A homemade concept can be very profitable, but only if you run the numbers correctly. Many people underestimate hidden costs and overestimate their revenue. Here's how to calculate step by step if your concept generates enough to live on.
What are your real costs?
Most homemade entrepreneurs forget half their costs. They think only about ingredients and completely ignore time, energy, packaging, and taxes.
⚠️ Watch out:
If you only look at ingredient costs, everything seems profitable. But your time and other costs count too.
Hidden costs you often forget:
- Your own hourly wage (what do you want to earn per hour?)
- Energy (gas, electricity for cooking)
- Packaging (containers, bags, stickers, labels)
- Transport (fuel, car wear and tear)
- Taxes (VAT, income tax)
- Insurance (liability, business)
- Marketing (website, flyers, social media)
Calculate your minimum revenue
To live off your homemade concept, you need to cover at least your fixed costs plus a livable income.
💡 Example:
You want to earn €2,500 per month and have these fixed costs:
- Insurance: €150/month
- Marketing: €100/month
- Car/transport: €200/month
- Taxes (estimated): €800/month
Minimum revenue: €2,500 + €1,250 = €3,750/month
This means you need to generate at least €3,750 per month to have €2,500 net remaining.
Test with one product
Take your best-selling product and calculate all costs. If this product isn't profitable, your concept won't be either. This is one of the most common blind spots in kitchen management - entrepreneurs assume their star product makes money without actually checking the numbers.
💡 Example: Homemade cake
Selling price: €25.00 (incl. 9% VAT) = €22.94 excl. VAT
- Ingredients: €6.50
- Packaging: €1.20
- Time (3 hours at €15): €45.00
- Energy: €2.00
Total costs: €54.70
Loss: €54.70 - €22.94 = -€31.76
In this example, you lose €31.76 per cake. You'd need to raise the price to at least €60.00 to break even.
How much do you need to sell?
Divide your required monthly revenue by your average order value. This tells you exactly how many orders you need.
Formula:
Required orders = Minimum revenue / Average order value
💡 Example:
You need €3,750/month and your average order is €35:
€3,750 / €35 = 107 orders per month
That's roughly 25 orders per week, or 3-4 per day.
Is this realistic for you?
Now comes the most important question: can you realistically achieve these numbers with your concept and available time?
- Do you have enough time? 107 orders means cooking, packaging, and delivering 107 times
- Do you have enough customers? Where will you find 25 new customers per week?
- Can you sustain this? Even during illness or vacation?
- Will you grow with it? Can you handle more orders without losing quality?
⚠️ Watch out:
Many homemade entrepreneurs calculate too optimistically. Start with 50% of what you think you can achieve.
Digital help with cost calculation
Calculating costs manually is time-consuming and error-prone. Tools like KitchenNmbrs help you track all ingredients, time, and costs and automatically calculate your profit margin per product.
This way you immediately see which products are profitable and which ones you should adjust or remove from your range.
How do you calculate whether your homemade concept generates enough? (step by step)
Calculate all costs per product
Add up ingredients, packaging, your time (at a realistic hourly rate), energy, and transport. Don't forget any cost item.
Determine your minimum monthly revenue
Add your desired income to all fixed costs (insurance, taxes, marketing). This is your break-even point.
Calculate how much you need to sell
Divide your minimum revenue by your average order value. Check whether this number is realistic for your situation and available time.
✨ Pro tip
Calculate your true hourly wage over the next 30 days by tracking every minute spent on your business. Most homemade entrepreneurs discover they're earning less than €5 per hour once they include shopping, prep, cooking, packaging, delivery, and admin time.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Should I include VAT in my calculation?
Yes, always calculate with prices excluding VAT. The VAT you receive must be paid to the tax authority, so it's not yours to keep.
How much should I pay myself per hour?
At least €15-20 per hour, depending on your experience. Your time has value, even working for yourself. Don't undervalue your labor just because it's your own business.
What if my products become too expensive?
Then you need to adjust your concept: use cheaper ingredients, work more efficiently, or make a different product that is profitable. Sometimes the market simply won't support your costs.
Can I start without calculating everything?
That's risky. Many homemade entrepreneurs discover after months that they're running at a loss. Better to know where you stand beforehand.
How often should I check my prices?
At least every 3 months. Ingredient prices rise regularly, so your cost price changes too.
What's the biggest mistake in homemade food pricing?
Not counting your time properly. Many people think their labor is 'free' because they enjoy cooking. But if you can't pay yourself, you don't have a business - you have an expensive hobby.
Should I factor in equipment depreciation costs?
Absolutely. Your mixer, oven, and other equipment wear out and need replacement. Calculate annual replacement costs and divide by 12 for monthly equipment costs.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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