Your restaurant has sales but no profit. What should you check?
A full dining room does not guarantee profit. Review dish costs, the team’s work, other costs and cash flow before changing prices or staffing.
Start by identifying what is actually missing
A lack of profit and a lack of cash are different problems. A restaurant may show a profit while paying for extra stock, equipment or earlier liabilities. It may also temporarily have cash despite making losses if some invoices remain unpaid.
Compare sales excluding VAT with costs relating to the same month. Separate operating performance from cash flow. Do not compare VAT-inclusive card receipts with costs excluding VAT, or payments alone with costs allocated to the period.
1. Calculate product and labour costs together, then separately
Prime Cost combines the cost of products consumed with the full cost of labour. Purchases are not equivalent to consumption, so you also need stock values. Labour costs should include the full cost to the employer.
Illustrative example: against PLN 100,000 of sales excluding VAT, products cost PLN 32,000, labour PLN 35,000 and other costs PLN 36,000. These costs exceed sales by PLN 3,000. Turnover alone does not reveal this. It is the result after the listed costs, not automatically net profit. A full calculation requires all costs for the period, including depreciation and finance costs where applicable, and clarity on whether income tax is included. Count each cost only once.
Sales excluding VAT: PLN 100,000
Products and labour: PLN 67,000
Other costs: PLN 36,000
PLN 100,000 − PLN 67,000 − PLN 36,000 = −PLN 3,000
2. Check what remains on your best-selling dishes
A dish’s popularity does not show how much remains after preparation costs. Start with your best sellers. Compare current ingredient prices, actual portions and the recipe in the system. Include preparation waste and cooking losses.
Also check discounts, packaging and sales-platform commissions. The amount remaining after ingredients alone is not restaurant profit; labour and other costs still have to be covered.
3. Match team hours to demand and tasks
Review sales excluding VAT per labour hour on comparable days and at similar times. Recurring quiet periods may indicate a need to change start times or how duties are divided.
Include preparation, deliveries and closing tasks. Do not reduce staffing based on a ratio alone. Record your own working hours so the figures do not hide the owner continually covering for the team.
4. Review other costs and payment dates
Rent, utilities, equipment maintenance, subscriptions and commissions can consume what remains after products and labour. Distinguish recurring from one-off costs, but do not omit either when assessing a period.
Review cash flows separately: overdue payments, stock, equipment purchases, loan principal repayments and owner withdrawals. Not every payment from the bank account is a cost of that month. Confirm the accounting treatment with your accountant.
Where should you start in your restaurant?
Collect data for one complete month and compare it with a similar period. Start with the largest confirmed discrepancy. Agree on a task, a responsible person and a review date. Price increases or staff reductions should follow a diagnosis, not simply the bank balance.
- Sales excluding VAT, broken down by dish and sales channel.
- Purchases and opening and closing stock values.
- Full labour costs and actual hours worked.
- Other costs, liabilities and significant cash flows.
When you need help setting priorities
At Hospitality Pro, I analyse figures alongside daily restaurant operations. Within the agreed audit scope, I investigate discrepancies and recommend actions. If turnover is not translating into the result you expect, tell me about your venue. We will discuss where to start.