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.

🍽️

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 $2,500
Net Profit Margin 10%
Prime Cost Ratio 60%
Monthly Revenue Est. $108,500
Prime Cost vs. Revenue 60%
Cash Flow Assessment
Your prime cost ratio is within the healthy range. This revenue profile supports MCA eligibility in the $25,000–$40,000 range based on monthly deposits.

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, T.A.G. Business Funding internal data.

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
67%
MCA approval rate for restaurants
T.A.G. funder network data

Embed this calculator on your website — free, forever

<iframe src="https://funding.towersassetgroup.com/restaurant-cash-flow-calculator" width="100%" height="800" frameborder="0" style="border-radius:12px;box-shadow:0 2px 16px rgba(0,0,0,0.08);" title="Restaurant Cash Flow Calculator by T.A.G. Business Funding"></iframe>

Free to embed on restaurant industry blogs, SBDC sites, and educational resources. No attribution required, but a link to funding.towersassetgroup.com is appreciated.

Running Short on Restaurant Working Capital?

T.A.G. specializes in restaurant funding. No collateral, 500+ FICO, funded in 24–72 hours. Free application.

Apply — Restaurant Funding → Restaurant Funding Guide

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 same-week funding and minimum requirements of 6 months in business and $10,000/month in deposits.
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.