Test Your Dream Before You Sign a Lease

In the real world, learning that your rent is too high or your labor costs are out of control is an expensive lesson. We created the Restaurant Simulator to let you learn those lessons for free.

This tool is designed for entertainment and educational purposes, allowing you to simulate the first 24 months of a new food & beverage business. The simulator uses critical business levers that every business owner must understand. From managing Cost of Goods Sold (COGS) to understanding how Customer Turn Rate (aka, table turns) impacts your bottom line, this simulator mirrors the financial complexity of the real world (but in a very simplified form).

Disclaimer: This tool provides estimates based on general industry standards. It is not a substitute for professional financial advice or a certified accountant.

1. Glossary of Terms

The simulator is broken down into three phases: Concept, Operations, and Finance.

Phase 1: The Concept

Concept Type:
- Fine Dining: High-end experience. Low volume, high ticket sizes, higher labor expectations.
- Casual Dining: Full table service with servers. Moderate volume and pricing.
- Fast Casual: Counter service (e.g., Chipotle, Panera). Higher volume, lower ticket sizes.
- Coffee/Bakery: High volume transactions with lower average tickets. Note: Selecting this changes the “Delivery” option to “Grab & Go / Drive-Thru”.
Uniqueness (1-10): This measures your “Brand Power.”
- Low (1-4): You compete only on price.
- High (8-10): You are a destination. In the simulator, a score above 5 boosts your customer traffic significantly after Month 6 (simulating word-of-mouth growth).
Review Score (Est): Your projected reputation, as scored online (think Yelp or Google Business Profile). A score of 4.2 stars is the baseline. Scores higher than this slightly boost your “Success Score” at the end.
Avg Ticket Size: The average amount a single customer spends (Food + Drink + Tax).

Phase 2: Operations

Seats: The physical number of chairs available for customers.
Table Turns (Peak): How many times a single table is seated during a busy shift.
- Example: If a party stays for 90 minutes, you can turn that table 2 times in a 3-hour dinner rush.
- Coffee Shops: This number is usually higher because visits are shorter.
Delivery / Takeout %: The percentage of your sales that come from apps (UberEats, DoorDash) or pickup.
- The Math: The simulator assumes a 20% commission fee on these sales (unless you are a coffee shop, where it assumes a lower 5% cost for drive-thru efficiency).
Drive-Thru / Grab & Go % (Coffee Only): Since coffee shops often serve more people than they have seats for, this slider acts as a “Volume Multiplier,” allowing you to exceed your seating capacity.

Phase 3: Financials

COGS (Cost of Goods Sold): The raw cost of ingredients and packaging.
- Target: 28–32%. If you sell a $10 burger and the ingredients cost $3.50, your COGS is 35%.
Labor Cost: The total cost of wages, payroll taxes, and benefits.
- Target: 25–30%.
Monthly Rent: Your total occupancy cost (Base rent + NNN/CAM charges).
- Rule of Thumb: This should be 10% or less of your total monthly sales.
Overhead: Fixed costs like utilities, insurance, POS software, permits, and trash removal.
Debt Service: Monthly loan payments (SBA loans, equipment financing, or investor dividends).
Starting Cash: The money you have in the bank on Day 1. This is your “Runway”—it determines if you can survive the initial months of losses.

2. The Stress Test Scenarios

Business plans rarely survive contact with reality. The “Stress Test” buttons at the top of the chart apply specific penalties to your model to see if it breaks.

Scenario	What it Simulates	The Math Behind It
☀️ Normal	A standard opening year.	No modifiers applied.
🚧 Road Work	Local construction limits access to your building.	Traffic drops by 20%. (Revenue x 0.80)
📉 Inflation	Supply chain costs spike, but you haven’t raised prices yet.	COGS & Labor increase by 5% points. (e.g., 30% becomes 35%) Fixed Costs increase by 10%.

3. How the Math Works ( The “Engine” )

While the simulator runs in your browser, it uses professional restaurant logic to build the forecast. Here is the simplified equation for how we calculate your success score:

Step A: Calculating Monthly Revenue

We calculate “Maximum Potential Revenue” and then adjust it based on your inputs.

