How Much Do Restaurant Owners Make?

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July 7, 2022
how much do restaurant owners make

If you are thinking of opening a restaurant, or are currently operational (but have had a bad month) you are likely wondering how much do restaurant owners make. The good news, you’ve come to the right place to find out.

In this article we will explore how much restaurant owners make in Canada and the USA, as well as profitability factors that will impact the success of your store and take home earnings. Let's get started.

How much do restaurant owners make?

Due to a large number of variables, including type of restaurant, amount of profits and expenses, and more, what a restaurant owner will make varies widely.  Based on research, the average numbers are anywhere from $29,000USD to $200,000USD.  The average of that range being around $60,000USD in annual earnings.

Restaurant owners can make anywhere from $29,000USD to $200,000USD depending on many factors.

What is the average salary for a restaurant owner?

It is hard to put a label on how much restaurant owners make with one salary, however, based on recent 2022 data, the average salary for an American restaurant owner is 65,000 USD, and the average for a Canadian restaurant owner is 85,000CAD.

The average salary for an American restaurant owner is 65,000 USD, and the average for a Canadian restaurant owner is 85,000CAD.

how much do restaurant owners make | two people talking

Are restaurants profitable?

A restaurant's profitability will vary based on several factors, including operations costs, labor costs, food costs,  and optimization of systems. However, the average profitability for a restaurant is between 0-15% of profits, with the average falling between the 3-5% profitability marker. 

The average profitability for a restaurant is between 0-15% of profits, with the average falling between the 3-5% profitability marker. 

Operational factors.

In drafting the business plan for your restaurant before ever opening the doors, you will need to address anticipated operational costs. Some of these costs might include:

  • Start-up expenses
  • Overhead operating costs
  • Training
  • Staff recruitment
  • Supplies
  • Equipment

Included in your overhead costs will be your salary as the restaurant owner. Since you are the owner of your restaurant, you are free to set this salary at any level you choose, but it’s more common for owners to take a percentage of profits to maintain their incentive for keeping the business running smoothly.

Location factors.

In addition to operational impacts on restaurant owner salaries, location factors can also determine how much you can make. A lot of the success of a restaurant has to do with its location. Owners of similar restaurants in different areas can have surprisingly different salaries.

Your operating costs.

It is critical to consider costs when evaluating the profitability of a restaurant. Labor costs, food costs and operational costs are all tied to your profit margins, and in the end, your take home earnings as a restaurant owner.

Consider experience.

Another thing to consider is the level of experience as a restaurant owner. If you have been in the game for a while now, you likely better understand how to keep overhead costs lower. Typically, restaurant owners with ten years of experience make more money than those starting. Don’t be discouraged as a beginner, though, and remember that everyone starts somewhere.

how much do restaurant owners make | open restaurant

What are ways to increase restaurant profits to make more as a restaurant owner?

Owning a restaurant is a business venture which means your main goal is to increase your profits and maximize your return on investment.  The larger your profit margins, the larger your take home earning will be.  

Here are 10 few tips on how to increase restaurant profits without additional costs:

Learn to upsell and cross-sell.

Upselling and cross-selling are critical tools for restaurant employees to use to help raise profit margins without raising prices.

Understand the menu.

Having your staff gain a proper understanding of your menu helps in their ability to sell products to your customers.

Learn customer names.

Whenever possible, everyone in the restaurant should be addressing customers by name. Building a personal relationship with customers is what keeps them coming back.

Follow customer patterns.

All people are creatures of habit, naturally, which means in restaurants you’ll begin seeing regulars. Get to know their patterns so you can work on customizing their experience each time.

Choose a ‘best dish’.

Have a ‘best dish’ section on the menu. That way, if customers don’t know what to order, there’s a quick recommendation readily available.

Create a vibe.

Dining in a restaurant should always be a relaxing experience for guests. Keep this idea in mind when designing your space and think carefully about lighting, seating, and all aspects of the experience.

Have great training.

Keeping your staff well trained will arm them with the tools needed to connect your restaurant to your customers with every interaction.

Feature dish.

Aside from having the restaurant’s best dish, feature some other dishes that have excellent profit margins.

Purchasing behavior.

All of the technology available today makes tracking customer purchasing behavior easier than ever. Use these tools to your advantage.

Use technology to streamline operations.

Using a workforce management solution that offers all in one HR, scheduling, time tracking, and payroll, plus POS integration will save you hours and thousands when managing your people at a restaurant.

Have fun!

Owning a restaurant is a business, but you have to remember to have fun.

Working in a restaurant can be extremely challenging, from line-level employees up through to owners. That’s not to say there isn’t fun to be had. Use your time wisely to interact in fun ways with your staff and promote them doing the same with their guests. Not only will it boost morale, but you’ll see that it can also boost sales and profits.

how much do restaurant owners make | Burger

How do I make more money as a restaurant owner?

If you want to increase your earnings as a restaurant owner, the best ways to go about it would be to:

  • Use great systems.
  • Optimize wherever possible.
  • Hire a great team.
  • Lock in your marketing
  • Take measures to increase your profit margins 

The last point is the most pertinent, because as a restaurant owner, your profit margins will directly impact your success.

So how do you increase your profit margins and make more?  Download our free guide to increasing your restaurant profits to find out!

Here's How to Increase Your Restaurant Profit Margins

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July 2021


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