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Key Takeaways
- The baseline fixed monthly operating cost for the eco-friendly restaurant in 2026 is projected to be $43,158, before accounting for variable expenses like ingredients.
- Payroll is the dominant fixed expense, consuming $26,958 monthly and representing over 62% of the total fixed overhead.
- Operators must secure a minimum cash buffer of $582,000 to cover the initial ramp-up and negative EBITDA until the forecasted breakeven date in 14 months.
- Controlling the Cost of Goods Sold (COGS), which is targeted at an exceptionally high 150% of revenue in the first year, is the primary variable cost challenge.
Running Cost 1 : Rent and Common Area Maintenance (CAM)
Lock Down Location Cost
Securing your physical location demands a firm commitment: the $12,000 monthly charge for Rent and Common Area Maintenance (CAM) must be locked in via a long-term lease agreement now. This fixed overhead dictates your minimum viable revenue target from day one, so plan defintely for this outflow.
Inputs for Rent Expense
This $12,000 figure is a non-negotiable fixed operating expense, covering the physical space and shared operational upkeep (CAM). Since it’s constant regardless of sales volume, it sets the baseline for your required monthly contribution margin. You need signed quotes or the lease agreement itself to finalize this number for the 2026 budget projections.
- Fixed at $12,000 per month.
- Covers the physical footprint and shared services.
- Requires a long-term commitment.
Lease Management Tactics
Managing fixed rent means negotiating aggressively upfront, not cutting corners later. Avoid short-term deals; a longer lease often secures a lower effective monthly rate, mitigating renewal risk later on. Watch out for hidden CAM escalators in the lease fine print that can inflate this fixed cost unexpectedly.
- Negotiate term length for rate stability.
- Scrutinize CAM fee structure details.
- Budget for annual fixed rent increases.
Operational Impact
Because Rent & CAM is a fixed $12,000 monthly burden, you must ensure your projected revenue model can sustain this cost even during slow periods, like the midweek lull for this restaurant concept. This cost heavily influences your break-even point before accounting for variable COGS.
Running Cost 2 : Staff Wages and Salaries
Payroll Baseline
Your 2026 staff payroll for 6 FTEs hits $26,958 monthly. This fixed outlay covers essential leadership, including the General Manager ($70k salary) and the Sous Chef ($55k salary).
Fixed Staff Costs
This $26,958 payroll figure is a non-negotiable fixed cost for 2026, representing 6 FTEs. It includes the $70,000 annual salary for the General Manager and the $55,000 annual salary for the Sous Chef. This amount must be budgeted before any revenue hits, as it sits alongside rent and utilities.
- 6 total employees (FTEs).
- GM salary: $70,000/year.
- Sous Chef salary: $55,000/year.
Managing Headcount
Managing this high fixed cost means avoiding unnecessary FTE creep post-launch. Since this is a restaurant, watch out for scheduling gaps that tempt managers to over-hire hourly staff. Adding just one more $40k salaried role pushes monthly burn up by $3,333; you must defintely monitor utilization.
- Don't confuse salaried vs. hourly needs.
- Audit overtime usage monthly.
- Ensure salary bands match local market rates.
Payroll Weight
For a restaurant aiming for sustainability, high fixed payroll demands strong contribution margins on every plate sold. If your average check value is low, this $26,958 monthly payroll—which is about $1,500 higher than the $12,000 rent—will quickly consume operating cash.
Running Cost 3 : Utilities
Fixed Utility Budget
Utilities are set at a fixed $1,500 per month, which is low for a full-service restaurant. This figure directly supports your eco-friendly positioning, assuming efficient equipment minimizes energy draw. If you exceed this baseline significantly, investigate usage spikes immediately. That’s a good sign of operational drift.
Inputs for Utility Cost
This $1,500 covers electricity, gas, and water usage, budgeted as a fixed overhead. Unlike COGS, this cost won't fluctuate with daily sales volume, but efficiency gains rely on the initial setup—think high-efficiency HVAC and LED lighting. Your budget needs to hold this number steady for the first year.
- Base estimate from vendor quotes.
- Factor in seasonal HVAC load.
- Assume zero waste monitoring savings.
Managing Energy Spend
Keeping utilities low requires ongoing discipline, not just good equipment at launch. Since this is a fixed cost in your model, any reduction directly hits the bottom line. Don't let staff override energy-saving protocols, even during busy rushes. If your actual spend jumps past $1,650, you need a utility audit.
- Verify all refrigeration seals monthly.
- Schedule HVAC tune-ups quarterly.
- Train staff on equipment shutdown procedures.
Overhead Context
Compared to the $26,958 monthly payroll or $12,000 rent, utilities are small but critical for brand validation. If you are defintely hitting $1,500, you prove your conservation claims. This small fixed cost helps keep total overhead manageable while you tackle the huge variable risk in COGS (150% of revenue).
Running Cost 4 : Cost of Goods Sold (COGS)
COGS Shock
Your initial ingredient costs are unsustainable, starting at 150% of revenue in 2026. This means you spend $1.50 for every $1.00 earned before factoring in labor or rent. You must fix this cost structure immediately.
