Running a restaurant is a high-stakes game where every dollar counts, and the 30-30-30 rule—often extended to the 30-30-30-10 framework—serves as a time-tested blueprint for keeping your finances in check. This guideline breaks down your total revenue into key expense categories, aiming for roughly equal shares across the board to ensure sustainability and profitability. It’s not a rigid law but a practical starting point, born from decades of industry wisdom, helping owners avoid common pitfalls like skyrocketing ingredient bills or understaffed shifts.

1. First 30%: Food and Beverage Costs (Cost of Goods Sold – COGS)
This category covers the direct cost of the ingredients and supplies required to create every menu item. Keeping this percentage in check is crucial, as ingredients are the foundational variable cost.

Goal: To spend no more than 30% of sales revenue on purchasing food and beverages.

Management Focus: Strict inventory control, efficient portioning, reducing waste, and negotiating favorable prices with suppliers.

2. Second 30%: Labor Costs
This accounts for all the expenses related to your staff, from the kitchen to the front-of-house. It includes wages, salaries, payroll taxes, insurance, and benefits.

Goal: To keep total labor spending at or below 30% of sales revenue.

Management Focus: Smart scheduling to match staffing levels with anticipated demand, cross-training employees for efficiency, and minimizing costly overtime.

3. Third 30%: Overhead and Operating Costs
This is the “bucket” for all other necessary fixed and variable expenses that keep the lights on and the business running.

Goal: To limit these essential operational costs to 30% of sales revenue.

Management Focus: Includes rent, utilities, maintenance, equipment, marketing, licenses, insurance, and other administrative expenses. Controlling fixed costs, especially rent, is often the biggest challenge here.

The Remaining 10%: Net Profit
After allocating 90% of revenue to the three core cost categories, the leftover 10% is the ideal target for the net profit margin.

Goal: To achieve a 10% profit margin.

Significance: While 10% may seem small, it is considered a healthy and sustainable margin in the notoriously low-margin restaurant industry.

Why Is the 30-30-30 Rule Important?
Rapid Diagnostics: It acts as a quick, high-level financial health check. If one category consistently creeps above 30%, it immediately signals a need for operational adjustment before the entire business becomes unprofitable.

Goal Setting: It provides clear, actionable targets for managers to monitor and strive for, simplifying the complex world of restaurant accounting.

Strategic Pricing: Understanding these target percentages is essential for accurate menu pricing, ensuring that each dish sold contributes appropriately to covering costs and generating a profit.

A Word of Caution: While an excellent benchmark, the 30-30-30 rule is not one-size-fits-all. A fine-dining establishment, for instance, might have a higher labor cost but a slightly lower food cost, while a high-volume, quick-service restaurant might have the reverse. It is best used as a starting point and a guide for balancing expenses, rather than an absolute law.

Would you like to know some practical strategies for lowering one of these three core restaurant costs, such as food or labor?

The three primary types of catering are onsite catering, offsite catering, and delivery/drop-off catering. Each serves a different set of needs and logistics for events.

1. Onsite Catering
On-site catering is when the food preparation and service take place within the caterer’s own established venue. This could be a dedicated banquet hall, a restaurant with event space, or a hotel ballroom.

Key Characteristics:
Convenience: Wedding caterers in Delhi have full control over the kitchen, equipment, and service staff, ensuring a streamlined operation.

Ideal for: Large-scale events like weddings, galas, corporate banquets, and conferences where guests are already gathered at the venue.

Benefit: Allows the caterer to offer more complex menus and presentation due to access to a fully equipped, permanent kitchen.

2. Offsite Catering
Offsite catering, also known as mobile catering, involves transporting the food, equipment, and staff to a remote location chosen by the client, such as a private home 🏡, a park, a rented hall, or an office.

Key Characteristics:
Logistical Complexity: The caterer must bring nearly everything required—portable ovens, serving equipment, dishes, and sometimes even temporary refrigeration.

Setup: Requires significant time and effort for setup and breakdown at the remote venue.

Ideal for: Receptions, outdoor festivals, backyard parties, and events held in non-traditional venues.

Requirement: Expertise in food safety and temperature control during transport and service is crucial.

3. Delivery/Drop-Off Catering
Delivery catering or drop-off service is the simplest form, where the caterer prepares the food and then delivers it directly to the event location. There is typically no staff provided for setup, serving, or cleanup.

Key Characteristics:
Simplicity: Focuses purely on food preparation and delivery, often using disposable packaging and serving ware.

Cost-Effective: It’s generally the most budget-friendly option as labor costs for service staff are eliminated.

Ideal for: Business meetings, casual lunches, small social gatherings, or events where the host is happy to handle the setup and service themselves (buffet style).

Menu: Usually consists of easy-to-manage items like sandwiches, platters, salads, and boxed meals.