Restaurant profit margins average 3–9%. Knowing your numbers is essential for survival.
Restaurant costs: food 28–35%, labor 30–35%, rent 5–10%. Leaves only 5–15% for profit.
Reach for this calculator when you need to present a business metric to stakeholders. Accurate, consistently-defined figures command more credibility than estimates, particularly in financial discussions.
Many business metric errors arise from using the wrong time period for the calculation. Annualising a figure from a seasonal month, or averaging a figure that changes over time, can produce misleading results that don't reflect steady-state performance.
A marketing manager calculates campaign ROI: £15,000 spend, £72,000 in attributed revenue, 35% gross margin. Net profit from the campaign: £10,200. ROI: 68%. The figure justifies the budget allocation and provides the benchmark for the next campaign.
3–9% net profit margin is typical. Fine dining can reach 15–20%. Fast food: 6–9%.
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