And if that one table, positioned well in a visible part of your restaurant attracts another table of four people, then you’re starting to make some money at a time you’re usually losing it.

How do these numbers compare for your restaurant? Click here to use the online calculators