Chinese Restaurant Break-Even Analysis: About $30K Monthly Sales

Fixed costs $24.3K/mo Payroll plus overhead

Contribution margin 80.5% After variable costs

Break-even revenue $30.2K/mo Monthly target

Break-even timing Month 3 Cumulative break-even

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even.

Lean Base Full

Monthly revenue Revenue sets the pool that pays variable and fixed costs. $ Low sales Busy sales Variable expenses Food, packaging, and payment fees rise with sales. $ Lean costs High costs

Money available to cover fixed costs $77,233 $105,343 revenue - $28,110 variable expenses

Margin ratio

73%

Covers fixed costs

Yes

Fixed monthly costs Rent, wages, and overhead stay due each month. $ Tight overhead Heavier overhead

Break-even chart Revenue Total costs

Which restaurant expenses are fixed, and which move with sales?

Cost classification

If you mix fixed rent with sales-driven food, break-even gets noisy fast. Classify each line by behavior first, then test whether Month 3 break-even still holds as covers rise from 835 weekly in the first year.

Expense	Cost	Break-Even Treatment	Common Mistake
Rent	Fixed	Use $4,500 per month as baseline overhead from Month 1 through Month 60.	Modeling rent as a percent of sales.
Business Insurance	Fixed	Include $350 per month in the monthly fixed coverage target.	Letting insurance scale with guest count.
POS System Subscription	Fixed	Include the $150 monthly subscription as fixed overhead, separate from card fees.	Bundling subscriptions with payment processing fees.
Accounting & Legal	Fixed	Carry $400 per month as recurring admin overhead in break-even.	Dropping it until the business is profitable.
Food and Beverage Ingredients	Variable	Apply the first-year combined rate of 16.0% of sales, from 13.0% ingredients plus 3.0% beverage inputs.	Burying the $192,000 opening buildout inside food margin.
Packaging & Supplies	Variable	Apply 2.0% of first-year sales, then update as the model rate declines over time.	Treating takeout supplies as fixed overhead.
Payment Processing Fees	Variable	Apply 1.5% of first-year sales because fees move with card volume.	Mixing card fees into software subscriptions.
Utilities	Semi-variable	Start with $1,200 per month, then pressure-test higher usage when covers climb.	Keeping utilities flat as guest volume rises.
Staffing Plan	Semi-fixed	Model salaries in steps as weekly covers rise from 835 in Year 1 to 1,085 in Year 2.	Adding labor smoothly per guest instead of in staffing blocks.

How does break-even move across lean, base, and fuller operating cases?

Scenario table

Lean volume only clears the fixed-cost floor, while the base and fuller cases build cushion as covers and average checks rise. The real test is whether sales grow faster than staffing and other fixed costs.

Planning cases only; actual results will move with traffic, menu mix, and staffing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean break-even floor	$30.2k	$5.9k	$24.3k	80.5%	$0	At this level, profit is flat and any slip creates loss.
Base steady month	$57.7k	$11.2k	$24.3k	80.5%	$22.1k	This case sits well above break-even and covers fixed load.
Fuller Year 2 mix	$79.5k	$14.8k	$26.6k	81.4%	$38.1k	Higher traffic adds cushion, but labor must stay disciplined.

What breaks or pressures the break-even plan for this restaurant?

Stress test

The base plan clears break-even by about $275,000 a month, but that cushion shrinks fast if foot traffic softens or costs rise. Sales drops, wage pressure, and higher ingredient or utility bills are the main break-even risks.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$302,000	$275,000 cushion	Healthy buffer if sales hold.
Revenue shortfall	Sales run 20% below the base plan.	$302,000	$160,000 cushion	Still clears fixed costs, but the buffer tightens.
Fixed-cost increase	Fixed overhead rises 10%.	$332,000	$245,000 cushion	Rent, labor, or utilities can erode the cushion.
Margin pressure	Variable expense pressure rises from 195% to 245%.	$322,000	$255,000 cushion	Higher ingredient and payment costs push break-even up.
Combined pressure	Sales fall 20%, variable pressure rises from 195% to 245%, and fixed costs rise 10%.	$381,000	$81,000 cushion	Thin cushion leaves little room for slow traffic or cost spikes.

What has to be true before you sign the lease or hire staff for this restaurant?

Founder checklist

Before you commit, make sure slow traffic still clears the $302K monthly break-even target. The model only works if rent, menu margin, payroll, and cash all hold together before Month 2’s cash low.

1Lease math$302K/mo

Check that the lease still works against the monthly break-even target, not just against a strong opening week.

2Core overhead$7.65K/mo

Confirm rent at $4,500, utilities at $1,200, and the rest of fixed overhead, including local ads and the website, stay affordable when traffic is slow.

3Menu margin80.5% CM

Verify ingredients, packaging, and payment fees stay near a 19.5% variable load so each dollar still helps cover fixed costs.

4Cover pace835/wk

Test whether the floor plan, kitchen, and service pace can really handle about 835 covers a week without slowing service.

5Payroll ramp$200K

Hold Year 1 staffing near the $200K payroll plan before adding hours, or labor will outrun sales.

6Cash cushion$804K

Keep the Month 2 cash trough in view, because buildout and opening costs hit before sales settle.