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Basic knowledge and formulas

Learn the fundamental formulas and calculation methods for hospitality.

What's the difference between food cost and prime cost?

Most restaurant owners obsess over food cost percentages while completely ignoring the number that actually determines their profit. Food cost tracks ingredient...

⏱️ 2 min read 👁️ 447 📅 21 Feb 2026
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What food cost percentages are normal in hospitality?

A 6% reduction in food cost percentage equals €30,000 extra profit annually for a €500,000 restaurant. Most operators think 35-40% food cost is acceptable, but...

⏱️ 3 min read 👁️ 443 📅 21 Feb 2026
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Average Spend Per Guest: Formula + Example 2026

Picture this: you're closing up after a busy Saturday night, but you can't tell if those packed tables actually translated to profitable sales. Your average spe...

⏱️ 3 min read 👁️ 440 📅 22 Feb 2026
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What is a good dish rotation speed for your menu?

Most restaurants get menu rotation completely backwards – they either change everything at once or never change anything at all. The sweet spot? Refreshing 20-4...

⏱️ 3 min read 👁️ 440 📅 21 Feb 2026
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What is a healthy food margin in a restaurant?

Do you know if your restaurant dishes actually make money? Many restaurant owners think they're profitable but lose money on every plate served. Your food margi...

⏱️ 2 min read 👁️ 437 📅 21 Feb 2026
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How do I calculate margin if I think excluding VAT?

Most restaurant owners make a critical error when calculating their margins - they include VAT in their numbers, creating a false sense of profitability. VAT is...

⏱️ 2 min read 👁️ 436 📅 22 Feb 2026
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How do I calculate the effect of VAT on my selling price?

I'll admit it – VAT calculations confused me for years as a restaurant owner. Most of us make the same mistake: calculating food costs using VAT-inclusive price...

⏱️ 3 min read 👁️ 429 📅 21 Feb 2026
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How do I calculate my margins excluding VAT?

While most restaurant owners celebrate healthy margins on paper, they're often looking at inflated numbers that include VAT. The tax you collect from customers...

⏱️ 2 min read 👁️ 427 📅 21 Feb 2026
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How do I calculate the cost price of a cocktail with...

Accurate cocktail costing prevents profit leaks that drain your bar's bottom line. Most bartenders guess at drink costs, unknowingly sacrificing margins with ev...

⏱️ 3 min read 👁️ 423 📅 22 Feb 2026
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How do I calculate my restaurant's daily break-even revenue?

Break-even revenue tells you exactly how much daily turnover you need to avoid losing money. Most restaurant owners operate blindly without this crucial number,...

⏱️ 2 min read 👁️ 422 📅 27 Feb 2026
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What is a realistic occupancy rate per evening?

A realistic occupancy rate helps you plan better and forecast how many guests you can expect. Many restaurant owners calculate too optimistically, which leads t...

⏱️ 3 min read 👁️ 421 📅 22 Feb 2026
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What is a good margin on group arrangements?

Too many restaurants lose money on group bookings without realizing it. The hidden costs of arrangements eat away at profits faster than you'd expect. A healthy...

⏱️ 2 min read 👁️ 421 📅 21 Feb 2026
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What's the difference between theoretical food cost...

Your food cost calculations look perfect on paper, but your profits keep shrinking. Theoretical food cost reflects your recipe calculations, while actual food c...

⏱️ 4 min read 👁️ 416 📅 27 Feb 2026
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How do I determine the price of a daily soup?

Daily soup pricing can make or break your profit margins. Many kitchens underestimate costs by forgetting cream, herbs, and garnishes. You'll discover how to ca...

⏱️ 2 min read 👁️ 416 📅 22 Feb 2026
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What is actual food cost in a restaurant?

Most restaurants think they know their food costs, but they're wrong. You're probably calculating ingredient costs for your signature dishes while completely ig...

⏱️ 2 min read 👁️ 403 📅 21 Feb 2026
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How do I calculate food cost including waste percentage?

It's Monday morning and you're staring at last month's P&L wondering where your profits went. You calculated everything perfectly, yet your food costs are 8% hi...

⏱️ 3 min read 👁️ 397 📅 21 Feb 2026
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What's the difference between gross portion weight and...

Think of gross and net portion weight like an iceberg — what you see on the surface isn't the whole story. Most restaurant owners calculate with the weight they...

⏱️ 2 min read 👁️ 395 📅 27 Feb 2026
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How do I calculate cost price when working with liters?

Most restaurants struggle with liquid cost calculations because they purchase by the liter but serve by the portion. Converting from bulk liquid purchases to in...

⏱️ 3 min read 👁️ 395 📅 21 Feb 2026
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How do I correctly process staff meals in my food cost...

Are your food costs mysteriously high despite careful purchasing? Staff meals might be the culprit - a hidden expense that throws off your calculations. You're...

⏱️ 3 min read 👁️ 394 📅 27 Feb 2026
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How do I start calculating the cost of my first dish?

Over 60% of restaurants fail within their first year, and inaccurate food costing plays a major role in these closures. Your dish costs determine if you're maki...

⏱️ 3 min read 👁️ 394 📅 22 Feb 2026
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🔥 Most read in this category

The most viewed articles in Basic knowledge and formulas

1
What is food cost in a restaurant?
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2
What are typical margins on coffee and tea?
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3
What is the difference between food cost and cost price?
⏱️ 2 min · 👁️ 1,383 times read
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