Ingredient Breakdown
Cost of Goods Sold (COGS) here covers all raw ingredients for the menu. The projected split shows beverages at 80% of their revenue and food at 70% of its revenue. Since total COGS is 150% of total revenue, this structure makes profitability impossible without immediate adjustment.
- Beverage cost rate: 80%
- Food cost rate: 70%
- Total projected COGS: 150%
Control Inventory Now
This initial 150% COGS figure suggests flawed sourcing or menu pricing relative to ingredient acquisition. You need tight inventory tracking to stop spoilage, which is critical for fresh, local sourcing. If onboarding takes 14+ days, churn risk rises due to waste.
- Negotiate volume discounts early.
- Track spoilage daily.
- Recalculate menu price points.
Profitability Check
If beverage costs are 80% and food costs are 70%, your blended rate of 150% is a major red flag. Your target blended rate should be closer to 30% to 35% for a healthy restaurant model. This defintely requires repricing menus.
Running Cost 5 : Business Insurance and Legal
Fixed Compliance Spend
Insurance and legal overhead for this restaurant setup is a fixed $1,250 monthly commitment. This covers essential liability protection and compliance management. While small next to rent, it’s a non-negotiable baseline spend for operating legally.
Cost Breakdown
This $1,250 covers two distinct fixed items: $500 for business insurance and $750 for the accounting and legal retainer. For a restaurant, insurance must cover property, general liability, and potentially liquor liability. The legal retainer ensures ongoing regulatory compliance support.
- Insurance: $500/month.
- Legal Retainer: $750/month.
- Total fixed overhead: $1,250.
Managing Legal Spend
You manage this by actively shopping insurance quotes annually. Don't just renew; get three competitive bids for general liability coverage. For legal, ensure the retainer scope clearly defines what is covered; avoid paying for ad-hoc work outside that agreement. Defintely review policy limits yearly.
- Shop insurance quotes every year.
- Bundle policies for discounts.
- Define retainer scope clearly.
Risk vs. Cost
Compared to $12,000 in rent and nearly $27,000 in payroll, this $1,250 is low leverage. However, skimping on insurance to save $100 risks catastrophic loss if a serious incident happens on your premises. This cost protects your entire operation.
Running Cost 6 : Technology & Systems
Tech Spend Baseline
Your core technology stack, covering the Point of Sale (POS) system—the software used to process transactions—and essential supporting subscriptions, is a fixed overhead of $300 per month. This is a necessary baseline cost for processing orders and managing operations in your restaurant. Don't confuse this predictable monthly fee with variable tech costs like payment processing percentages.
Calculating Fixed Tech Cost
This $300 covers your software subscriptions, which are fixed regardless of how many customers you serve. You need quotes for the POS hardware/software and any inventory management tools to confirm this number. It’s a small but critical part of your $1,250 in monthly insurance/legal costs.
- Input: Monthly software subscription rates.
- Output: $300 fixed monthly expense.
- Budget role: Predictable overhead.
Managing Software Fees
To keep this cost down, avoid feature creep in your POS selection. Many restaurants overpay for modules they won't use. Negotiate annual contracts instead of month-to-month billing for a potential 10% discount. Churn risk rises if you sign long-term deals before proving concept viability.
- Avoid unused features.
- Try annual prepayment discounts.
- Review integrations yearly.
Operational Necessity
Don't skimp on the POS software; it directly impacts order accuracy and speed, especially during peak dinner service. If your system fails, you stop taking revenue immediately. Treat this $300 as non-negotiable infrastructure, not discretionary spending.
Running Cost 7 : Maintenance & Security
Fixed Maintenance Costs
Maintenance and security are fixed overhead, costing $1,150 per month total. This covers essential cleaning services and required security system monitoring for the restaurant space. Budget this amount consistently each month.
Cost Breakdown
The $1,150 monthly figure is fixed overhead. Cleaning and Maintenance Services are set at $1,000 monthly. Security System Monitoring adds $150 monthly. These inputs are based on vendor quotes for the physical space.
- Cleaning Services: $1,000 monthly
- Security Monitoring: $150 monthly
- Total Fixed Cost: $1,150 monthly
Cost Control Tactics
You can manage service costs by negotiating fixed-rate, multi-year contracts for cleaning. For security, check if your local codes allow for reduced monitoring frequency. Still, hygiene is paramount for a premium dining experience.
- Negotiate longer cleaning contracts.
- Benchmark cleaning rates locally.
- Audit security features annually.
Overhead Impact
This $1,150 is foundational fixed overhead that must be covered every month. It supports the physical location's upkeep and safety compliance. If onboarding cleaning vendors takes too long, operational readiness suffers defintely.
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Frequently Asked Questions
Fixed operating costs are $43,158 monthly in 2026, covering rent, utilities, and payroll for 6 FTEs Variable costs add another 195% of revenue, primarily for ingredients (150%) and credit card fees (25%) You must generate over $53,612 in monthly revenue to cover these expenses