Calculating your menu prices before opening can make the difference between profit and loss. Many new restaurants fail because they don't know what their dishes really cost. Proper pricing calculations are essential for survival and profitability.
Why calculating is so crucial
Opening a restaurant without calculating your menu prices is like driving with a blindfold on. You don't know where you're going and the chance of a crash is huge.
⚠️ Heads up:
70% of restaurants that close within 2 years had no idea what their dishes really cost. They guessed on their prices.
By calculating your menu prices in advance, you avoid these pitfalls:
- Prices too low: You're selling every dish at a loss
- Unrealistic expectations: You think you're making profit, but you're not
- Cashflow problems: Your money runs out before you know it
- Wrong focus: You promote dishes that cost you money
The real cost of a dish
Many starting entrepreneurs only think about the main ingredients. But a dish costs much more than that. I've seen this mistake cost the average restaurant EUR 200-400 per month in overlooked ingredient expenses.
? Example: Pasta Carbonara
What you probably calculate:
- Pasta: €0.80
- Bacon: €1.20
- Egg: €0.40
- Cheese: €0.90
Subtotal: €3.30
What you forget:
- Olive oil: €0.15
- Pepper: €0.05
- Salt: €0.02
- Garlic: €0.10
- Parsley: €0.20
- Butter for pan: €0.08
Real costs: €3.90
That difference of €0.60 seems small, but at 100 portions per week you're spending €3,120 more per year than you thought.
Calculate food cost percentage
The food cost is the percentage of your selling price that goes to ingredients. This is your most important number.
Formula: Food cost % = (Ingredient costs / Selling price excl. VAT) × 100
? Example: Food cost calculation
Your Pasta Carbonara:
- Ingredient costs: €3.90
- Menu price: €16.50 (incl. 9% VAT)
- Price excl. VAT: €16.50 / 1.09 = €15.14
Food cost: (€3.90 / €15.14) × 100 = 25.8%
That's great! Under 30% is good for pasta.
Realistic pricing
If your food cost comes out too high, you have two options: buy ingredients cheaper or raise your price.
⚠️ Heads up:
A food cost above 35% usually means you're losing money on that dish. Your other costs (staff, rent, energy) are then not covered.
Different standards apply to different dishes:
- Pasta, pizza: 20-28% food cost
- Meat, fish: 28-35% food cost
- Salads: 25-32% food cost
- Desserts: 15-25% food cost
Calculate break-even point
Besides food cost, you need to know how many covers you need at minimum to cover your fixed costs.
? Example: Break-even calculation
Your monthly fixed costs:
- Rent: €4,000
- Staff: €8,000
- Energy: €1,200
- Insurance: €500
- Other: €800
Total: €14,500 per month
Average bill: €25 excl. VAT
Average food cost: 30%
Gross margin per guest: €25 × 0.70 = €17.50
Break-even: €14,500 / €17.50 = 829 covers per month
That's about 28 guests per day at 30 days open. Achievable? Then you can start. If not, you need to adjust your concept.
What you need for calculating
To properly calculate your menu prices, you need this information:
- Exact recipes: All ingredients with quantities
- Purchase prices: What you really pay per kilo/liter
- Portion sizes: How many grams/ml per person
- Trim loss: How much you throw away during preparation
- Fixed costs: Rent, staff, energy per month
This seems like a lot of work, but it can save you thousands of euros. A food cost calculator helps keep this organized and calculates automatically.
Related articles
How do you calculate your menu prices? (step by step)
Create exact recipes for each dish
Write down exactly which ingredients go into each dish and how much. Don't forget anything: also oil, spices, garnish and everything that goes on the plate. Measure everything in grams or milliliters.
Look up all purchase prices
Go to your suppliers and ask for the exact prices per kilo or liter of all ingredients. Also factor in trim loss: if you buy whole fish but serve fillets, it becomes more expensive per kilo of usable product.
Calculate the cost price per dish
Add up all ingredient costs for one portion. Divide this by your selling price excluding VAT and multiply by 100 for your food cost percentage. Aim for 25-35% depending on your type of dish.
✨ Pro tip
Calculate your entire opening menu within the first 30 days of planning. You'll discover which dishes work financially before you commit to equipment, suppliers, or marketing materials.
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
Do I really need to include every ingredient in my calculation?
What's a good food cost for a new restaurant?
How do I handle seasonal price fluctuations in ingredients?
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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