Busy does not always mean profitable. A restaurant can serve plenty of customers and still struggle if each order contributes too little toward rent, payroll and other fixed costs. Break-even planning turns the question into something operational: how many orders do we need today before the business begins earning profit?
Separate fixed and variable costs
Begin with two groups of expenses:
- Fixed costs stay broadly similar whether you sell ten meals or a hundred: rent, recurring software, insurance, base salaries and certain utilities.
- Variable costs rise with each sale: ingredients, packaging, transaction charges and per-order delivery expense.
You do not need a perfect accounting model to make a useful first calculation. Use your best current monthly numbers and refine them as your data improves.
Find your contribution per order
Contribution is what remains from an order after its variable cost. That remaining amount pays fixed costs first and profit later.
Contribution per order = average order value - average variable cost per order
Imagine an average order of $24 with $9 in ingredients, packaging and order-related costs. Each completed order contributes $15 toward fixed costs and eventual profit.
Turn monthly costs into an order target
If monthly fixed costs are $9,000 and contribution per order is $15:
Break-even orders per month = $9,000 ÷ $15 = 600 orders
If the restaurant operates 30 days per month, that is an average of 20 completed orders per day to cover fixed costs. Your target should also allow for slow days, refunds, spoilage and the profit you want the business to produce.
| Measure | Example |
|---|---|
| Monthly fixed costs | $9,000 |
| Average order value | $24 |
| Average variable cost | $9 |
| Contribution per order | $15 |
| Break-even monthly orders | 600 |
| Average daily target | 20 orders |
Why ordering channel matters
If one ordering channel carries a higher per-order cost, it reduces contribution and increases the number of orders required to reach break-even. Calculate your direct and third-party channels separately when their fees or fulfilment costs are different. This makes it easier to decide where to promote repeat ordering.
Use daily targets carefully
A daily target is not a reason to discount every quiet afternoon. Use it to plan smarter actions:
- Compare lunch and dinner contribution instead of sales volume only.
- Build bundles that raise average order value without unnecessary waste.
- Promote direct reorders to customers who already know your food.
- Review opening hours where a service period repeatedly falls below contribution needs.
Revisit the model regularly
Break-even changes when rent, wages, supplier costs, pricing or average order size changes. Review the calculation when you update a menu, add a branch, change packaging or adopt a new order channel. A current target is a planning tool; an old target is only a guess.
Estimate the sales and orders your restaurant needs to cover costs, then plan growth from a clearer baseline.
Calculate break-even →
