1. Food cost percentage
Food cost percentage is the ratio of your ingredient costs to your food revenue. If you spend €28,000 on food in a month and generate €90,000 in food revenue, your food cost is 31%. The industry benchmark is 28-32% for most full-service restaurants, lower for quick-service and higher for premium concepts.
What most owners miss: there are two food cost percentages. Theoretical (what your costs should be based on recipes and sales) and actual (what you actually spent). The gap between them — food cost variance — is where money disappears. Track both.
2. Labor cost percentage
Labor cost percentage is total wages divided by revenue. Benchmark: 28-35% for full-service restaurants. This should include all hourly wages, salaried positions, and employer-side payroll taxes — not just the wages on a timesheet. Many owners under-calculate labor cost by forgetting benefits, overtime premiums, or their own time if they work in the restaurant.
3. Prime cost
Prime cost is the sum of food cost and labor cost. It's the single most important operational metric in a restaurant because it captures the two largest variable costs together. A prime cost below 60% of revenue generally indicates a healthy operating model. Above 65% and you're fighting a structural problem that is hard to profit through.
Prime cost is the pulse of your restaurant. Check it weekly, not monthly. A monthly check shows you a problem. A weekly check gives you time to fix it.
4. Contribution margin per cover
Contribution margin per cover is the average revenue per customer minus the average variable cost per customer (primarily food and direct labor). If your average ticket is €32 and your variable cost per cover is €18, your contribution margin is €14. That €14 is what each additional customer contributes toward covering your fixed costs and generating profit.
This number matters because it tells you the financial value of each seat you fill. A restaurant with a €14 contribution margin and 80 covers per night generates €1,120 toward fixed costs nightly — and every additional cover is pure margin improvement.
5. Break-even revenue
Break-even revenue is the sales figure you need to hit each month to cover all costs with zero profit. Knowing this number changes how you operate. If your break-even is €62,000 per month and you're averaging €68,000, you know your buffer. If you're averaging €63,500, you know you're one bad week from losing money.
- Calculate it: divide your total monthly fixed costs by your contribution margin percentage (contribution margin ÷ revenue).
- Track your actual revenue against break-even weekly.
- Know how many covers per day you need to break even — this turns an abstract number into a daily operational target.
6. Revenue per available seat hour (RevPASH)
RevPASH divides your revenue by the product of your seat count and operating hours. A 50-seat restaurant open for 5 hours at dinner generating €4,500 has a RevPASH of €18. This metric captures both pricing and capacity utilization simultaneously — a restaurant with high RevPASH either charges well or fills seats efficiently, or both.
7. Inventory turnover
Inventory turnover measures how quickly you cycle through stock. A turnover rate of 2 to 4 times per week is generally healthy for most restaurants — it means stock is moving fast enough to minimize spoilage without creating shortage risk. Turnover below 1.5 per week usually indicates over-ordering and elevated spoilage.
Building your weekly dashboard
You don't need to track everything. You need to track the right things consistently. A simple weekly dashboard with these six numbers will give you more financial clarity than most restaurant owners ever have:
- Total revenue vs. break-even target
- Food cost % (actual vs. theoretical)
- Labor cost %
- Prime cost
- Cash balance vs. prior week
- Covers served vs. prior week
These six numbers reviewed every Monday morning will surface problems before they become crises. They will also surface opportunities — like a food cost spike that, once investigated, reveals a single dish driving disproportionate waste.