How many covers a night do I need to break even?

Divide the sales you need each month to break even by what the average guest spends, then by the nights you're open. That's the covers you need each night to pay every bill. For the example restaurant below, it's 61 covers a night, or 70 once the owner pays themselves $4,000 a month.

The formula, step by step

A cover is one guest served. You need three numbers, all from the same typical month.

1. 01Break-even sales a month. Add up the bills that stay the same whatever you sell: rent and utilities, salaries, insurance, software and loan payments. Then work out the share of each sale that the costs rising with sales take: food and drink, card fees, app commissions, packaging, and hourly pay if you add and cut shifts with the rush. The SBA's break-even page divides the first by what's left of each sale, and calls the result an estimate.
2. 02Average spend per guest. Net sales for the month ÷ covers for the month, both from your POS. Net sales means after discounts and comps, without sales tax and tips.
3. 03Nights open a month. Nights open a week × 52 ÷ 12. Six nights a week is 26 nights a month.

Round up. A night that falls one cover short of the number is a night under break-even.

A worked example

This is the break-even calculator's opening example, so you can check every figure there. A full-service restaurant sold $90,000 last month, is open 6 nights a week, and its guests spend $45 on average. Its hourly team is added and cut with the rush, so hourly pay counts with the costs that rise with sales. The figures are round examples, not industry data.

The costs that rise with sales are food and drink purchases of $28,800, hourly pay of $22,500 and $4,950 of card fees, app commissions and packaging. If about the same team works every shift, hourly pay is a bill that stays the same instead: break-even rises to $78,240 a month and the covers to 67 a night. The calculator works out both when you're not sure which fits.

What paying yourself does to the number

If you work in the restaurant without a wage, the bills that stay the same have nothing in them for your hours, and break-even is the point where you work for free. Put a number on your hours: what you'd pay a manager to do your job. Say it's $4,000 a month in this example.

$4,000 more in monthly bills takes 9 more covers a night. If you're already on payroll at a fair wage, your pay is in the bills, so don't add it twice. The break-even calculator takes your own pay as its own line, so you can see the number with it and without it. The profitability test uses the same idea: pay yourself first in the math.

Check it against your seats

Say the example restaurant has 50 seats. 61 covers is 1.2 turns a night: every seat filled once, and some a second time. With the owner paid, 70 covers is 1.4 turns. That has to happen on an average night, every night it's open. Before you compare it with your own room:

• Take takeout and delivery covers out first. They don't need a seat.
• Seats are rarely all full. A table for four with two guests leaves two seats empty, so your room seats fewer covers in a turn than it has seats.
• Look at your busy nights and your slow ones, not only the average. The covers have to come on the nights you're open.

Then work out what your room really does: covers a night from your POS for the last four weeks, divided by your seats. If break-even needs more turns than your room manages on a good night, more guests alone won't close the gap, and the costs, the average spend or the bills are where to look.

What moves the number

• Bills that stay the same: in the example, each $1,000 a month off them lowers break-even by $2,667 a month, about 2 covers a night.
• Costs that rise with sales: one point of sales off them, such as food and drink from 32% to 31% of sales, lowers break-even by $1,829 a month.
• Average spend: at the same cost shares, $5 more per guest takes the 61 covers down to 55.

Each of these is an example, not a forecast: change one number in the calculator and it works out the rest. The break-even post goes through the same month in more detail.

Common questions

Is a cover the same as a guest?

Usually, yes: one cover is one guest served. For takeout, count orders instead, and use sales ÷ orders as the average spend.

Should the average spend include tax and tips?

No. Use net sales, after discounts and comps and without sales tax and tips: the same sales figure your break-even uses.

What if my rent is the problem?

Rent is one of the bills that stay the same, so it moves the covers you need. See how much rent a restaurant can afford.