Recipe development costs add up fast, but tracking them properly ensures your new dishes stay profitable. Most restaurant owners underestimate what they spend on testing and end up with unprofitable menu items. Here are three proven methods to account for testing expenses and recover your investment.
Why testing costs matter
Every new dish you develop costs money before it goes on the menu. Ingredients for tests, your chef's time, failed attempts — these are all real costs you need to recoup.
💡 Example:
You develop a new pasta. After 6 tests you have the perfect recipe:
- Test 1-6: 6 × €8.50 ingredients = €51.00
- Chef time: 12 hours × €25/hour = €300.00
- Total development costs: €351.00
You need to recoup these costs through sales.
Three ways to account for testing costs
There are different approaches to include development costs in your numbers:
- Markup on cost price: Add a percentage to your ingredient costs
- Break-even calculation: Calculate how many sales it takes to break even
- Separate cost line: Book development costs separately as an investment
Method 1: Markup on cost price
The simplest approach is adding a percentage markup to your ingredient costs for new dishes.
💡 Example calculation:
New pasta with ingredient costs €8.50:
- Base costs: €8.50
- Development markup 15%: €8.50 × 1.15 = €9.78
- Actual cost price: €9.78
At selling price €32.00 (excl. VAT €29.36): food cost = 33.3%
⚠️ Note:
Use this markup only in the first year. After that, you can return to normal ingredient costs.
Method 2: Break-even calculation
Calculate how many portions you need to sell to recoup your development costs.
Formula: Break-even = Development costs / (Selling price - Variable costs)
💡 Example break-even:
Pasta with development costs €351:
- Selling price: €29.36 (excl. VAT)
- Ingredient costs: €8.50
- Margin per portion: €20.86
Break-even: €351 / €20.86 = 17 portions
After 17 sold portions, you've recouped your development costs. Something most kitchen managers discover too late: tracking this break-even point prevents you from keeping unprofitable dishes on the menu indefinitely.
Method 3: Separate cost line
Book development costs as a separate investment in your accounting, separate from the cost price per dish.
- Advantage: Clear separation between ongoing and one-time costs
- Disadvantage: More complex to track
- Perfect for: Large menu overhauls or seasonal dishes
What do you record during testing?
Keep track of the following with each test:
- Ingredients used: Exact quantities and costs
- Time spent: Chef hours and any assistants
- What didn't work: Failed attempts cost money too
- Final result: The final recipe and portion size
⚠️ Note:
Don't forget to count your chef's time. Their hour costs you €20-30, even during testing.
Setting development budgets
Sometimes it gets out of hand. Set a budget upfront:
- Maximum ingredient costs: For example €100 per new dish
- Maximum chef time: For example 8 hours of development
- Maximum number of tests: For example 5 attempts
If you exceed this, the dish might be too complex or not profitable enough for your menu.
💡 Example budget:
Budget for new main course: €200 total
- Ingredients: maximum €80
- Chef time: maximum 6 hours (€120)
This prevents development from becoming too expensive.
How do you calculate testing costs? (step by step)
Record all testing costs
Keep track of exactly what you use with each test: ingredients (quantity and price), chef time in hours, and any failed attempts. Add everything up for total development costs.
Choose your accounting method
Decide whether you add a markup to the cost price (15-20%), do a break-even calculation, or book the costs separately. For most restaurants, a temporary markup works best.
Calculate the adjusted cost price
With markup: multiply your ingredient costs by 1.15 (for 15% markup). With break-even: divide development costs by your margin per portion. Check that your food cost stays below 35%.
✨ Pro tip
Track your break-even point for each new dish within the first 90 days of launch. If you haven't hit break-even by then, either adjust pricing or consider removing the item from your menu.
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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 count chef time when testing recipes?
Absolutely. Your chef earns €20-30 per hour, even during testing. These costs are just as real as ingredients and need to be recouped through sales.
How long should I charge a markup on new dishes?
Usually 6-12 months, depending on how often you sell the dish. After about 50-100 sales, you can usually return to normal cost price without markup.
What if my testing costs exceed my budget?
Stop development and evaluate if the dish is worth it. Set a maximum budget upfront (like €200 per new dish). If you exceed this, the dish might be too complex or not profitable enough.
Should I include failed tests in the costs?
Yes, failed attempts are part of the development process. Add up all ingredients and time you used, even if the result wasn't good. Those costs still happened.
📚 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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