The breakeven point is not a simple math exercise. You need to combine your bank balance with the dates money goes out to know whether you can actually hold on. Matching the arithmetic alone won’t keep a business running; you need a cash-flow–based plan that fits real timing.
In the field, two issues typically distort breakeven calculations. First is the habit of undercounting fixed costs. If you omit items such as monthly rent, payroll, card-payment deposit delays, or loan principal and interest, the calculation shows an early breakeven while the bank account is already empty.
The second is ignoring the timing of revenue. Card sales are deposited with a lag measured in business days. Ingredient payments often cluster on specific days of the month.
These timing differences can flip a month’s bank flow upside down.
To make calculations realistic, list fixed and variable costs separately. Put regular outgoings—rent, building management fees, payroll—under fixed costs. Put food-costs, spoilage rates, delivery fees, and promotion costs under variable costs and express them as a percentage of average check.
Accounting breakeven and bank-balance (cash) breakeven are different. In accounting terms, breakeven is when sales cover fixed costs. On a bank-balance basis you must consider deposit and payment dates to confirm you have enough cash to survive. Long gaps between card deposits and ingredient payment dates create liquidity strain.
The practical calculation sequence is straightforward. First, write down your current bank balance and a list of one month’s fixed costs. Next, build sales scenarios from average monthly customer count and average check.
Finally, apply the variable-cost ratio to estimate the actual sales needed and the average daily customer count required.
For example, consider a small dine-in plus delivery shop. Assume monthly rent of ₩3,000,000, payroll ₩5,000,000, and other fixed costs ₩1,000,000, giving total fixed costs of ₩9,000,000. With a variable-cost ratio of 35%, the bank-basis monthly sales required to survive would be about ₩13,850,000.
At an average check of ₩10,000, that works out to roughly 46 customers per day.
Connect these results to strategy. If 46 customers per day is unrealistic, consider changing the store layout or menu mix to raise the average check. Negotiate rent or temporarily close to shift ingredient-payment timing and reduce cash strain. These measures should aim to limit losses and preserve the ability to try again, not just to survive at all costs.
The single number to check today is how long your current bank balance will last until the next rent due date and the next ingredient payment date. That one check tells you whether the accounting breakeven can realistically appear in your bank account.
Frequently asked questions
What’s the difference between accounting breakeven and bank-balance breakeven?
Accounting breakeven means sales cover fixed costs. Bank-balance breakeven accounts for timing differences between income and expenses to see whether cash actually remains. Delays in card deposits or clustered ingredient payments can leave a bank account empty even if accounting shows profit.
How should I set the variable-cost ratio?
Add food costs, delivery fees, discount costs, and spoilage rates for the past three months and calculate them as a percentage of the average check. It’s safer to include a 5–10% buffer. Creating separate scenarios for peak and off-peak periods makes the plan more realistic.
If customer numbers are low, do I have to close immediately?
Not necessarily. First calculate how long you can survive based on your bank balance, then explore improvements such as rent negotiation, menu changes, or optimizing delivery channels. If improvement potential is low, a planned exit preserves resources and increases chances for a successful retry.