Startup Restaurant? Calculate These 4 Numbers Before You Open
Startup Restaurant? Calculate These 4 Numbers Before You Open
Published: 1st September 2026
Video
In this video, we answer:
- Why do most new restaurant owners lose money?
- What are fixed costs and why are they important?
- How do you calculate your breakeven point?
- What is gross profit margin and how do you calculate it correctly?
- How do you calculate target profit and daily sales goals?
- What can you do if your projected sales are too low?
Key takeaways
- The hook: You’ve found the perfect location. The food is great. The decor looks amazing. But after three months, you’re losing money—and you don’t know why. Most new restaurant owners fail because they never did the math.
- Step 1: Calculate Fixed Expenses: These are costs that hit you the moment you open—whether you sell anything or not. Rent, staff salaries, utilities, management fees, and even your own salary. If you worked elsewhere, you’d get paid—so include it.
- Step 2: Find Your Breakeven Point: This is the minimum sales you need just to cover your costs—no profit, no loss. Formula: Fixed Costs ÷ Gross Profit Margin = Breakeven Sales Amount.
- Step 3: Understand Gross Profit Margin: Most owners make a critical mistake here. The correct formula is (Selling Price – Cost of Sales) ÷ Selling Price. To achieve a target margin, use: Cost of Sales ÷ (1 – Gross Profit Margin).
- Step 4: Calculate Target Profit: You didn’t open a restaurant just to break even. Formula: (Fixed Costs + Target Profit) ÷ Gross Profit Margin = Target Sales Revenue.
- The final message: If your projected sales are below your target, you have options—reduce fixed costs, adjust pricing, or reconsider the location. New players use luck. Old players use numbers. Do the math before you open.
Full transcript
Voice Specification: Female, confident, authoritative, American accent. Speak clearly with a direct, educational, and slightly challenging tone.
Audio Note: No music, no sound effects. Silent background throughout. Voice only. The same volume must be maintained throughout the whole video.
[0:00 – 0:08] – Hook
Visual: Text on screen, simple and bold.
On-Screen Text: “Thinking of opening a restaurant? Do this first.”
Audio: “You’ve found the perfect location. The food is great. The decor looks amazing. But after three months, you’re losing money—and you don’t know why. Sound familiar? Most new restaurant owners fail because they never did the math.”
[0:08 – 0:18] – Step 1: Fixed Costs
Visual: A calculator and a restaurant receipt. Text: “Step 1: Fixed Costs.”
On-Screen Text: “Step 1: Know Your Fixed Costs. Rent, staff, utilities, your salary.”
Audio: “Step one: calculate your fixed expenses. These are costs that hit you the moment you open—whether you sell anything or not. Rent, staff salaries, utilities, management fees, and yes—even your own salary. If you worked elsewhere, you’d get paid. So include it.”
[0:18 – 0:28] – Step 1 Example
Visual: A simple breakdown: RM22,500 total. Text: “Fixed Costs = RM22,500/month.”
On-Screen Text: “Example: RM4,000 rent + RM12,000 staff + RM1,500 utilities + RM2,000 misc + RM3,000 salary = RM22,500/month.”
Audio: “Let’s use a real example. A small restaurant with rent, 4 staff, utilities, miscellaneous costs, and the owner’s salary totals RM22,500 a month. That’s your debt before you sell a single dish. Many owners don’t even know this number—and that’s why they fail.”
[0:28 – 0:38] – Step 2: Breakeven Point
Visual: Breakeven formula on screen: RM22,500 ÷ 60% = RM37,500. Text: “Step 2: Breakeven Point.”
On-Screen Text: “Breakeven = Fixed Costs ÷ Gross Profit Margin. RM22,500 ÷ 60% = RM37,500/month. RM1,250/day.”
Audio: “Step two: find your breakeven point. This is the minimum sales you need just to cover your costs—no profit, no loss. Using a 60% gross profit margin, RM22,500 divided by 60% equals RM37,500 a month. That’s RM1,250 a day just to stay alive.”
[0:38 – 0:48] – Step 2 Reality Check
Visual: A calculator showing RM2,000 sales and RM450 profit. Text: “Above breakeven = profit. Below = loss.”
On-Screen Text: “Sell RM2,000 = profit RM450. Sell RM1,000 = loss RM150.”
Audio: “Here’s the reality check. If you sell RM2,000 today, your profit is RM450. If you sell only RM1,000, you lose RM150. Most owners don’t know their breakeven—they just guess. And when sales drop, they panic. But if you know your numbers, you know exactly where you stand.”
[0:48 – 0:58] – Step 3: Gross Profit Margin
Visual: Pricing formula: RM10 ÷ 40% = RM25. Text: “Step 3: Gross Profit Margin.”
On-Screen Text: “Wrong: RM10 x 160% = RM16 (37.5% margin). Right: RM10 ÷ 40% = RM25 (60% margin).”
Audio: “Step three: understand gross profit margin. This is where most new owners make a critical mistake. They think a dish costing RM10, sold at RM16, gives 60% profit. Wrong—that’s only 37.5%. To get a true 60% margin, the formula is cost divided by 40%. So RM10 cost means you must sell at RM25. Get this wrong, and the more you sell, the more you lose—without even realizing it.”
[0:58 – 1:10] – Step 4: Target Profit
Visual: Target profit formula: (RM22,500 + RM20,000) ÷ 60% = RM70,833. Text: “Step 4: Target Profit.”
On-Screen Text: “Target Sales = (Fixed Costs + Target Profit) ÷ Gross Profit Margin. (RM22,500 + RM20,000) ÷ 60% = RM70,833/month. RM2,362/day.”
Audio: “Step four: calculate your target profit. You didn’t open a restaurant just to break even—you want to make money, right? If your target is RM20,000 a month profit, with RM22,500 fixed costs and 60% margin, you need RM70,833 in monthly sales. That’s RM2,362 a day. Ask yourself: can your new restaurant realistically achieve that?”
[1:10 – 1:20] – If You Can’t Hit the Numbers
Visual: A checklist appearing: “Lower rent? Reduce staff? Adjust pricing?” Text: “If you can’t hit the numbers, adjust before you open.”
On-Screen Text: “If projected sales are too low: reduce fixed costs, adjust pricing, or reconsider the location.”
Audio: “If your projected sales are below that number, you have options. Reduce your investment in renovation. Negotiate lower rent. Adjust your pricing strategy. Or reconsider the location entirely. Don’t open hoping things will improve—they won’t. Fix the numbers first.”
[1:20 – 1:30] – The Final Message
Visual: A confident owner reviewing a financial report. Text: “New players use luck. Old players use numbers.”
On-Screen Text: “New players use luck. Old players use numbers. Share this with someone opening a restaurant.”
Audio: “So here’s the bottom line: new players open restaurants using luck. Old players use numbers and financial models. If you’re a new startup, don’t gamble with your savings. Know your fixed costs, your breakeven, your gross margin, and your target profit. Do the math before you open.”
[1:30 – 1:40] – Conclusion & CTA
Visual: A question mark with a comment box. Text: “Do you know your restaurant numbers? Comment below!”
On-Screen Text: “Do you know your breakeven point? Share this with a fellow startup owner.”
Audio: “So, do you know your breakeven point? Share this video with a fellow startup restaurant owner—it could save them thousands. And follow us for more real-world F&B business insights.”
[End Screen]
Visual: “Follow for more F&B insights” text with social media icons.
On-Screen Text: “Follow for more F&B insights.”
Audio: “If this was helpful, follow us for more practical F&B business insights. See you in the next one.”
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