Setting menu prices is like building a house – you need a solid foundation or everything crumbles. Many new restaurant owners guess their prices or only copy competitors, causing them to operate for months without a healthy margin. You need a step-by-step approach to set menu prices that ensure a healthy food cost of 28-33% from opening day.
Start with your cost price per dish
For every menu price you first need the exact cost price of the dish. Add up literally everything: main ingredient, sides, sauce, oil, butter, garnish. Everything that goes on the plate.
💡 Example cost price steak:
For one portion of steak with fries and salad:
- Steak 200g: €6.40
- Fries 250g: €0.85
- Mixed salad: €1.20
- Sauce and butter: €0.65
- Garnish: €0.40
Total cost price: €9.50
Calculate your minimum selling price
With your cost price you can calculate what you need to charge at minimum for a healthy margin. Use this formula:
Minimum selling price excl. VAT = Cost price ÷ (Desired food cost % ÷ 100)
💡 Example calculation:
Cost price €9.50, desired food cost 30%:
- €9.50 ÷ 0.30 = €31.67 excl. VAT
- €31.67 × 1.09 (9% VAT) = €34.52 incl. VAT
Minimum menu price: €34.50
Check your competition and market position
Your calculated price is your floor. Now check if this price fits your concept and competition. Visit 3-5 comparable establishments in your area and review their menu prices.
⚠️ Note:
If your calculated price is much higher than the competition, the problem usually lies with your purchasing or recipes. Not with your pricing.
Build margin room for unforeseen costs
New restaurants always have unforeseen expenses. So deliberately build 2-3 percentage points of extra margin into your prices. Better 28% food cost than 33% and later discover you've calculated too tight.
- Suppliers sometimes raise prices after your opening
- Portions often become larger than planned
- Waste is higher in the first months
- Your team is still learning and makes mistakes
Test your prices with a trial menu
Organize a trial evening with friends, family or potential customers. From tracking this across dozens of restaurants, the ones that test their pricing before opening avoid 80% of margin problems later. Serve your menu at the calculated prices and ask for honest feedback.
💡 Practical test:
Invite 20 people for a trial menu:
- Serve at planned prices
- Ask: "Do you think this is a fair price for this dish?"
- Watch facial expressions when they see the bill
- Ask what they would expect to pay
If more than 30% find the price too high, then revise your concept or cost price.
Plan price adjustments for the first months
Reserve room to adjust prices after your first month. Track your actual food cost and compare it with your plan. Small adjustments of €1-2 per dish can make the difference between profit and loss.
How do you set healthy menu prices? (step by step)
Calculate exact cost price per dish
Add up all ingredients that go on the plate: main ingredient, sides, sauce, oil, butter, garnish. Use current purchase prices from your suppliers.
Determine your desired food cost percentage
Choose 28-30% food cost as a new business. This gives you a buffer for unforeseen costs and learning moments in the first months.
Calculate your minimum selling price
Divide your cost price by your desired food cost percentage. Multiply by 1.09 for 9% VAT. This is your absolute floor.
Compare with local competition
Check 3-5 comparable establishments in your area. If your prices are much higher, investigate your purchasing or recipes instead of reducing your margin.
Test with trial menu
Organize a trial evening with 15-20 potential customers. Serve at planned prices and ask for honest feedback on price-quality ratio.
✨ Pro tip
Calculate your opening prices at 27% food cost instead of 30%. Those extra 3 percentage points give you breathing room during your first 90 days of operation.
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 VAT in my cost price calculation?
No, always calculate with prices excluding VAT. You also don't pay VAT on your purchases. Add VAT to your selling price at the end.
What if my calculated price is higher than the competition?
Then the problem usually lies with your purchasing or recipes, not your margin. Check if you're not buying too expensively or using too generous portions.
What food cost percentage is healthy for a new restaurant?
Keep it between 28-30% as a new business. This gives you a buffer for learning moments, waste and unforeseen costs in the first months.
Can I adjust my prices after opening?
Yes, small adjustments of €1-2 per dish are normal. Plan this in advance and communicate transparently to guests if you raise prices.
How often should I recalculate my cost prices?
Check your top-selling dishes monthly. Suppliers regularly raise prices and you need to pass that through to maintain your margin.
Should I include cutting loss in my cost price?
Absolutely. If you buy whole salmon for €18/kg but have 45% cutting loss, you're actually paying €32.73/kg for the fillet. Calculate with that actual price.
What if my trial customers think prices are too high?
If over 30% of your trial guests find prices excessive, revisit your portion sizes or ingredient costs. Don't just lower margins – fix the underlying issue first.
📚 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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