The short answer
Separate fixed monthly costs from variable costs that move with sales. Divide fixed costs by the contribution margin ratio, then stress-test the result against realistic capacity and seasonality.
Step by step
Work through the decision
- 01List fixed operating costs
- 02Estimate blended variable-cost percentage
- 03Calculate contribution margin ratio
- 04Estimate break-even sales
- 05Translate sales into covers, checks and service periods
Common mistakes
- Treating all labor as fixed or variable
- Ignoring owner compensation and debt
- Using best-month sales mix
- Accepting a result the restaurant cannot physically produce
Working checklist