Quick Answer

Prime cost is the sum of your Cost of Goods Sold (food and beverage cost) plus total labor cost. It's called 'prime cost' because it's typically the largest and most controllable expense in a restaurant. Healthy full-service restaurants target prime costs of 55-65% of revenue. Quick-service restaurants typically target 50-60%. A prime cost above 70% almost always signals a cash flow problem ahead.

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Restaurant Cash Flow Calculator

Calculate your weekly cash position, prime cost ratio, and break-even revenue. Free. Embeddable. No login.

Enter Your Numbers

$ / week
Food + beverage + catering before any deductions
%
Industry target: 28-35% for food; 18-24% for beverage
%
All wages + tips + payroll taxes. Target: 28-35%
$
$
$
Marketing, supplies, insurance, repairs, POS fees, etc.

Your Weekly Cash Flow

Gross Revenue $25,000
Food & Beverage Cost − $7,500
Labor Cost − $7,500
Prime Cost Total $15,000
Occupancy / Rent − $3,000
Utilities − $800
Other Expenses − $1,200
NET WEEKLY CASH $5,000
Net Profit Margin 20.0%
Prime Cost Ratio 60.0%
Monthly Revenue Est. $108,631
Prime Cost vs. Revenue 60.0%
Cash Flow Assessment
Your prime cost ratio of 60% is within the healthy range. Weekly net cash: $5,000. MCA eligibility estimate: $100,000-$130,000 based on monthly deposits of approximately $108,631.
A commercial restaurant kitchen with stainless steel equipment and overhead ventilation
The benchmarks below are industry-typical figures, not a promise about what your restaurant will see.

Restaurant Industry Benchmarks (2026)

Food Cost %
28-35%
Full-service target
Labor Cost %
28-35%
All-in including taxes
Prime Cost
55-65%
Food + labor combined
Occupancy
5-10%
Rent as % of revenue
Net Profit Margin
3-9%
Average US restaurant
Cash Reserve
30-60 days
Avg. is only 16 days

Sources: National Restaurant Association 2026 Report, Toast Restaurant Benchmarks 2025.

Where the Default Example's $25,000 in Weekly Revenue Goes

Weekly revenue minus food, labor, and overhead equals net cash Waterfall diagram showing $25,000 in weekly gross revenue reduced by $7,500 in food and beverage cost, $7,500 in labor cost, and $5,000 in combined rent, utilities, and other expenses, leaving $5,000 in net weekly cash, using the calculator's default input values. Gross weekly revenue $25,000 Food & beverage cost (30%) $7,500 Labor cost (30%) $7,500 Rent + utilities + other $5,000
Net weekly cash $5,000
A line cook prepping ingredients at a restaurant kitchen station
Prime cost is where most of a restaurant's weekly revenue actually goes before anything else gets paid.

Prime Cost Ratio: This Example vs. Industry Benchmarks

Prime cost ratio compared to healthy and warning thresholds Bar chart comparing the default example's 60% prime cost ratio to the healthy full-service target ceiling of 65% and the 70% level that signals a cash flow warning. This example: 60% Healthy target ceiling: 65% Cash flow warning level: 70%
60%
of restaurants close in Year 1
National Restaurant Association
16
average days of cash reserve
JPMorgan Chase Institute
3-9%
average restaurant net margin
Toast Industry Report 2025

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Restaurant Cash Flow FAQ

What is prime cost in a restaurant?
Prime cost is the total of your Cost of Goods Sold (food and beverage) plus your total labor cost. It's your two largest controllable expenses. Healthy restaurants target prime costs of 55-65% of revenue. Above 70% is a warning sign that your cash flow will be under constant pressure. Below 55% is excellent but uncommon outside of high-volume quick-service formats.
How much working capital does a restaurant need?
Target 1-2 months of operating expenses as liquid cash reserve. For a restaurant running $50,000/month in expenses, that's $50K-$100K in accessible capital. The average US restaurant holds only 16 days of cash, which is why a single slow week, equipment failure, or unexpected expense can cause a crisis. A merchant cash advance, business line of credit, or invoice advance are common bridges when reserves run low.
Can a restaurant get a merchant cash advance?
Yes. Restaurants are one of the most common and most eligible businesses for MCA funding. Restaurants have daily credit card and POS deposits, which is exactly what MCA underwriting is based on. T.A.G. works with funders who specialize in restaurant cash advances, with minimum requirements of 6 months in business and $4,000-$6,000/month in deposits; the funding provider sets the actual decision and funding timeline after reviewing a complete file.
What is a good net profit margin for a restaurant?
The average full-service restaurant earns 3-9% net profit margin. Quick-service restaurants (QSR) typically reach 6-9%. Fine dining is often 3-5% (higher check but higher overhead). A restaurant consistently under 3% net margin is operationally thin. One bad month can wipe out the buffer. If your calculator shows a negative net, the issue is almost always in prime cost (food or labor), rent as a percentage of revenue, or both.
What is a good food cost percentage for a restaurant?
Target food cost percentages vary by restaurant type: full-service restaurants target 28-35%; quick-service and fast-casual target 25-32%; fine dining targets 28-38% (lower percentage but higher margin per ticket). Bars typically run 20-25% on beverage. If your food cost consistently exceeds 38%, examine portion control, purchasing prices, waste/theft, and menu pricing.