Prime cost is the single most important number in restaurant finance. It combines your food cost and labor cost into one metric that tells you whether your core operations are profitable. Most successful restaurants keep prime cost below 60% of revenue. Above 65% and you’re likely struggling to turn a profit regardless of how busy you are.

Food cost percentage measures what you spend on ingredients relative to food sales. The target varies by concept. Fast casual restaurants often run 25% to 30%. Full service restaurants typically aim for 28% to 35%. Fine dining can run higher because guests expect premium ingredients. The number itself matters less than tracking it consistently and understanding why it moves.

Food cost creeps up for predictable reasons. Portion control gets sloppy. Vendors raise prices without you noticing. Waste increases because prep cooks make too much or walk-in organization falls apart. Theft happens. Without weekly tracking, you won’t catch these problems until they’ve eaten into months of profit.

Labor cost percentage is typically the larger component of prime cost. For full service restaurants, 30% to 35% of revenue going to labor is normal. Quick service runs lower because fewer staff touch each transaction. This includes wages, payroll taxes, benefits, and workers’ comp. Scheduling directly impacts this number, which is why successful operators obsess over matching staffing levels to expected covers.

Beyond prime cost, track your cash flow weekly. Restaurants operate on thin margins with significant timing mismatches. You pay vendors before customers pay you. Payroll hits every two weeks regardless of sales. Rent is fixed. A profitable month on paper can still create a cash crisis if you’re not watching the actual movement of money.

Average check size and table turnover matter for understanding revenue capacity. If your average check drops, figure out why. Are servers not upselling? Did you lose high-margin items from the menu? Is your clientele shifting? Table turnover tells you how efficiently you’re using your seats. A restaurant with 50 seats turning tables twice per service generates very different revenue than one turning them three times.

Break-even analysis helps you understand the minimum sales needed to cover fixed costs. Knowing your break-even point lets you make informed decisions about hours of operation, staffing during slow periods, and whether a second location makes financial sense.

The challenge for most restaurant owners isn’t knowing these metrics exist. It’s having accurate financial data to calculate them. If your books aren’t reconciled monthly and your income statement doesn’t separate food costs from other costs of goods sold, you’re guessing instead of managing. A Boca Raton fractional CFO with restaurant experience can help you build the reporting infrastructure to track what actually matters and make decisions based on real numbers instead of gut feel.