TigerChef

When you are establishing a menu, it is important that you price the items in a way that brings in a profit. There are a number of ways that this is achieved, but the most reliable is through costing your recipes. This process involves determining exactly how much each recipe costs to make and how many people it will feed. When you have accomplished this, you can then see how much you need to charge in order to profit from the menu item. It is also a great way to see if a particular item is not going to work for your restaurant. So, how do you do that?

The first step is to understand your costs. Make a list of every ingredient in the recipe and then see what the cost was for you. Because deals vary from vendor to vendor, it is possible to serve the exact same recipe in two different places and have two different costs for it. What many people do not do is update their costs when the prices change. Over time, everything goes up and if you do not regularly cost your items then you will find that you aren’t making as much profit as you want to.

While it’s important to know how much every ingredient costs, it is just as important to understand how many people the recipe feeds. This will help you to break down the cost of the recipe per person. You can easily just add the ingredients cost to get an accurate picture of what you are paying for each recipe, but to get the most honest assessment of what you are paying for every person that orders, you must know the number of people that it will easily feed.

There are many different versions of software that will do this work for you. You will simply need to know the costs of the ingredients and the software will help you to determine the cost of your recipe. You can also achieve the same results with a basic spreadsheet. There is no necessity in anything extravagant to help you with this process. It can be as simple as you want it to be and still be just as effective for you. Now that you have a good idea of what your recipe costs, it is time to figure out what you should charge each person. Try and remember that there are more variables to consider than the recipe costs. You also have to look at the cost of labor, rent or mortgage, utilities, advertising and more. Everything that keeps you in business has to be factored in if you want to operate at a profit and not a loss. You will need to have a good idea of how many patrons you expect to serve and what the total of those expenses is. Add it all together and you will have a good base rate for your menu item. Try and keep it fair because otherwise your customers will turn elsewhere to have their needs met.

Filed under: Resource Central • How-To • General • Cost Savings

Tags: calculationg recipe cost, cost of ingredients, recipe, recipe cost, recipe cost software, understanding your costs