Revenue = (Seats × Occupancy × Turns) × DaysOpen × AvgTicket

The “Ramp-Up” Curve: No restaurant opens at 100% capacity.
- Month 1: We assume you only do 60% of your potential volume.
- Month 6: You finally hit 100% of your potential volume.
The “Uniqueness” Bonus: If your Uniqueness score is high (e.g., 9/10), the model adds a Word-of-Mouth Bonus that continues to grow your revenue slightly past 100% capacity after Month 6.

Step B: Calculating Profit

Operating Profit = Revenue – (Variable Costs + Fixed Costs)

Variable Costs (Scale with sales):
- COGS (Food)
- Labor
- Delivery Fees (Calculated as Revenue × Delivery% × 20% Fee)
Fixed Costs (Do not change with sales):
- Rent
- Marketing
- Overhead (Utilities/Insurance)
- Debt Service

Step C: The “Success Score” (0-100)

The score at the top right is a weighted grade based on three factors:

Profit Margin (50% of score): Are you keeping at least 10–15 cents of every dollar?
Brand Strength (30% of score): Do you have high Uniqueness and Review scores? (Strong brands survive hard times better).
Cash Health (20% of score): Do you have enough starting cash to survive the “Ramp-Up” period?

4. Assumptions & Limitations

To keep the tool fast and easy to use, we make the following standard assumptions:

Seasonality: The model assumes a “steady state” after the initial 6-month ramp-up. It does not account for holiday spikes (December) or slow seasons (January), which vary wildly by location.
Taxes: The profit shown is Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). We do not calculate corporate income tax as this varies by state and business structure.
Staffing Efficiency: We assume you can adjust labor hours instantly to match lower sales. In reality, cutting shifts is difficult, so real-world labor costs are often slightly higher than projected here.

How To Play

1. Choose Your Concept Every food & beverage establishment is different. A coffee shop relies on volume and speed, while fine dining relies on high ticket averages and experience.

Fast Casual: Think Chipotle or Shake Shack. Counter service, higher volume.
Casual Dining: Traditional sit-down service with waiters.
Fine Dining: High-end experience, lower volume, much higher prices.
Coffee/Bakery: High volume, low ticket size. Note: Selecting this unlocks specific settings for “Drive-Thru/Grab & Go” capacity.

2. The “Uniqueness” Factor In the simulator (and in real life), being “average” is dangerous.

Score 1-5: You are competing on price. It’s hard to make a profit here because you don’t have pricing power.
Score 6-8: You have a solid brand or a great location.
Score 9-10: You are a “Destination.” Customers will drive across town for you. In the simulator, high uniqueness boosts your traffic significantly after Month 6.

3. Understanding the Financials

COGS (Cost of Goods Sold): This is your food and paper cost. If you sell a burger for $10, and the meat/bun/wrapper cost $3, your COGS is 30%. Target: 28-32%.
Labor: Total cost of staff, including taxes. Target: 25-30%.
Rent: Your total occupancy cost. Target: Keep this under 10% of your total sales.

4. What do the Results Mean?

The “Money Pit”: You are losing money every month. You need to either raise prices (ticket size), lower costs (COGS/Labor/Rent), or increase volume (Marketing/Uniqueness).
“The Struggle”: You are making a small profit, but one bad month (like a broken fridge) could wipe you out.
“Franchise Potential”: You have high margins and plenty of cash flow. This is the goal!

Start Experimenting

Now that you understand some of the basics, we encourage you to “stress test” your ideas. Don’t just input your perfect plan, try extreme scenarios to see how the math holds up. What happens to your break-even month if you double your marketing budget? Can a coffee shop survive with high rent if the volume is high enough?

The best way to learn is to watch how these numbers push and pull against each other. Since every business is unique and the real world is full of variables—from local trends to unexpected plumbing repairs, this tool is just a fun way to start thinking about the complex ecosystem of a business. It can’t predict the future, but it can help you prepare for it. Our hope is that it gives you small taste of the elements a business owner has to keep in mind on the road to success, and makes you interested in learning more, and eventually make your dream a reality.

We wish you the very best of luck on your entrepreneurial journey!

Back to the Simulator