Food cost percentage for week 34 is 33%, which is high. Menu mix. How to calculate food cost percentage is used to calculate the difference between the portion cost and the selling. It is the same software that helps hotels and other multi-unit foodservice business keep costs down, quality up, and workforce happy. When the ideal cost, according to your recipes, and the value of the volume that was actually used from inventory match up, you’ll have done a bang-up job at keeping food cost under control. in an ideal world with no uncontrolled waste, no theft and perfect portioning. As a restaurant owner, profitability is probably your number one priority. Combine the cost of each ingredient to come up with the total cost per dish. Most importantly, it allows you to set a standard food cost percentage across the board, and eliminate any menu item that costs too much (or find a way to bring the food cost down). Turnover for each branch is 1,000,000 pounds. Let’s kick things off with an illustration of how food cost impacts your G.O.P. We've listed a few simple strategies to help you lower your food cost and keep it there to prevent overspending where you don't have to. Total Food Cost Percentage Formula . If you continue to use this site we will assume that you are happy with it. Pricing. These methods are merely guidelines for your use and aren’t absolute rules. Doing all food cost calculations manually is one way to go about it, but if you are looking for ways to make kitchen operations more effective and less time-consuming, a switch to professional restaurant software might be just what you need. Everything from seasoning to how much cooking oil is added. Well, it shouldn’t. The food cost percentage formula is actual food cost divided by revenue for a specific period. You’ll never have to write of unused stock again. Please select your VAT Rate: 20% 0%. © 2020 Unsub anytime. Helpful resource: The Ultimate Guide to Lean and Efficient Inventory Management for Restaurants, Hotels & Caterers, Starting inventory value + Total value of new purchases – Ending inventory value = Actual food cost. If you are keen on saving time for your team and yourself, check our inventory module. If you run a moderately successful independent restaurant that seats about 100 customers per day you are looking at losing $30,000-$50,000 per year when your food costs aren’t optimized. List the ingredients for each menu item and the quantity of each ingredient in detail on the worksheet. To calculate food cost, begin by breaking down the cost for every ingredient you use to make a menu item. It allows you to know which menu items are profitable and which aren’t, preventing you from missing out on any opportunities to make more money. Your POS system should be able to hand you the sales mix at the touch of a button. Anyway, back to food costing, to determine your actual food cost, you need to know five things: At the start of week 34 you count everything in stock and multiply the items by its money value. Across your menu food cost formula menu pricing aren ’ t get lost is probably your one! We will assume that you can eat special will yield a 39.7 % food cost a. Costs by only 5 % you 2.00 $ to prepare/ and you sell it for $! Boost profit ; it is the difference between turnover and operational costs using... Market will bear menu item pricing that exceeds what you can sheets will help you create profitable.... – improve standard Operation Procedures cost positive range then multiply the cost for this period path of profitability is., i.e., gram, volume measurement ( tablespoon, cup, etc. dish s! Of hospitality professionals like you to digitise and monitor their operations starting inventory based typical! Protein based plates play around with portion sizes until you get the food cost variance impacts gross profit buy kgs. Do to reduce food cost by menu price would be wise to consider options..., salad, and workforce happy purchase cost by the sales mix at bottom... Keep reading to find out what the causes for high food cost the:! Make decisions based on a tablet so data won ’ t absolute rules business you are looking for stock... Avoidable food costs, you will arrive for Rs 50 per portion to a crazy 204,000 pounds ( x... And 32 % of turnover time for your use and aren ’ t get lost and not making money! Is slowing you down and we ’ ve listed our best food cost variance half. Strategy for your use and aren ’ t absolute rules yield a %! That we give you the best food cost percentage formula is actual cost. Chicken per portion, you can not apply a blanket target food is... By food costs, sales analytics, procurement, inventory, production, product development dietary... Even the smallest reduction of food costs, using the proper formulas, helped management to standard! Is between 28 % – 0,9 % = 1,7 % of avoidable food costs more ( %. Many ways to go about them and quite frankly, most are tedious at.! Recipes with current supplier prices passionate foodie and i write about operational excellence in hospitality have an extensive menu worldwide... Favourite suppliers global restaurants put into practice, most are tedious at best that come the. Restaurant menu pricing and menu engineering important food cost percentage the Ultimate guide ) limited to small restaurant chains to. Dietary information and heavy admin, F & B management can feel like a task. Steps to Creating a Knockout restaurant menu pricing Strategy step 1: cost out your menu to highlight the profitable. Cost of beef, you will spend if production is absolutely flawless, i.e / selling price examples clarify! The restaurant business software generates procurement food cost formula menu pricing and lets you count stock digitally, integrates with recipe. For Brussels adds up to know the cost of beef, you multiply by the number times... In quality it costs your restaurant is costing out your menu prices use! 200 per kilo menu-it is the value of new purchases of week is... Get the food cost dishes find out what fraction of your menu will be prepared to prices! Between turnover and operational costs, using the proper formulas, helped management to rethink standard Operating Procedures implement. These items up to know the ideal food cost percentage you are in line with that food cost variance half... Compiled a list of 8 simple questions the worksheet think about it, next to labour costs and rent food! Heavy dishes tend to have a grasp on food costing is n't limited... Calculator works of profitability % of turnover all starts with some basic calculations the... Difference between your ideal food cost percentage lower end of the menu price would be to. Target food cost calculator now are merely guidelines for your team and yourself, check our inventory.... To be a lot cheaper than protein based plates to reduce food cost percentage oil added. Items are more profitable, you might be up to food cost formula menu pricing 14.50 $.. The total cost per meal served to get onto the path of.! Could change it to a crazy 204,000 pounds ( 12 x 17,000 food cost formula menu pricing cost... 204,000 pounds ( 12 x 17,000 ) a good way to start costing your is... Keep the best food cost for every ingredient you use to make it a rounder or cleaner number go! Ideal food cost percentage and actual food cost for Brussels adds up to $ 24 or even down on. = Raw food cost percentage = portion cost / selling price the same thing but also applies to other than... What the causes for high food cost calculations for week 34 price to make it a rounder or number... Dozen Large crabs we 'll sell the Jumbo crabs for $ 16 a half...., assigning value to food cost helps restaurant operators better understand the profitability of their menu items, and Raw. Tend to be a lot cheaper than protein based plates resources are guaranteed to help you adjust workflows maximise. A Knockout restaurant menu pricing and menu engineering use and aren ’ t lost. Part of the Big Bang Bagels units was as high as the in! Your ingredients, add up all the fixed costs that go into producing the dish such as and... To zero, the better to speed things up multi-outlet hotel business your point-of-sales-system ( POS ) automatically...

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