Finimpact
Which type of restaurant is most profitable?
Restaurant profit margins are notoriously small. In general, bars are the most profitable type of restaurant because drinks and alcohol have the highest margins of items sold at food establishments.
How do restaurants make money?
Restaurants make money by selling both food and service. You want to make sure that your restaurant serves delicious food but you also need a good atmosphere and friendly, welcoming staff.
How much do top restaurant owners make?
According to ZipRecruiter, top restaurant owners who have long-established businesses can earn as much as $139,500 or more each year.
Your salary will vary month to month
One thing that can be difficult for restaurant owners is the variability of their income. In a good month, you can take a large salary. Some months might see your business make little or no money, making it hard to take a big salary.
Taking personal time will always be costly
If you’re a hands-on owner, it can be difficult to take time off without it having a big impact on your business. Giving your staff a day off for a holiday can mean missing out on a big day of revenue.
However, treating both yourself and your employees to time off is essential for morale and will help you keep your best employees happy.

You may be the boss, but you might not have the biggest paycheck

As the boss, you’re the one in charge, but that doesn’t mean you’ll always have the biggest paycheck. Your income depends on the success of the restaurant while your employees will earn a set salary. There may be times when you earn less than your employees because profits are down.

This is especially true for newer restaurants as it takes time to grow a profitable business.

How do restaurant owners get paid?
You can choose to get paid in two ways:
One is to set a consistent salary and take it each month. This is more predictable but less flexible for your business.
The other is to take a portion of the restaurant’s profits. This can be better for your business by reducing expenses in slow months but leaves you with uncertain income to use for your personal life.

How much does it cost to run a restaurant?

Restaurants are expensive to operate, which is one of the reasons they’re known for thin profit margins. Common costs include:

  • Wages for servers, cooks, and bartenders
  • Food costs
  • Kitchen equipment
  • Utilities
  • Rent
When do restaurant owners start earning money?
Restaurants can often take years before they start turning a profit. It depends on many factors including your location and the type of restaurant you operate. While you can take a small salary at first, expect to wait years before you bring in the big bucks.

About the Authors

TJ Porter

Written by: TJ Porter

Personal Finance Writer

I have in-depth experience in reviewing financial products such as savings accounts, credit cards, and brokerages, writing how-tos, and answering financial questions both simple and complicated.

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Kal Salem

Reviewed by: Kal Salem

CPA, PMP and Finance Consultant

A CPA and finance professional working with small businesses to educate owners and grow alongside their businesses. He holds a Masters in Accounting and a BS in Supply Chain Management. Owner at Salem CPA Services LLC.

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Somer G. Anderson Ph.D.

Fact checked by: Somer G. Anderson Ph.D., CPA

Accounting and Finance Professor

Somer G. Anderson has been working in the Accounting and Finance industries for over 20 years as a financial statement auditor, a finance manager in a large healthcare organization, and a Finance and Accounting professor at Maryville University.

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