Turnover for each branch is 1,000,000 pounds. So if it costs you $5 to make your chicken parm dish, and it sells for $18 per serving on the menu, your food cost is: ($5/$18) x100 = 27.7%. To make things easier for you, we have put together a free food cost calculator excel sheet that can streamline the entire process. Let’s kick things off with an illustration of how food cost impacts your G.O.P. At the bottom of the column with your recipe cost you add everything up. Add the value of new purchases of week 34 to the value of the starting inventory. The definition of ideal food cost is the cost expected for a specific period, based on recipes and the number of times each menu-item is sold. For example: if a menu item is priced at $13 and the food cost was $4, your food cost percentage is 31%. Calculate profit from cost to menu price or menu to cost price. See what happens to profit when you reduce the costs by only 5%. Let’s do the maths. In other words, you multiply by the sales mix. A dozen Large crabs we'll price at $25. Contact us for more help with Gross Profit GP Calculations and Menu Planning and Costing. It is an industry standard that even the biggest global restaurants put into practice. The easiest food cost calculator for restaurants Design your menu to highlight the most profitable menu items. If the actual food cost in your restaurant or hotel is higher than the ideal food cost (aka theoretical or target food cost), the reason can always be traced back to one or more of these seven causes: 1. For example, you buy 50 kgs of chicken at Rs 200 per kilo. Calculate food cost and boost profit; it is the first lesson anyone working in the restaurant business learns. Without proper food cost control, the head office would have never known gross profit was taking a cut because of poor food cost control in Brussels. 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). Ideal and actual food cost percentages give an idea of how outlets are performing, but only a comparison of the two calculations shows if food cost is under control. Executive chefs, F&B managers and operations managers reading this will agree with him: getting the costing of recipes right and integrating the data into all kitchen operations takes up time and involves endless amounts of spreadsheets. In the example below, you could change it to a number such as $14.50. Food costing allows you to not only gauge how well your restaurant is doing in comparison to your competition, but it also helps you distinguish between dishes that are bringing in the most profit and dishes that are actually losing money for your business. The Ultimate Guide to Lean and Efficient Inventory Management for Restaurants, Hotels & Caterers, 9 ways to reduce food cost without giving in quality, 7 causes for variance between actual and ideal food cost. Make sure to check each dish to determine whether or not the price covers the food cost and fixed price per dish. Menu mix. Then, determine how much you sold or will sell that item for. For example, a burger costs you 2.00$ to prepare/ and you sell it for 8.00$ = 0.25 is your food cost. Food cost percentage explained Obviously the same applies for smaller restaurants too. or number of pieces for each ingredient. There are a number of reasons why you need to calculate food cost at your restaurant, but it should only take a few to convince you to start. It is also a prime element for calculating food cost variance. 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. 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. 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. The software generates procurement suggestions and lets you send out orders directly to your favourite suppliers. 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. A lot cheaper than protein based plates more profitable, you multiply by the sales mix at the end the! 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