Growth sounds tempting, but it can be a disaster if your cost prices are wrong. Many entrepreneurs open a second location while losing money at the first without knowing it. In this article, you'll learn which signals tell you whether you're ready to grow, or if you need to get your calculations in order first.
The growth trap: why calculations come first
Your business is doing well, guests are happy, and you dream of expansion. But growth without control over your numbers is like driving with a broken speedometer. You don't know how fast you're going until you hit a tree.
⚠️ Watch out:
If your food cost is higher than 35%, you're probably losing money on every dish. Growth only makes this problem bigger.
Check 1: Do you know your actual food cost?
The first test is simple: can you say exactly what the ingredients cost for your 5 best-selling dishes? Not estimates, but precise calculations including all ingredients.
💡 Example:
Pasta carbonara for €18.50 (incl. 9% VAT):
- Pasta: €0.45
- Bacon: €1.80
- Eggs: €0.60
- Parmesan: €1.20
- Cream: €0.35
- Herbs, oil: €0.25
Total ingredient costs: €4.65
Selling price excl. VAT: €16.97
Food cost: 27.4% - that's great!
If you can't do this, you're not ready to grow. You have no idea which dishes make money and which lose it.
Check 2: Do you have control over your total costs?
Food cost isn't everything. You also need to know what your total costs are per month:
- Fixed costs: rent, insurance, subscriptions
- Personnel costs: salaries, social contributions, temp workers
- Variable costs: purchasing, energy, marketing
The rule of thumb: your total costs should be no more than 85-90% of your revenue. Higher than that? Then you have no margin for growth investments.
💡 Example calculation:
Monthly revenue: €45,000
- Purchasing (food cost 30%): €13,500
- Personnel (35%): €15,750
- Rent and fixed costs: €8,000
- Other costs: €3,000
Total costs: €40,250 (89.4%)
Profit: €4,750 (10.6%) - just enough for growth
Check 3: Are your processes transferable?
Growth means more staff and possibly other locations. Can you explain how each dish is made? Are your recipes documented somewhere? Or is all the knowledge in your chef's head?
Without documented processes, growth becomes a gamble. Every new employee makes dishes differently, causing your food cost to go all over the place.
Check 4: Can you steer by numbers daily?
As an entrepreneur, you need to see daily:
- How much you sold yesterday
- What you purchased
- How much was wasted
- Whether you're staying on budget
This becomes twice as complicated with two locations. If you can't do this now, growth will be chaos.
⚠️ Watch out:
Many entrepreneurs think growth will solve their problems. The opposite is true: growth makes small problems big.
When are you ready to grow?
You're ready to grow if you can check off these four points:
- Stable food cost: between 25-35% and you know exactly where it comes from
- Healthy profit: at least 10-15% net profit per month
- Documented processes: recipes, procedures and methods are fixed
- Daily control: you have grip on your numbers without spending hours on them daily
💡 Real-world example:
Restaurant The Emperor wants to grow. Their check:
- Food cost: 28% (good)
- Net profit: 12% (sufficient)
- Recipes: all documented in system
- Control: check numbers daily for 10 minutes
Conclusion: ready to grow!
Get calculations in order first, then grow
If you can't check off all four points, focus on your calculations first. It takes a few weeks to get your processes in order, but it can save you thousands of euros.
Many entrepreneurs use a system like KitchenNmbrs to automatically track their food cost and document recipes. This way you quickly get control over your numbers without spending much time on it.
How do you test if you're ready to grow? (step by step)
Calculate your food cost for your top 5 dishes
Make a list of your 5 best-selling dishes. Calculate exactly what all the ingredients cost for each dish and divide this by the selling price excl. VAT. If this comes out above 35%, you're not ready to grow yet.
Check your total cost structure
Add up all your costs: purchasing, personnel, rent, energy, insurance. Divide this by your monthly revenue. If this comes out above 90%, you don't have a buffer for growth investments.
Test your processes
Ask yourself: could a new employee make all your dishes tomorrow without you being there? If the answer is no, document your recipes and procedures first before you grow.
✨ Pro tip
Test your readiness by tracking your food cost daily for one month. If this goes smoothly, you're ready to grow.
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
What if my food cost is higher than 35%?
Then you're probably losing money on those dishes. Raise your prices, reduce your portions or find cheaper ingredients. Hold off on growth until you've solved this.
Can't I just start growing and adjust along the way?
That's risky. Growth costs money before it makes money. If your calculations are wrong, you'll make twice as much loss instead of profit.
How long does it take to get my calculations in order?
With the right approach, 2-4 weeks. You need to document your recipes, calculate cost prices and set up a routine to track your numbers.
What's a healthy profit margin for growth?
At least 10% net profit, preferably 15%. This gives you a buffer for investments and unexpected costs during growth.
Do I need to hire an accountant for growth?
An accountant helps with administration, but you need to have daily control over food cost and operational numbers. An accountant can't do that for you.
📚 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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