Restaurant Operating Expenses: Types & Examples

Restaurant Operating Expenses: Types & Examples
Coming up next: Restaurant Income Statement: Example & Template

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:02 Intro to Running Restaurants
  • 0:39 The Food in Restaurants
  • 1:13 The Staff in Restaurants
  • 2:03 The Venue of Restaurants
  • 2:32 The Overhead of Restaurants
  • 3:08 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Timeline
Autoplay
Autoplay
Speed
Lesson Transcript
Instructor: Kaitlin Oglesby
Ever thought of running a restaurant? Before you jump in, you may want to review this lesson on restaurant operating expenses. From food to table linens, this lesson introduces you to many of the expenses you'll encounter.

Intro to Running Restaurants

Have you ever sat down at a fancy restaurant and wondered how they can justify charging so much for their food? $14 for a salad is not unheard of, after all, and that's not even at a three-star establishment! That is not even acknowledging the markup for drinks, ranging from $3 for a glass of tea to hundreds of dollars for a bottle of wine. However, restaurants have a great deal of operating expenses, which are costs that they have to cover through the sale of food and beverages. In this lesson, we'll take a look at many of those expenses and see how they contribute to the restaurant's bottom line.

The Food in Restaurants

For many restaurants, food is the most costly operating expense. After all, the quality of food served at a typical restaurant, especially those that err towards fine dining, is a world away from what we typically find in our neighborhood grocery store. In fact, even if your supermarket does routinely have Chilean Sea Bass or grass-fed dry-aged Wagyu beef, they are among the most expensive items there. Restaurants have to pay top dollar for their food, or else they won't have any return business. In fact, a typical restaurant spends between 30% and 40% of its entire budget on food.

The Staff in Restaurants

Unless you've ordered steak tartare, that aforementioned steak does not just come out on your plate raw. Instead, someone cooks it. And someone cleans the plate and the pan. And someone manages the expenses. And someone provides publicity for the restaurant. See a trend?

Expenses of the staff, or the employees of the business, are often neck and neck with food as the most expensive line item in a restaurant's budget. This is particularly shocking, considering that your tips pay much of a server's salary, but think about it: cooks, dishwashers, managers, janitors, and more must be paid from somewhere, and that somewhere comes out of the cost of the entree. In fact, you can budget another 20% to 40% for staff expenses. It is even more costly if the place has some relation to a famous celebrity chef.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support