What is the average markup?

Industry standards dictate the profit margin that restaurants can have based on their costs; this proportion ranges from 28 to 32%. Now that you've established the difference between profit margin and margin, it's time to set a goal to achieve an average profit margin. This number will be different for each company. On average, it ranges from 5% to 20%, but there are a lot of different factors to consider. The size, age and location of the company are good things to consider.

For example, a new company may aim for a higher profit margin because, in general, it will have fewer sales and staff on the payroll and, therefore, will have lower overhead. However, as time goes on and the company grows, these margins will shrink.