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4 Steps to Calculate Restaurant Food Cost

food cost Oct 15, 2019

Food cost is one of the most important things you have to calculate in your restaurant business. Mostly because it's a part of the most important calculation - restaurant prime cost. If you don't know what restaurant prime cost it, read this post on it.

To learn how to calculate your actual food cost, watch the video, or continue reading below.

Most restaurant owners aren't calculating their food cost properly.

Once you have a budget and have set your target food cost, you...

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Set Restaurant Prices to Make Money

Where should your restaurant prices be set? How do you set your restaurant prices for your food and drink so you can make money. Watch this video, or continue reading below, to learn the answers and move forward with a strategy for setting prices in your restaurant. 

A big question for restaurant owners is, "Where should I be priced?" When it comes to setting restaurant prices, there are three things I think about right away:

  1. Are you really, really good and can set your prices above...
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Do Service Charges in Restaurants Make Sense?

There has been a trend of adding service charges in restaurants that directly charge the guest for business operations, such as rising food prices and increasing minimum wage. Should you be using service charges in your restaurant? Watch this video, or continue reading below, to hear my opinion and reasons for that opinion. 

There is a major change in the restaurant industry and it's the appearance of service charges in restaurants. In some cases it's in place of tips. I don't think...

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How to Find the Cost to Open a Restaurant

If you're looking at a restaurant as a new business, the big question tends to be how much does it cost to open a restaurant? There is a lot of information out there and it's hard to figure out the true cost to open a restaurant. Watch this video, or continue reading below, for my take on the things you must have in place to find the cost.

The big question when looking to open any new business is, "How much is this going to cost me?" Which is also the question of, "Do I have enough money to...

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3 Food Cost Percentage Formulas

Would you like to know what the food cost percentage formula is for your restaurant? What if I told you there are actually three food cost percentages? Watch this video, or continue reading below, to learn what they are and how to calculate them. 

Most restaurant owners are paying attention to the wrong number. Because they don't take inventory, they're dividing food purchases by sales to come up with a food cost percentage, but it's wrong. Really, there are three food cost calculations...

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Use Menu Engineering to Increase Restaurant Profits

Menu engineering is one way to increase restaurant sales. If you understand that your menu is a sales tool, you should maximize it to maximize your restaurant sales. Watch this video, or keep reading below, to learn more about menu engineering and what you need to do first to make it effective. 

Before you can really engineer your menu, you must have recipe costing cards in place for every item on your menu. If you don't have these in place, please search my YouTube channel for...

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What Is a Recipe Cost Calculator

 Are you looking for that magical recipe cost calculator? Most restaurants don't use any kind of recipe cost calculator and have a higher food cost and lower profits because they don't know what their menu items cost to make. Watch this video to learn the magic of a recipe cost calculator and how to cost out your recipes. 

When it comes to recipe costing cards, number one, you've got to get every item that you're going to buy. Any product that you buy from any distributors - small...

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What Is the Prime Cost Formula

Have you heard about prime cost and wondered what the definition of prime cost was? Restaurant prime cost is the one number you need to know and manage to make any money in the restaurant business. Watch this video (or keep reading) to learn the prime cost formula and where to find the numbers in your restaurant. 

For decades, restaurants have been run with one key number in mind. This magic number ensures that the owners make money. It’s called prime cost. To old timers like me,...

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How to Run a Restaurant

Do you want to know how to run a restaurant successfully? How to make money in the restaurant business? Watch this video (or keep reading) to learn how to run a restaurant. 

As an expert in the restaurant industry, I have seen it all when it comes to restaurants. I've spent almost 30 years working with restaurant owners and managers. I've seen people succeed incredibly, and I've seen people fail terribly. One of the critical pieces to running a restaurant successfully is understanding...

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What Is the Food Cost Formula

Understanding your food cost in your restaurant is very important. Let's cover the food cost formula. Watch this video (or keep reading) to learn the food cost formula.  

When you want to find your restaurant's food cost, it would be nice to have a food cost calculator. But since that's really lacking, let's instead focus on the food cost formula so you can calculate it yourself anytime. 

What Is the Food Cost Formula?

  • Beginning inventory (what you started with on the...
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