How Much Does a Restaurant Owner Make?
March 05, 2020
Each restaurant establishment has its own unique set of expenditures and profits. For example, a large, fine dining seafood restaurant will have different labor costs and equipment needs than a small, mom-and-pop breakfast spot.
Average Salaries for Restaurant Owners
On average, restaurant owners can see salary ranges from $24,000 a year to $155,000 a year. That’s quite a broad range. Restaurant location, size, menu offerings, and amenities all factor into these salary projections.
Want to know what to expect for your salary? Your local restaurant supply store provides information on what factors impact owner salaries.
Calculating Your Salary
As a restaurant owner, your salary depends on two main factors: your operational costs and your sales. Essentially, your salary will be linked to your profits, which can vary based on a range of factors:
- First Year vs. Subsequent Years. Your first year in the restaurant business will have higher operating costs, and potentially less profit. This could mean an initial lower salary as you establish your business.
- Seasonality. Weather affects dining out trends. Cold rainy days might keep customers at home, while warm weather can encourage an outing. As a result your salary could change from month to month or from season to season.
- Location. A restaurant’s success is often tied to its location. Parking, accessibility, and population density all influence your customer base. Restaurants with access to parking in high foot-traffic areas could see higher profits, which translates to higher owner salaries.
- Vendors. Understanding food costs are crucial to maintaining profits. Partner with wholesale restaurant suppliers that provide high-quality products at competitive price points. Keeping food costs in check can help increase profits.
How Do You Calculate Your Salary?
Since restaurant owners’ salaries vary widely, how do you go about calculating yours?
In most restaurants, it’s typical for an owner to take less than 50 percent of the profits as salary. The remaining 50 percent goes toward any back debts and upgrades that will benefit the business.
Before you go about determining your salary, first calculate your profit margin. Knowing your profit margin allows you to ascertain your salary based on your net profits. Once you’ve determined the money that’s remaining after you’ve paid all your operating costs, you can determine your base salary.
There are a variety of factors that influence restaurant owner salaries, such as location, expenses, and even the time of year. Restaurants with higher profit margins can pay out higher owner salaries. Once you have your financials in check, engage in some savvy marketing ideas to further increase sales.
Smart Foodservice, Where Restaurants Buy Better
Smart Foodservice is your restaurant partner. We invite you to come visit one of our many convenient locations and meet our team. Our associates get to know their customers and provide personalized service. What’s more? We offer professional services, quality products, and food service expertise to help you on your restaurant journey.
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