Your minimum selling price determines whether you make or lose money on each dish. Some restaurants nail their pricing and build solid profit margins, while others wing it and slowly bleed cash without realizing why. The difference comes down to knowing your true minimum price based on real food costs and realistic margin targets.
What is a minimum selling price?
Your minimum selling price is the lowest amount you can charge for a dish and still hit your target profit margin. Go below this number and you're basically subsidizing your customers' meals. Price above it and you make more money — assuming people will pay.
The math looks straightforward, but plenty of restaurant owners mess up the formula:
Minimum selling price (excl. VAT) = Food cost / (Desired margin % / 100)
? Example:
Your steak costs €9.00 in ingredients and you want a food cost of 30%.
- Food cost: €9.00
- Desired food cost: 30%
- Minimum price: €9.00 / 0.30 = €30.00 excl. VAT
- On menu: €30.00 × 1.09 = €32.70 incl. VAT
Sell for less than €32.70 and you won't hit your margin.
Calculate food cost correctly
Before you figure out your minimum price, you need the actual cost of your dish. That means everything that ends up on the plate:
- Main ingredients: meat, fish, vegetables
- Sides: potatoes, rice, salad
- Sauces and dressings: including that pat of butter
- Spices and seasonings: small amounts that add up fast
- Garnish: parsley, radish, olive
⚠️ Watch out:
Don't forget trimming loss! Buy whole fish for €18/kg but lose 45% to trimming? You're actually paying €32.73/kg for usable fillet. Use that real price in your calculations.
Different margins for different dish types
Not every dish needs identical margins. Smart operators set different targets by category:
- Meat and fish: 28-32% food cost
- Pasta and vegetarian: 25-30% food cost
- Starters: 30-35% food cost
- Desserts: 20-25% food cost
? Example different margins:
Restaurant with mixed menu:
- Salmon (€8.50 food cost, 30% margin): min. €31.02
- Pasta carbonara (€4.20 food cost, 25% margin): min. €18.35
- Tiramisu (€2.10 food cost, 20% margin): min. €11.45
Cheap desserts help offset expensive main courses this way.
Market prices and competition
Your minimum price sets the floor, not the ceiling. But you still need to check what customers will actually pay:
- What do similar restaurants nearby charge?
- What's your target customer comfortable paying?
- How special is your dish?
If your minimum price is way above market rates, you've got two options: cut your food cost or drop the dish. One of the most common blind spots in kitchen management is keeping dishes on the menu that can't be priced competitively.
? Example market check:
Your steak needs €32.70 minimum, but competitors charge €28.00.
- Option 1: Source cheaper meat (different cut?)
- Option 2: Reduce portion size
- Option 3: Swap expensive sides
- Option 4: Accept lower margin on this one dish
Make the choice deliberately — never sell below actual food cost.
Adjust prices as costs rise
Suppliers raise prices constantly. Check your minimums every 3 months to stay profitable:
- Have your supplier costs gone up?
- Does your calculated food cost match what you're actually spending?
- Which dishes now fall below minimum price?
Food cost calculators automatically update your minimum prices when supplier costs change, so you'll instantly see which dishes need price adjustments.
How do you calculate your minimum selling price? (step by step)
Calculate the actual food cost
Add up all ingredients that go on the plate: main ingredient, sides, sauces, spices and garnish. Don't forget trimming loss — if you buy whole fish, calculate with the actual fillet price after processing.
Determine your desired food cost percentage
Choose a realistic margin for this type of dish. Meat and fish usually 28-32%, pasta and vegetarian 25-30%. Check what's standard in your segment and what your operating costs allow.
Calculate the minimum price
Use the formula: food cost divided by (food cost % divided by 100). So with €8 food cost and 30% desired margin: €8 / 0.30 = €26.67 excl. VAT. For the menu: €26.67 × 1.09 = €29.07 incl. VAT.
✨ Pro tip
Check the minimum prices on your 8 most-ordered dishes from last weekend's service within 72 hours. These items likely drive 70% of your weekend revenue, so their pricing accuracy directly impacts your bottom line.
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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 include VAT in my minimum price calculation?
What if my minimum price is higher than competitors?
Can I use different margins for different dishes?
How often should I recalculate minimum prices?
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
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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