How Much Do Restaurant Owner Make: Cost Analysis

Quick Summary: Are you starting a new restaurant? Are you curious to know how much a restaurant owner makes? We are here to put your curiosity to rest by helping you understand precisely how much you will earn being a restaurant owner.

Whether you’re new to the food service sector or have years of experience working in it, opening a restaurant poses a variety of problems. From Creating a restaurant business plan and executing it to managing the operation, you have plenty of challenges. But, How much a restaurant owner makes or earns is the big question everyone wants to know. While some people would believe that this number depends on the type of restaurant you run, the reality is that a variety of things impact it.

So, in this article, we will understand the factors that help estimate earnings and how to maximize revenues. Let’s explore;

How Much Do Restaurant Owners Make? A Rough Estimate

The actual amount a restaurant owner earns depends on the restaurant’s success. Initially, you may not be able to earn even a single penny. But as soon as the restaurant sales increase, you can start getting your salary. Being a restaurant owner, you manage your own company, and you have control over salary and earnings. That means the more profits your restaurant makes, the higher salary you can afford to pay yourself.

How Do You Become A Restaurant Owner?

Three critical factors make you a restaurant owner: research, preparation, and dedication.
Brainstorm ideas about what type of restaurant you want to start.

Prepare the preliminary budget, including the expenses to prepare food and market your restaurant.

Create a restaurant business plan to accumulate funds, and know how much you want to charge for the food you serve and how you will achieve your profit goals.

Plan a menu by taking expert advice and with the help of software.

Choose a location that will help you get more customers daily.

These are the basic things required to start a restaurant.

Average Restaurant Owner Salary -Data Proven

According to Indeed, the average base salary of a restaurant owner in the United States is $65,760 annually.

However, the salary may range from as low as $20,000 annually or may be low and can go upwards of $140,000, depending on the type of restaurant you own. The salary of a restaurant owner depends on two main factors:

1. The restaurant sales
2. The expenses

The first year of operation usually incurs higher expenses, and you get less income. So you can start out making a low salary in the first year of your restaurant opening.

How to Calculate Restaurant Owner Salary Even Before You Own a Restaurant?

So, you have started your restaurant and know the average money you can make. But the next big question is —how do you decide how much you get paid if you run a restaurant? Simply put, how to calculate a restaurant owner’s salary?

Let’s look at the factors that will help you calculate actually how much a restaurant owner makes.

You need to determine the profit margin: Not only does it help you understand how successful your business is, but it also gives insight so you can maximize the profit margin and minimize the expenses.

Identify the ownership structure: It will significantly influence a restaurant owner’s salary.

Sales forecast: This is important as it will help you make good decisions related to business, including salary. Determining future earnings and trends will give a rough idea of how much profit your restaurant is going to make.

These are the rough estimations through which you can calculate the salary and find out how much you are going to make.

How Much Does It Cost To Run A Restaurant?

The cost to run a restaurant will vary depending on these factors;

• The size of the restaurant
• What you want to serve
• What is the location
• The cost of real estate

When you figure out the cost of these factors, the next you need to figure out is;

Staff: How much do you have to pay for servers/waiters, cooks/chefs, and bartenders? How much does food cost you?

Kitchen Equipment: How much have you to spend on kitchen equipment as you need to spend some big bucks on them? You can figure out the expenses by determining the list of kitchen equipment you need for your restaurant.

Utilities and Rent: Utilities and rent are the other factors you need to figure out how much it will cost for your restaurant.

When Do Restaurant Owners Start Making Money?

As of now, you know how much a restaurant owner makes. But did you consider when a restaurant owner starts earning money?

It may take a few months to years for restaurant owners to start earning money. However, in some cases, restaurant owners make a salary right away. For example, they pay themselves through loans or startup funds.

What Do Restaurant Owners Do?

Simply put, they do everything. Restaurant owners can have different responsibilities depending on the level of their involvement with their businesses. From managing the official paperwork, delegating the daily operations, and hiring the right staff to create a concept, menu, food cost controls and marketing strategies for restaurants. Typically, a restaurant owner does the following things;

• Creating the right concepts for restaurants, such as name, theme, and menu
• Hiring the right staff, such as head chefs and general manager
• Handling finances
• Managing and coordinating the supply chain
• Marketing their restaurant business

What are the Types of Restaurants from Earning Perspective

Restaurants of different kinds have varying levels of profitability. Here are the top five restaurant business models and what makes them successful.

Pizzerias: The demand for Pizza is consistently high in most countries, including the U.S., Canada, the UK, and other countries.

Bars: Bars are considered the most profitable business as the markup on the alcoholic product is higher than on food.

Food Trucks: With less overhead, and limited menus, food truck costs less and make good profits.

Diners: Breakfast place require less expenses while you make good profits. Restaurant owners can earn good money starting a breakfast place.

Delivery-only: Want to start earning money right from the beginning? You can begin delivery only restaurant business. For example, you create a meal prep business, ghost kitchen, or others that require less upfront cost and a place to run your business.

Also Read: How to Write a Food Truck Business Plan

Bonus Tips: How to Increase Restaurant Profits

Your restaurant’s profit margin can be raised in a variety of ways, from reworking recipes, deciding the menu, and upselling to starting a loyalty program and trying something unique. Mainly, the profits come from sales —the higher the sales, the greater profits your restaurant makes. However, you can dig deeper into increasing restaurant sales and making your restaurant more profitable.

Final Thoughts

We have put all our perfective into this article that helps you estimate how much money a restaurant owner makes. With this guide, you can calculate the restaurant owners’ salaries and explore the potential to increase your restaurant profits. You can also dig deeper or connect with an expert for the same.

FAQ about How Much Do Restaurant Owner Make

Are Restaurants Profitable?

Yes, it’s profitable, albeit the success lies in implementation and execution of plans. If your restaurant is at the right location, has good business models, and has implemented the plan perfectly, then yes, you can make good money out of your restaurant business.

What is the Average Restaurant Income

We have already mentioned in this article that you can $20000 to $150,000 annually. You can refer to the para again for more clarity.

What are the Most Profitable Restaurants?

Well, we have given the top five types of restaurant business that can help you grab more profit. Bars are considered the most profitable restaurant business.