How Much $$$$ SHOULD Your Restaurant Be Making?

My speaking and consulting work over the past several years has given me the opportunity to meet literally hundreds of independent restaurant operators from all over the United States and Canada.

Frequently, I find myself in a conversation with an operator that goes something like this. "I own a restaurant and my food cost is around XX%, my labor is running XX% or so and my rent is $X,XXX per month. How are we doing with a net income of XX%?"

Obviously I don't have enough information (or time) to make an intelligent response, but to get the operator thinking in the right direction I ask for just two pieces of information about the restaurant. First, I want to know the annual sales volume and second, the approximate square footage of the restaurant. The square footage would be the size of the entire "footprint" of the facility including storage, restrooms, hallways, etc. I then do a quick mental calculation of sales per square foot.