Soul Food Restaurant Break-Even Analysis: $775K Monthly Sales

Fixed costs $22.0K/mo Base overhead

Contribution margin 80.5% Per-sale cushion

Break-even revenue $27.3K/mo Monthly target

Break-even timing Month 3 Ramp point

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for a soul food restaurant.

Lean Base Full

Monthly revenue Revenue sets the pool that covers variable and fixed costs. $ Low sales Busy month Variable expenses Use direct costs that rise with sales, like food, drinks, ads, and card fees. $ Low cost High cost

Money available to cover fixed costs $285,008 $344,654 revenue - $59,646 variable expenses

Margin ratio

83%

Covers fixed costs

Yes

Fixed monthly costs Use the monthly cost base the restaurant must cover even in slow months. $ Lean base Heavy overhead

Break-even chart Revenue Total costs

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

Cost classification

Classify costs before you calculate break-even, because rent and payroll don’t move like food, card fees, and utilities. Keep buildout spend, such as kitchen equipment and fit-out, out of contribution margin; it belongs in cash runway planning.

Expense	Cost	Break-Even Treatment	Common Mistake
Rent Lease Payment	Fixed	Use $15,000 per month in fixed overhead for the operating break-even model.	Spreading opening buildout into rent and overstating monthly break-even.
Food Ingredients	Variable	Apply the first-year 8.0% rate to revenue as sales volume changes.	Treating food spend as flat even when covers rise from weekday to weekend peaks.
Beverage Ingredients	Variable	Apply the first-year 4.0% rate to revenue tied to drink sales.	Using one blended food margin and hiding beverage economics.
Credit Card Processing	Variable	Apply the first-year 2.5% rate to card-based revenue in contribution margin.	Leaving payment fees below the line and making margin look too high.
Marketing Advertising	Variable	Use the first-year 5.0% rate as sales-linked demand spend.	Budgeting it as fixed while campaigns scale with revenue targets.
Utilities	Semi-variable	Start with the $2,500 monthly base, then watch usage as service volume rises.	Assuming utilities stay flat during busier dinner and weekend periods.
Cleaning Services	Semi-variable	Use the $1,200 monthly base, with added service likely as traffic and turns grow.	Forgetting extra cleaning hours after higher-cover weekends.
Kitchen Staff Payroll	Semi-fixed	Model staffing in steps; first-year kitchen staff equals 2.0 FTE at $40,000 each annually.	Scaling payroll penny-for-penny with sales instead of adding staff by capacity step.

How does break-even move from a lean opening to a full-volume week?

Scenario table

Here’s the quick math: higher covers and tickets lift revenue faster than variable cost, but payroll also rises. So the margin improves, fixed cost climbs, and break-even stays most sensitive in the lean opening case.

Planning assumptions only; actual results will shift with traffic, ticket mix, and labor use.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Year 1 lean opening	$202k	$39.9k	$62.4k	80.5%	$99.6k	Smallest cushion, so weekday traffic must hold.
Year 2 base dine-in	$274k	$50.7k	$68.9k	81.5%	$154.7k	Solid cushion once dine-in volume stabilizes.
Year 3 full-volume week	$345k	$59.6k	$75.5k	82.7%	$209.5k	Best cushion, but payroll still needs tight control.

What breaks the break-even plan for this restaurant?

Stress test

Base case leaves a wide cushion, but it narrows fast if weekly covers slip under 835, weekend AOV falls below $65, or rent and payroll rise together. The combined stress case is the one that really bites.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$775k	$1.65M cushion	Weekly covers hold above 835.
Revenue shortfall	Revenue drops 10% from the Year 1 plan.	$775k	$1.40M cushion	Weekly covers below 835 start to erode cushion.
Fixed-cost pressure	Fixed costs rise 10% as rent, utilities, cleaning, and payroll climb.	$852k	$1.57M cushion	Higher rent and payroll push the break-even line up.
Margin pressure	Variable expenses rise from 19.5% to 24.5% of revenue.	$826k	$1.60M cushion	Food, beverage, marketing, and card fees squeeze margin.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and variable expenses rise to 24.5%.	$908k	$1.27M cushion	A sales dip plus cost creep is the real downside risk.

Can this restaurant clear break-even before you lock the lease and buy the kitchen?

Founder checklist

Don’t sign the lease or order the full build-out until the model clears $775K in break-even revenue with $15K monthly rent and the first-year plan can support 835 weekly covers. If either slips, the opening cash need gets tight fast.

1Lease load$15K/mo

Confirm the monthly rent still fits inside the $775K break-even revenue target after utilities, insurance, and admin costs.

2Launch pace835/wk

Verify the Year 1 forecast of 835 weekly covers before full staffing, because that is the launch pace needed for break-even.

3Ticket size$38 / $65

Pressure-test the $38 midweek AOV and $65 weekend AOV, since a small ticket drop means you need more covers to reach the same revenue.

4Unit margin80.5% CM

Lock food at 8%, beverages at 4%, marketing at 5%, and card fees at 2.5%; that leaves about 80.5% contribution margin (CM) before fixed costs and payroll.

5Labor ramp9.5 FTE

Stage the labor plan against the Year 1 load of 9.5 FTE and $485K in annual wages so staffing does not outrun the dining room.

6Cash buffer$715K

Keep $715K of cash ready in Month 2 and separate the $375K capex stack from operating break-even, so kitchen equipment, fit-out, and furniture do not drain the opening budget.