Mexican Restaurant Break-Even Analysis: Month 3 Operating Plan

Fixed costs $19.2K/mo Base payroll + overhead

Contribution margin 81% After variable costs

Break-even revenue $23.7K/mo Revenue to cover base

Break-even timing Month 3 Model break-even point

Break-even calculator

Test whether monthly sales cover food, labor, and overhead.

Lean Base Full

Monthly revenue Revenue is the pool that pays variable costs and then fixed overhead. $ Slow month Busy month Variable expenses Use direct costs that rise with sales, like food, packaging, delivery fees, and promo spend. $ Thin costs Heavy costs

Money available to cover fixed costs $202,022 $242,233 revenue - $40,211 variable expenses

Margin ratio

83%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base that contribution margin has to cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales for this Mexican restaurant?

Cost classification

Break-even is only useful if fixed overhead, variable sales costs, and step-up labor are split correctly. Rent belongs in overhead, food and delivery fees reduce contribution margin, and kitchen staffing moves in capacity steps.

Expense	Cost	Break-Even Treatment	Common Mistake
Kitchen Facility Rent, $5,000/month	Fixed	Include in monthly overhead from Month 1 through Month 60.	Treating the lease as volume-based.
Head Chef, $70,000/year, and Operations Manager, $60,000/year	Fixed	Include as base payroll coverage before calculating contribution margin.	Calling all labor variable.
Line Cook, Prep Cook, and Dishwasher staffing	Semi-fixed	Model headcount step-ups by year as cover volume rises.	Missing overtime and shift coverage.
Raw Food & Beverage Costs, 10% of sales in Year 1	Variable	Deduct from revenue when calculating contribution margin.	Ignoring waste and spoilage.
Packaging Materials, 2% of sales in Year 1	Variable	Deduct per order or sales dollar in contribution margin.	Treating packaging as fixed supplies.
Delivery Platform Commissions, 5% of sales	Variable	Apply to orders using that channel mix.	Treating takeout as the same margin as on-premise sales.
Utilities, $1,500/month	Semi-variable	Keep base service in overhead and flex usage for peak kitchen loads.	Leaving peak kitchen loads flat.

How does break-even change from a lean opening to a full Mexican restaurant plan?

Scenario table

Higher covers and a better menu mix lift revenue faster than fixed costs, so the cushion widens from lean to full. Here’s the quick math: each case stays above monthly break-even, but the size of the buffer changes a lot.

Planning case figures use model assumptions and show direction, not guaranteed demand.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean opening case	$101k	$19k	$34k	81%	$48k	Still above break-even, but the cushion is thin if traffic slips.
Base demand case	$161k	$29k	$39k	82.2%	$94k	Comfortable cushion; this is the first stable break-even case.
Full capacity case	$242k	$40k	$42k	83.4%	$160k	Strong cushion; capacity and staffing matter more than break-even.

What breaks first if traffic slips or costs rise for this Mexican restaurant?

Stress test

Year 1 revenue is about $1,012,000 a month versus a $422,000 break-even point, so the cushion is about $590,000. A 58% sales drop nearly wipes that out, and a 1-point margin hit adds about $10,120 of monthly cost at plan sales.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$422,000	$590,000 cushion	Healthy cushion, but costs still matter.
Revenue shortfall	Sales fall 58% from the Year 1 average run rate.	$422,000	$3,040 cushion	A sharp traffic drop almost erases the buffer.
Fixed-cost pressure	Rent, payroll, or insurance adds $1,000 a month.	$423,235	$588,765 cushion	Every extra fixed dollar needs more sales.
Margin pressure	Food, delivery, or overtime lifts variable costs by 1 point.	$427,275	$584,725 cushion	A small cost hit adds about $10,120 a month.
Combined pressure	Sales fall 58%, variable costs rise 1 point, and fixed costs add $1,000 a month.	$428,525	$3,485 gap	Soft traffic plus inflation can push this into loss.

Can this Mexican restaurant clear break-even before you sign the lease and fund opening spend?

Founder checklist

Test the lease, wage plan, and opening traffic against the model before you commit. Month 3 break-even only works if demand, staffing, and waste stay on plan.

1Weekly Covers645/week

Verify the opening plan can reach 645 weekly covers in Year 1, because that is the demand base the break-even math needs.

2Peak Capacity150/130

Verify the kitchen can serve 150 Saturday covers and 130 Sunday covers in Year 1 without slow service or waste, since weekends carry the ramp.

3Fixed Load$410.2K/yr

Verify the $5,000 rent and the Year 1 wage plan fit inside about $410.2K of annual fixed load before owner pay, because that burn exists before sales do.

4Menu AOV$30/$40

Verify midweek average order value holds near $30 and weekend average order value near $40, because pricing sets the revenue needed to break even.

5Cost Stack12% + 5%

Verify raw food and beverage stay at 10%, packaging at 2%, and delivery commissions near 5%, or reprice the menu, because cost creep cuts contribution fast.

6Launch Cash$751K

Verify you can fund the $230K capex separately and still hold the $751K minimum cash need in Month 2, because the low point arrives before steady sales.