Most sole proprietors think they're making money when they're actually working for peanuts. You clock 60+ hours weekly but skip counting your own labor in cost calculations. This creates an illusion of profitability while you survive on scraps.
Why you must count your own hours
You're the chef, purchaser, accountant, and janitor rolled into one. Those hours aren't free just because you don't cut yourself a paycheck. Skip this calculation and you'll never know if you're earning €25 per hour or €5.
⚠️ Watch out:
Countless sole proprietors calculate only ingredients and rent, ignoring their sweat equity. That profitable-looking pasta? You're probably losing money on every plate.
Set your worth with an hourly rate
Pick a realistic hourly wage that reflects your value. Consider these benchmarks:
- Employee equivalent: €15-25 per hour
- Entrepreneur premium: €20-35 per hour
- Market standards: Browse chef job postings for reference
Don't kid yourself here. Earning €12 hourly while grinding 70-hour weeks puts you below minimum wage territory.
💡 Example:
Target rate: €22 per hour. Time breakdown for one dish:
- Shopping: 0.5 hour (split across 20 portions) = €0.55 per plate
- Prep work: 1 hour (for 20 portions) = €1.10 per plate
- Active cooking: 0.1 hour = €2.20 per plate
Labor cost total: €3.85 per portion
Track time per dish accurately
Be brutally honest about time investment for each menu item:
- Prep phase: Washing, dicing, marinating ingredients
- Active cooking: Sautéing, simmering, plating presentation
- Sourcing: Your share of weekly purchasing time per dish
- Cleanup: Post-cooking washing and sanitizing
Total everything up, then multiply by your chosen hourly rate.
💡 Example pasta carbonara:
Target hourly rate: €20
- Prep (dicing onion, crisping bacon): 5 minutes = €1.67
- Cooking (boiling pasta, sauce creation): 8 minutes = €2.67
- Plating and service: 2 minutes = €0.67
Total labor investment: €5.01 per serving
Build your complete cost structure
Your true cost price formula becomes:
Real cost price = Raw ingredients + Your labor + Fixed overhead
Overhead covers rent, utilities, insurance—all those fixed monthly bills divided across your dishes. One of the most common blind spots in kitchen management is underestimating how these overhead costs stack up per plate.
💡 Complete breakdown:
Pasta carbonara at €16.50 (including 9% VAT)
- Raw ingredients: €4.20
- Your labor: €5.01
- Overhead allocation: €2.50
- True cost price: €11.71
Net selling price: €15.14
Actual profit: €15.14 - €11.71 = €3.43 (23% margin)
Handle shrinking margins
Including labor costs often reveals razor-thin margins. You've got three moves:
- Increase prices: Charge what your work's actually worth
- Streamline operations: Cut prep time through smarter workflows
- Strategic losses: Some dishes attract customers, not profit
⚠️ Watch out:
If every menu item turns unprofitable after adding labor costs, you're either underpricing everything or operating inefficiently.
Smart strategies for solo operators
Reduce labor costs per portion through:
- Batch production: Cook larger quantities to spread prep time
- Streamlined menu: Less complex dishes mean faster execution
- Organized prep: Solid mise en place cuts service time dramatically
- Recipe consistency: Standardized portions and timing
Tools like KitchenNmbrs automatically factor your labor costs into pricing calculations, removing the guesswork.
How do you include your own hours in the cost price? (step by step)
Determine your desired hourly rate
Choose a realistic hourly rate between €15-35 per hour, based on your experience and what you want to earn as an entrepreneur. Be honest with yourself about what your work is worth.
Measure time per dish
Estimate how many minutes you spend on prep, cooking, plating and cleanup per portion. Also include a share of your purchasing time, allocated across all dishes you make.
Calculate your labor cost per portion
Multiply your time per dish (in hours) by your desired hourly rate. Add this to your ingredient costs and overhead costs for your total cost price.
Check your margin
Subtract your total cost price from your selling price (excl. VAT). If your margin is too low, consider raising your price or working more efficiently.
✨ Pro tip
Time yourself preparing your 3 highest-volume dishes over the next week. Most operators discover they're spending 40% more time per plate than they estimated.
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 always include my own hours in the cost price?
Absolutely—otherwise you're flying blind on actual profitability. Most solo operators unknowingly work for below minimum wage because they ignore their labor value.
What hourly rate should I calculate for myself?
Start at €15-20 minimum, but aim for €25-35 as an experienced entrepreneur. Research what employed chefs earn in your area, then add a premium for business risk and ownership responsibilities.
How do I convert purchasing time per dish?
Track your weekly shopping hours, then divide by total portions produced that week. If you spend 4 hours shopping and make 200 portions, that's 1.2 minutes (€0.40 at €20/hour) per portion.
What if my dishes become unprofitable after including labor?
They were always unprofitable—you just couldn't see it before. Either raise prices to reflect true costs, streamline your processes, or accept some items as customer magnets rather than profit centers.
Can I use different hourly rates for different tasks?
You could charge €15 for cleaning and €25 for cooking, but complexity isn't always better. A single blended rate keeps calculations simple while still capturing your labor value accurately.
How do I handle seasonal fluctuations in prep time?
Calculate labor costs during your busiest periods when prep is most intensive. This ensures you're not underestimating time investment during peak seasons when efficiency matters most.
📚 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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