Percentage of Restaurant Sales Spend On Utilities

We had someone ask us just what to expect when running a restaurant. Is the percentage of restaurant sales for utilities high? It actually shouldn’t be that high when figuring out your total costs. From our experience many restaurants budget less than 5% of their total costs to utilities.

Want some real Restaurant Utility Figures?
A study showed that Restaurants in the United States spend on average $2.90 per square foot (ft2) on electricity and $0.85 per ft2 on natural gas annually. This puts you at about 3 to 5 percent on energy costs.

What About Utilities Such As Internet, Cable, Phone?
We would expect a typical bill for these to be around $100 a month for a package of all three. Some businesses even try to reduce their cost by using services such as Google Voice (a free service) for their phone line and even cutting out cable altogether. Of course this all depends on the venue. A sports themed restaurant would need to keep that cable bill with a sports package on top of that.

Advice?
Keep your bills to a minimum.  Why let power bills eat up your profits?  Make sure to keep consumption to a minimum.  Use energy saving appliances when possible and even energy saving light bulbs.

If the average spend on utilities at your restaurant is higher than 5% you should careful look at your numbers and try to reduce that rate.

What is the Average Restaurant Sales Per Square Foot of Space?

Now when seeing what you should even spend on utilities it can also be helpful to figure out what a restaurant might earn on average per sq ft of space as well. Comparing yourself with averages however is not a definitive number. A restaurant in Manhattan has widely different costs than one in El Paso Texas.

There is an easy formula to come up with in  order to find out that number.

To find the average guest check = (total of each check / number of checks)

Take the occupied seats x the average guest check  = average revenue per shift.

If you want a true comparison of average profit margin you could just check out Wendy’s live profit margin history at Ycharts. They seem to average between 4 to 5% in profit.