Bricks and Mortar Made Simple
Margins: What You Need to Know (Cafés, Pubs & Restaurants)
If you're running a physical hospitality venue, your margins are everything. They decide whether you're taking home a profit or just keeping the doors open.
1. Know Your Key Terminology
Gross Profit = Sales – Direct Costs (like food, drink, packaging)
Gross Margin = Gross Profit ÷ Sales × 100
Net Profit = What’s left after all costs (rent, staff, utilities, marketing etc.)
Net Margin = Net Profit ÷ Sales × 100
Aim for:
Gross Margin: 65–70%
Net Profit Margin: 10–15%
2. Use the 30/30/30 Rule
A quick and easy breakdown to help you track your spend:
30% on food & drink (cost of sales)
30% on staffing
30% on overheads (rent, rates, energy, etc.)
10% left as net profit
If one category starts creeping up, the others need to give way—otherwise, your profit vanishes.
3. Watch the Hidden Leaks
In physical venues, it’s often the slow leaks that cost the most:
Under-used staff clocked in
Wastage or over-ordering
Poor portion control
Energy inefficiencies
Small tweaks here can drive major improvements in profitability.
4. Menu Management Matters
It’s not enough to know what sells well—you need to know what earns well.
Run a profitability check monthly:
If a dish costs £3.50 and sells for £10, great.
If it costs £6.00 and sells for £10, not so great.
And if it sells well and has low margin, you’re working harder for less.
Final Thought
Margins aren’t about penny-pinching. They’re about working smarter—so you can reinvest, pay yourself properly, and grow.
Need help reviewing your margins or costing your menu?
I work with local hospitality businesses to make sure your hard work translates into sustainable profit.