Last month, a pizzeria owner discovered he'd been losing €800 weekly for three months straight. He only tracked daily sales but ignored rising ingredient costs and oversized portions. A simple 30-minute monthly review could've caught this hemorrhaging profit before it became a crisis.
Why monthly checks are crucial for new starters
Your restaurant's first year brings constant surprises. Suppliers bump prices without warning, new staff members over-portion dishes, and recipes get tweaked on the fly. Skip monthly reviews and you might realize six months later that every plate served actually cost you money.
⚠️ Heads up:
Many new restaurants have a food cost of 40-45% in their first 6 months. That's too high to be profitable. A monthly check helps you spot this early.
The 5 most important numbers to check monthly
Track these core metrics. Don't overcomplicate things during your startup phase:
- Total revenue - compare with previous month
- Total purchases - how much you ordered from suppliers
- Food cost percentage - purchases divided by revenue
- Average check - revenue divided by number of covers
- Labor costs - including yourself as owner
💡 Example:
Restaurant The New Start - March 2024:
- Revenue: €28,000
- Purchases: €11,200
- Labor costs: €8,400
- Covers: 1,120
Food cost: €11,200 / €28,000 = 40%
Average check: €28,000 / 1,120 = €25.00
How to calculate and interpret your food cost
Food cost reveals what slice of every euro goes straight to ingredients. It's your profit's best friend or worst enemy.
Formula: Food cost % = (Total purchases / Revenue) × 100
From analyzing actual purchasing data across different restaurant types, these percentages signal healthy operations:
- First 3 months: 35-40% (you're still learning)
- Months 4-6: 30-35% (you're getting control)
- After 6 months: 28-32% (standardized)
💡 Example calculation:
Month 1: Revenue €25,000, Purchases €10,000
Food cost: €10,000 / €25,000 × 100 = 40%
This is normal for a new restaurant. Aim for 35% in month 2.
Warning signs that you need to take action
These red flags demand immediate attention:
- Food cost rises 2 months in a row - check your portion sizes
- Average check drops - guests are ordering cheaper dishes
- Purchases rise but revenue doesn't - you're buying too much or prices have gone up
- More than 10% waste - poor planning or portions too large
⚠️ Heads up:
If your food cost stays above 35% for 3 months, you're probably losing money. Check your recipes and portion sizes per dish.
Digital tools vs. Excel for your administration
Excel works fine initially, but specialized tools save hours of manual calculations. You'll eliminate formula errors and get instant insights.
Benefits of a digital tool:
- Automatic food cost calculation per dish
- Easy recipe adjustments when prices rise
- Overview of your most profitable dishes
- No risk of wrong formulas in Excel
💡 Practical tip:
Start with Excel for your first 2-3 months. Once your restaurant is running and you have more than 15 dishes on the menu, consider tools like KitchenNmbrs. This saves you a lot of time tracking costs.
When to adjust your prices
Price increases feel scary but they're often necessary for survival. Your customers would rather pay slightly more than lose their favorite restaurant entirely.
Raise your prices if:
- Your food cost stays above 35% for 2 months
- Suppliers raise their prices by more than 10%
- Your average check is too low for your target market
A price increase of €2-3 per main course can make the difference between profit and loss.
How do you set up a monthly check? (step by step)
Collect all receipts and invoices
Create a folder (physical or digital) where you collect all supplier invoices from the month. Also include cash purchases like fresh fish from the market.
Calculate your total purchases
Add up all expenses on ingredients. This is only products you sell, not cleaning supplies or office materials.
Get your revenue figures from your POS system
Check your POS system for total revenue for the month. Note: use revenue excluding VAT for a correct food cost calculation.
Calculate your food cost percentage
Divide your total purchases by your revenue and multiply by 100. If this comes out above 35%, analyze which dishes are too expensive.
Compare with previous month and make an action plan
Look at trends: is your food cost rising? Is your average check dropping? Create concrete actions like reducing portions or adjusting prices.
✨ Pro tip
Block the first Tuesday of every month from 9-10 AM for your financial review. Set a recurring calendar reminder with all the numbers you need to gather - this 60-minute ritual can save your restaurant from silent profit leaks.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
Was this article helpful?
Frequently asked questions
How often should I check my food cost as a new owner?
In your first 6 months at least monthly, preferably every 2 weeks. As a new restaurant you're still changing a lot and can adjust quickly if something's wrong.
What's a healthy food cost for a new restaurant?
In the first 3 months your food cost can be 35-40%. After that aim for 28-32%. Anything above 35% after six months is too high to be profitable.
What if my food cost is consistently too high?
First check your portion sizes - they're often too large. Then look at your most expensive dishes and consider price increases of €2-3 per dish.
📚 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.
Start your restaurant with the right numbers
A business plan without food cost calculation is a gamble. KitchenNmbrs lets you calculate recipes before you open. Start well-prepared. Try it free.
Start free trial →