Your first menu decides if you'll make money or lose it from day one. Most new restaurant owners guess at prices or copy competitors without knowing their actual costs. Smart pricing starts with real cost calculations.
Why cost calculation matters most
Every dish on your menu needs a known cost. Otherwise, you're flying blind. Too many owners think: "The place down the street charges €18 for pasta, so I'll do €17." But what if they're bleeding money too?
⚠️ Note:
A typical food cost for restaurants is between 28% and 35%. If you go above 35%, you're probably not earning enough on that dish.
Track every single ingredient cost
Pick your 5-10 core dishes first. List everything that touches the plate:
- Main ingredients (meat, fish, vegetables)
- Garnishes and side dishes
- Sauces and dressings
- Oil, butter, spices
- Bread, decoration, everything
💡 Example: Pasta Carbonara
Ingredients for 1 portion:
- Pasta: 125g = €0.35
- Bacon: 40g = €1.20
- Eggs: 1 piece = €0.25
- Parmesan: 25g = €0.80
- Butter, pepper, parsley = €0.15
Total cost: €2.75
Find your minimum selling price
Once you know the cost, the math is straightforward:
Minimum selling price excl. VAT = Cost price / (Target food cost % / 100)
Most restaurants aim for 30% food cost. Then add VAT on top:
💡 Example: Pasta Carbonara pricing
Cost price: €2.75 | Target food cost: 30%
- Minimum price excl. VAT: €2.75 / 0.30 = €9.17
- Price incl. 9% VAT: €9.17 × 1.09 = €10.00
You can sell this dish profitably from €10.00.
Reality check against competitors
Now see how your calculated prices stack up against local competition. If you're way higher, you've got three moves:
- Accept thinner margins: Match market price but know you'll make less
- Rework the recipe: Find cheaper ingredients or trim portions
- Go upmarket: Better presentation, bigger portions, premium positioning
⚠️ Note:
Never go below your cost price to be "competitive." You'll lose money on every portion sold.
Design your full menu strategically
This is one of the most common blind spots in kitchen management: assuming every dish needs identical profit margins. Build up from 5-10 solid dishes and grow gradually. Smart menu design mixes different margin levels:
- Margin variety: Some dishes at 25% food cost, others at 35%
- Price psychology: €9.95 feels cheaper than €10.00
- Anchoring effect: One pricey signature dish makes everything else look reasonable
💡 Example: Menu balance
For a bistro with 12 main dishes:
- 2 dishes with 25% food cost (high margin)
- 6 dishes with 30% food cost (standard)
- 3 dishes with 35% food cost (popular but less profitable)
- 1 dish with 40% food cost (signature dish, attracts customers)
Average food cost: approximately 31%
Keep prices current with supplier changes
Supplier prices shift constantly. Review your cost calculations every 3 months minimum. A 10% supplier increase automatically pushes your food cost percentage higher.
A food cost calculator tracks ingredient prices automatically, alerting you when dishes become unprofitable.
How do you set up your first menu? (step by step)
Make a list of your 8-12 main dishes
Don't start too big. Choose dishes you can make well and whose ingredients you can easily source. Write down all ingredients that go on the plate for each dish.
Calculate the cost price per dish
Add up all ingredient costs: main ingredient, garnish, sauces, oil, spices. Don't forget anything. This cost price is your starting point for the selling price.
Calculate minimum selling price per dish
Use the formula: cost price / (desired food cost % / 100). At 30% food cost, you divide by 0.30. Then add 9% VAT for the menu price.
Compare with market prices in your area
Check what similar businesses charge for comparable dishes. If your price is much higher, consider recipe adjustments or accept a lower margin.
Balance your menu
Make sure you have a mix: some high-margin dishes (25% food cost), standard dishes (30%), and popular dishes that generate less profit (35%). On average, you'll come out well.
✨ Pro tip
Focus on perfecting just 3 signature dishes during your first 45 days of operation. Master their costs, portions, and pricing before expanding your menu.
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 include all ingredients in the cost price?
Yes, everything that touches the plate counts. Cooking oil, butter, spices, garnishes, bread - the works. Miss something and your true cost is higher than you think.
What food cost percentage should I target?
Most restaurants run 28-35% food cost. Start at 30% as your baseline. Fine dining can push 35%, while fast casual often hits 25-28%.
What if my calculated price beats competitor prices?
You've got three plays: accept lower margins, change the recipe with cheaper ingredients, or position as premium quality. Never sell below cost price.
How often should I recalculate my prices?
Every 3 months minimum, since supplier prices change regularly. If your food cost creeps above 35%, time to adjust menu prices.
Can different dishes have different profit margins?
Absolutely, and you should plan it that way. Popular items can run 35% food cost while specialty dishes hit 25%. Keep your overall average around 30%.
Do I calculate with or without VAT included?
Always work with prices excluding VAT first. Calculate your minimum price without tax, then add the 9% VAT for your final menu price.
📚 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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