Do Restaurants Make Money?

Someone once said, if you want to make a small fortune, the best way is to start with a large fortune and open a restaurant!

Looking at the industry these days, it’s hard to disagree. Restaurant closures keep mounting, and as they do, the number of people employed in the sector keeps falling. A survey in May found that one third of hospitality businesses are now operating at a loss…which doesn’t exactly paint a rosy picture for the future.

We’ve talked before about seeing well-known, well-loved restaurants deciding to call it a day, and when you’re still in the early years of running your own place, it’s sobering to watch. So, after just over a year, we thought we’d share how things are going for us. People ask us all the time, and we’ve got nothing to hide… so brace yourself for some numbers!

In the 12 months from June 2024 to May 2025 we took roughly £700,000 in sales.

Sounds like a lot, right!? So where does it all go?

• £120,000 - Straight to HMRC as VAT

• £180,000 - Spent on food and drink from our suppliers…everything from bunches of chives to cases of Champagne!

• £300,000 - To pay our team…including payroll taxes, pension contributions, and the Employer NI which increased in April

Which leaves about £100,000… but sadly, we’re not done yet:

• £25,000 - Rent to our landlord

• £15,000 - Electricity costs to the good people at Octopus

• £40,000 - For accountancy fees, laundry costs, insurance premiums, credit card processing charges and all the other little bits…

Which leaves a profit of £20,000…from a starting point of £700,000 in sales

And you know what? For our first year we’re happy with that.

But in truth, it’s barely enough. When you consider that this is what we have available for re-investing into the restaurant, covering unforeseen costs, and helping us to weather the tough months…and this hot summer has definitely been tough!

So, whilst we didn’t start with a large fortune, and we definitely don’t have a small fortune now…we’ve made it through our first year and a half, doing what we’ve always dreamed of…so we’re doing OK!