Steakhouse Break-Even Analysis: About $32K Monthly Revenue

Fixed costs $9.4K Monthly base

Contribution margin 83.5% After variable costs

Break-even revenue $11.3K Monthly target

Break-even timing Month 3 Launch ramp

Break-even calculator

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

Lean Base Full

Monthly revenue Revenue sets the pool left to cover fixed costs after direct costs. $ Low sales High sales Variable expenses These are the costs that rise as sales rise, like food, packaging, marketing, and card fees. $ Tight costs Higher costs

Money available to cover fixed costs $50,198 $60,117 revenue - $9,919 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base that contribution margin must cover. $ Lean base Heavier base

Break-even chart Revenue Total costs

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

Cost classification

Break-even is only useful if each expense is classified by how it behaves as covers rise. Treating payroll, food, and fees the same can make Month 3 break-even look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Rent, $8,000 per month	Fixed	Hold flat in monthly break-even until the lease or space changes.	Spreading rent per cover and assuming it falls when sales dip.
Insurance Property Tax, $600 per month	Fixed	Include as a steady overhead load in every operating month.	Leaving it out because it does not tie to daily covers.
Raw Ingredients, 10.0% of Year 1 sales	Variable	Scale directly with revenue; menu mix and waste can move margin fast.	Treating all food purchases as fully controllable each week.
Packaging Supplies, 2.0% of Year 1 sales	Variable	Model as sales-linked, especially for carryout or packaged orders.	Forgetting small supply lines that rise with order count.
Marketing Promotions, 3.0% of Year 1 sales	Variable	Tie to sales while testing whether promotions add profitable covers.	Counting discount-driven revenue without the matching promotion spend.
Credit Card Fees, 1.5% of sales	Variable	Apply to card-based revenue as a direct transaction drag.	Using gross sales as contribution before payment fees.
Utilities, $800 per month	Semi-variable	Keep the base bill, then flex usage with kitchen volume and service hours.	Modeling utilities as fully fixed when higher covers extend usage.
Manager coverage	Semi-fixed	Step up only when volume forces added supervision or longer coverage windows.	Treating all payroll as fixed, or flexing managers with every cover.

How does break-even shift from lean Year 1 to full Year 5 for this steakhouse?

Scenario table

As the steakhouse scales, variable cost share falls from 16.5% to 13.0%, so more of each sales dollar is left to cover rent and payroll. Fixed overhead rises too, which is why break-even dollars still move up even as the cushion improves.

Planning figures use model assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean Year 1 steakhouse	$60.1k	$9.9k	$26.8k	83.5%	$23.4k	Above break-even, but the cushion is still tight.
Base Year 3 steakhouse	$157.0k	$23.2k	$33.0k	85.2%	$100.8k	Healthy buffer; fixed costs are spread across more sales.
Full Year 5 steakhouse	$274.3k	$35.7k	$38.0k	87.0%	$200.6k	Strong cushion; break-even risk drops if traffic holds.

What breaks the break-even plan if traffic softens or costs rise?

Stress test

Year 1 revenue is about $60,100 against a $32,000 break-even point, so the cushion is about $28,100. The plan still works, but slower weekday covers, higher rent, and waste can erase that buffer fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$32,000	$28,100 cushion	The plan clears break-even with room to spare.
Revenue shortfall	Monthly revenue falls 10% to $54,090 on weaker weekday covers.	$32,000	$22,090 cushion	You still clear break-even, but the cushion drops by $6,010.
Fixed-cost pressure	Fixed costs rise by $1,000 per month, mainly rent or labor.	$33,200	$26,900 cushion	Small overhead bumps push break-even up fast.
Margin pressure	Variable expenses rise 1 point from ingredient waste or card fees.	$32,400	$27,700 cushion	Even a small cost leak trims the cushion.
Combined pressure	Fixed costs rise by $1,000 and variable expenses rise 1 point.	$33,600	$26,500 cushion	Traffic softness plus cost creep narrows room fast.

What should a founder verify before signing the lease and opening the steakhouse?

Founder checklist

Verify the site can support about $60.1K in Year 1 monthly sales before you lock the lease, hire the full team, or buy the opening build-out. The model only works if demand, rent, payroll, and cash all clear the Month 2 trough before break-even in Month 3.

1Sales target$60.1K/mo

Confirm the site can really produce this Year 1 sales pace, because the break-even floor is much lower than the operating target you need.

2Fixed load$26.8K/mo

Check that $8K rent plus the other fixed bills can fit the traffic plan without forcing volume too far above the break-even line.

3Margin mix83.5% CM

Keep raw ingredients near 10.0% of sales and the rest of the variable load near plan so rent and payroll still have room to clear.

4Payroll ramp$16.25K/mo

Start near this payroll and add more full-time labor only after service volume proves the staffing model can hold peak shifts.

5Cash cushion$759K min

Keep this reserve in view because the cash low point hits in Month 2, before break-even lands in Month 3.

6Build-out fit$178K

Confirm storage, refrigeration, cooking equipment, venting, seating, and service flow before this spend, and hold extra marketing until cover trends prove demand.