#750 · Business Tool

Restaurant Cost Calculator

Analyze restaurant total cost, cost ratio, prime cost, and potential savings from food, labor, occupancy, utilities, marketing, and miscellaneous expenses.

Calculator

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How to use this calculator

  • Enter monthly revenue for cost ratio context.
  • Add each major cost category separately.
  • Review total cost, prime cost, and savings needed to reach a healthier cost ratio.

What the result means

The result shows how much of revenue is consumed by operating costs. Prime cost is a critical restaurant KPI because food and labor often determine whether the business can profit.

Total Cost = Sum of all costs. Cost Ratio = Total Cost / Revenue × 100. Prime Cost = Food Cost + Labor Cost.

High cost ratio means the restaurant has little room for profit, owner pay, debt service, or reinvestment.

Example calculation

With $80,000 revenue and $67,000 costs, total cost ratio is 83.75%. A lower target cost ratio would require savings or higher revenue.

Tips for better results

  • Negotiate supplier pricing and control portion sizes.
  • Schedule labor by forecasted traffic, not habit.
  • Audit utilities, waste, and subscriptions monthly.

FAQ

What percentage of restaurant revenue should go to food costs?

Food cost targets vary by concept, but many restaurants monitor whether food cost stays roughly within the high-20s to mid-30s percentage range.

What is the ideal labor cost percentage for restaurants?

Labor cost depends on service model, but it should be controlled together with food cost because prime cost drives profitability.

How do I reduce restaurant operating expenses?

Reduce waste, optimize labor scheduling, review suppliers, improve menu engineering, and eliminate low-return expenses.

What is restaurant prime cost?

Prime cost is food cost plus labor cost. It is one of the most important restaurant profitability metrics.

How much does it cost to run a restaurant each month?

Monthly restaurant cost includes food, labor, occupancy, utilities, marketing, and miscellaneous expenses. This calculator totals those costs and compares them with revenue.

Restaurant Cost Metrics

MetricMeaning
Total CostAll operating costs combined
Cost RatioTotal cost as percentage of revenue
Prime CostFood plus labor cost
Potential SavingsSavings needed for target cost ratio

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