The menu pricing formula
Menu price = plate cost ÷ target food cost %. A plate that costs $4.20 in ingredients with a 30% target sells for $4.20 ÷ 0.30 = $14.00. Your gross profit on that plate is $9.80 before labor and rent.
How to get the plate cost
List every ingredient in the recipe with the amount used and its purchase price, and add them up. Include small things (oil, garnish, sauce, bread) and divide batch recipes by the number of portions. Update it when suppliers change prices.
What food cost percentage to use
- 25%–28%: pizza, pasta, breakfast and other cheap-ingredient dishes.
- 28%–32%: typical full-service restaurant target.
- 32%–40%: steaks and seafood, where a higher cost is accepted for a higher dollar profit.
Look at the whole menu: a low-cost appetizer can balance a premium main course.