Every minute your chef spends prepping a dish costs real money. That 20-minute appetizer might seem profitable until you factor in labor costs. Smart restaurateurs calculate the true cost before adding any dish to their menu.
Why prep time is crucial for your margin
Most chefs focus solely on ingredient costs. But your chef's time carries a price tag too. A complex dish with multiple steps can destroy your labor budget, even when ingredients cost pennies.
? Example:
Dish A: 5 minutes prep, €8 ingredients, selling price €28
Dish B: 25 minutes prep, €6 ingredients, selling price €28
At €30/hour labor costs, dish B costs €10 more in labor!
Calculate total cost price including labor
Your real cost price has three components:
- Ingredient costs: everything that goes on the plate
- Labor costs: time × chef hourly wage
- Overhead costs: energy, equipment depreciation
For labor costs, use your chef's complete hourly wage, including employer contributions. From analyzing actual purchasing data across different restaurant types, this typically ranges from €25-35 per hour, depending on experience and location.
? Example calculation:
New pasta dish:
- Ingredients: €7.50
- Prep time: 12 minutes
- Chef hourly wage: €30
- Labor costs: (12/60) × €30 = €6.00
Total cost price: €7.50 + €6.00 = €13.50
Determine your desired margin
For healthy profits, your total cost price (food + labor) shouldn't exceed 50-60% of your selling price. So:
- At €13.50 cost price: minimum €22.50-27.00 selling price (excl. VAT)
- Including 9% VAT: €24.50-29.40 on the menu
⚠️ Note:
Always calculate with your actual hourly wage including employer contributions. Many business owners only calculate with net wages and lose money.
Optimize prep time vs. quality
You're not chasing the fastest dish, but the most profitable one. Sometimes investing more time pays off if customers will pay a premium.
? Example optimization:
Original recipe: 25 minutes, €35 selling price
Adjusted recipe: 15 minutes, €32 selling price
Savings: €5 labor, loss: €3 revenue = €2 better margin per portion
Examine every step in your recipe. Can you prep ingredients during slow periods? Can you streamline techniques without sacrificing quality?
Test and measure in practice
Theoretical calculations get you started, but real-world testing reveals what actually works. Track these metrics during the first few weeks:
- Actual prep time (including mise-en-place)
- How many portions per hour your chef can produce
- How your team adapts to the new recipe
- Whether guests accept the price point
A food cost calculator can help you track these numbers and refine your recipes based on actual kitchen data.
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How do you calculate the ideal prep time? (step by step)
Measure the actual prep time
Have your chef make the dish 3 times and measure each time. Take the average, including all prep and finishing. Also include cleanup time.
Calculate labor costs per portion
Multiply the prep time (in hours) by your chef's total hourly wage. Calculate with €25-35 per hour including employer contributions.
Add ingredient and labor costs
Your total cost price = ingredient costs + labor costs. This should be no more than 50-60% of your desired selling price excl. VAT.
Determine your minimum selling price
Divide your total cost price by 0.55 for a healthy margin. Multiply by 1.09 for the price including 9% VAT on your menu.
Optimize where needed
If your selling price becomes too high, look for ways to reduce prep time without losing quality. Sometimes you can combine steps or prep ahead.
✨ Pro tip
Time your new dish during both quiet periods and peak service over 2 weeks. Rush conditions typically add 25% to prep time, so factor that buffer into your final cost calculations.
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 cleanup time in the prep time?
What if prep time varies between chefs?
How do I calculate mise-en-place time?
Can I ignore labor costs for simple dishes?
What if guests think the calculated price is too high?
How do I account for prep time during rush versus slow periods?
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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