Restaurant Sales Expectations
Anyone who has ever dreamt of owning a restaurant always wants to know how much money they can make in restaurant sales. And rightfully so! There is a lot of money up for grabs in the billion-dollar restaurant industry and the success stories of owners going from rags to riches are endless. The good news is that success is almost inevitable if you have a great product, good location, excellent processes in place for operations, and the right people working for you.
So what’s my real potential for gross restaurant sales?
So let’s talk about the upside potential for restaurant sales of a successful restaurant. Healthy smaller restaurants may gross at least $250,000 annually, while larger restaurant businesses can gross into the multi-millions annually. That being said it’s just as important to do some homework regarding expected expenses and cash flow as well.
How much money should a healthy restaurant cash flow?
At least 15% of gross revenue is healthy.
How much will expenses be?
Expenses will vary depending on location, square footage, number of employees, food costs, and type of business. Some rules to live by in the restaurant business include the following:
1) Rent costs should be 6-8% of gross revenue
2) Food costs should be 25%-33% of gross revenue
3) Liquor costs should be 20%-30% of gross revenue
4) Employee costs should be 25%-35% of gross revenue