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Glossary

Break-even Point

The revenue level at which a restaurant covers all costs and starts earning profit.

Definition

Break-even is the daily or monthly revenue number at which all fixed costs (rent, salaries, utilities, EMI) plus all variable costs at that volume are exactly covered. Below break-even is a loss day, above is profit. The MVP question: do you know yours? Most Indian restaurant owners do not.
Example

Worked example

Fixed costs ₹3.2L/month, variable cost rate 60%: monthly break-even = ₹3.2L / 0.40 = ₹8L. Daily ≈ ₹26,667.

Tags

financeoperations
Related terms
Food Cost %
The percentage of revenue spent on raw ingredients.
→
Prime Cost
Food cost + labour cost combined as a percentage of revenue.
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Break-even Point — Indian HORECA glossary | Forkcast