The 3 numbers that predict whether your restaurant closes in the next 6 months
I've walked into a lot of restaurants and bars in the final stretch before they shut down. Almost every one of them was tracking the wrong things — or nothing at all. If you own a venue and things feel tight, check these three numbers this week:
1. Prime cost (food + labor as % of revenue). If you're above 65%, you're in danger territory. Above 70%, you're likely losing money on most shifts even if the register looks busy. Most owners know their food cost OR their labor cost. Almost none track both together weekly.
2. Days cash on hand. Not "how much is in the account," but how many days you could run at current burn if revenue stopped tomorrow. Under 14 days means one bad week (a slow holiday, a broken walk-in, a health inspection) can put you in a hole you can't dig out of.
3. Table turn time vs. your break-even turn time. Most owners have never calculated the second number. If your average turn is slower than what your rent + labor actually requires to break even, you're subsidizing every table with hope.
The venues that come back from the brink almost always fix these three before anything else — not the menu, not the marketing, not the decor. Cash flow and cost structure first. Everything else is downstream.
Happy to break down how to calculate your own numbers if anyone wants to drop their situation below.
