How to Price Your Menu Items
Pricing isn't about guessing what the market will bear; it is about tracking the movement of money from your supplier to the plate. Once you know your plate cost, you can stop operating on instinct and start operating on data.
Gather your invoices
You cannot price what you have not measured. Have your latest delivery invoices and a kitchen scale ready to verify the actual yield of your bulk ingredients.
- Digital kitchen scale
- Spreadsheet software
- Recent supplier invoices
What goes in.
- 100%Total menu price
- VariableRaw ingredient costs
- 3-5%Buffer for waste and shrinkage
The Plate Cost Formula
Divide your total raw ingredient cost per portion by your target food cost percentage (expressed as a decimal) to arrive at the menu price.
The method.
Break down recipes
List every single ingredient in a dish, including oil, salt, and garnishes. Calculate the cost per gram or milliliter based on your bulk purchase price.
Calculate yield
Weigh your produce after trimming and peeling. If you buy 10 lbs of potatoes but only get 8 lbs of usable product, the cost per gram must be calculated based on the 8 lbs, not the 10.
Establish your percentage
Determine your target food cost percentage—usually between 25% and 35%. If a dish costs $3.00 to make and you want a 30% food cost, divide 3.00 by 0.30 to get a $10.00 menu price.
Factor in waste
Add a small percentage—usually 3% to 5%—to your raw cost to account for spills, spoilage, or kitchen errors before you run your final pricing calculation.
When it doesn't go to plan.
Always update your costings when supplier prices shift, even by a few cents.
Do not ignore 'hidden' costs like seasonings, frying oil, or packaging for takeout.
If the math results in a price that seems too high for your market, you must either simplify the dish or find a less expensive ingredient source.
The ones that keep coming up.
What is a 'good' food cost percentage?
There is no universal number. It depends on your overhead, labor costs, and volume. Most established kitchens aim to keep food costs between 25% and 35% of the total revenue.
How do I account for ingredients that are used in small amounts?
For staples like salt, pepper, or dried spices, assign a small flat fee—such as $0.05 or $0.10—per plate to cover the entire pantry 'use-as-needed' category.
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