Introduction to Breakeven Analysis

The Menu Tools Breakeven Analysis area provides you with a functional tool to determine your necessary minimum daily revenue and maximum expenses.

Every successful business needs to know what these basic "breakeven" figures are to successfully manage their bottom line. Menu Tools also provides you with valuable definitions, benchmarks and Canadian Operating Ratios for your information.

Introduction to Breakeven

The Menu Tools Breakeven Analysis tool is a quick and simple way to determine minimum sales and maximum expenses to reach your financial breakeven. By benchmarking expenses as compared to revenues, the breakeven analysis will calculate for you the necessary sales, the necessary average check amount and number of customers required per day to pay your bills. This is important information that every business needs to know but few take the time to understand. Menu Tools has made it easy for you with this Breakeven Analysis template and offers ideas on how to adjust and improve your bottom line.

The Breakeven Analysis takes into account Prime costs (food, labour & beverage), Occupancy Costs (rent, utilities, etc.) along with fixed and variable Miscellaneous costs and compares them to your revenues.

Use this tool to:

  • Analyze an existing business
  • Help decide on the feasibility of a new business
Introduction to Analyze Your Breakeven

Using a dollar revenue as the example, the dollar revenue would diminish quickly given the following example:

  Budget  
Food service dollar sale $1.00 or 100 %
Minus the food cost .30 or 30 %
Sub total balance .70 or 70 %
Minus the labour cost .29 or 29 %
Sub total balance .41 or 41 %
Minus occupancy cost .10 or 10 %
Sub total balance .31 or 31 %
And so on  

See CRFA operating ratios as a national average to benchmark against.