Three Numbers That Decide Whether Your Restaurant Makes Money

A full restaurant can still lose money. Busy tables tell you people like the food. They do not tell you whether each plate pays for itself. Three numbers do. You can work them out every week in under an hour.

1. Food cost percentage

This is what the food you used cost, as a share of food sales.

Food used = opening stock + purchases − closing stock. Food cost % = food used ÷ food sales.

Many restaurants aim for roughly 28% to 35%. A figure that climbs week after week usually means waste, over portioning, supplier price rises not passed on or stock walking out of the back door.

2. Labour cost percentage

This is every staff cost, including SHIF, NSSF and Housing Levy, as a share of total sales. A common guide is 25% to 35%. Add food and labour together and you get your prime cost. Keep it under about 65% of sales and there is usually enough left for rent, utilities and profit.

3. Average spend per cover

Divide sales by the number of guests served. It is the quickest way to grow sales without more customers. A side, a drink or a dessert suggested at the table moves this number more than any advert.

A worked week

Lift average spend by KES 50 and the same 1,400 guests bring in KES 70,000 more that week.

Five steps for this week

1. Count kitchen and bar stock at the same time every week.
2. Cost your ten best selling dishes at today's supplier prices.
3. Total all staff costs, statutory deductions included.
4. Record covers alongside sales on your end of day report.
5. Make sure every supplier gives an eTIMS invoice, so food costs stay tax deductible.

Running a bar or hotel as well? Our hospitality guide covers excise stamps, levies and daily reconciliation.