Chartered Financial Analyst with expertise in the hospitality and food & beverage industries.
Find out how many customers your bar needs to serve each month to be profitable. Enter any three variables—Monthly Fixed Costs, Avg. Spend per Customer, Avg. Cost per Customer, or Breakeven Customers—to solve for the fourth.
Bar Breakeven Calculator
Bar Breakeven Formula
The breakeven formula for a bar finds the number of customers (Q) you must serve for your revenue to cover all monthly fixed and variable costs (like alcohol and food).
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Spend per Customer (P):
P = (F / Q) + V
Solve for Avg. Cost per Customer (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., rent, staff salaries, utilities, insurance, liquor licenses).
- Avg. Spend per Customer (P): The average “check size” or revenue from one customer visit.
- Avg. Cost per Customer (V): The average variable cost for one customer (e.g., cost of alcohol, food, and payment processing fees).
- Breakeven Customers (Q): The total number of customers you need to serve each month to reach $0 in profit.
Related Calculators
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What is a Bar’s Breakeven Point?
A **Bar’s Breakeven Point** is the exact number of customers (Q) you need to serve each month to cover all your operating costs. It is the minimum level of business required to stop losing money and begin turning a profit. For a bar owner, this number is essential for managing staffing, inventory, and pricing.
**Fixed Costs (F)** are your consistent monthly expenses, regardless of how many drinks you pour. This includes rent/mortgage, full-time staff and bartender salaries, utilities, business insurance, and the amortized cost of your liquor license.
**Variable Costs (V)** are the costs that increase *directly* with each customer served. This is primarily your “pour cost” (the cost of the alcohol and mixers in the drinks they buy) and any food costs. It also includes credit card processing fees.
The **Contribution Margin** (P – V) is the profit from a single customer that goes toward paying your fixed costs. If the average customer spends $35 (P) and their drinks/food cost you $10 (V), your contribution margin is $25. This calculator finds how many $25 “profit chunks” you need to cover your total fixed costs.
How to Calculate Bar Breakeven (Example)
Let’s calculate the breakeven point for a neighborhood bar.
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Identify Monthly Fixed Costs (F):
Your rent is $8,000, staff salaries are $10,000, and utilities/licenses/insurance are $2,000. Your (F) is $20,000.
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Identify Avg. Spend per Customer (P):
After tracking sales, you find the average customer spends $40 per visit.
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Identify Avg. Cost per Customer (V):
Your pour cost (alcohol) and food cost average 25% of the sale price. So, `0.25 * $40 = $10`.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per customer: $40 (P) – $10 (V) = $30.
Next, divide the fixed costs by this margin:
Q = $20,000 / $30 = 666.67 -
Conclusion:
You must serve 667 customers each month (or about 22-23 per day) to cover all your costs and start making a profit.
Frequently Asked Questions (FAQ)
Pour cost (the cost of alcohol as a percentage of its sale price) is your main (V). A typical target for a bar is 18-24%. If you also serve food, your food cost will be higher (25-35%). Your (V) is a blended average of these costs based on what the average customer buys.
At the end of the night (or week), divide your total sales revenue by the total number of customer checks (receipts). For example, `$10,000 in sales / 250 checks = $40` average spend per customer.
If you pay your core bartenders a fixed salary, it’s a **Fixed Cost (F)**. If you pay them an hourly wage and only schedule them based on demand (e.g., more bartenders on a busy Friday), those hourly wages can be considered a **Variable Cost (V)**.
Enter your (F) (e.g., $20,000), (V) (e.g., $10), and your target number of customers (Q) (e.g., 800 per month). Solve for (P): `P = ($20,000 / 800) + $10 = $25 + $10 = $35`. You must have an average check size of at least $35 to break even at 800 customers.