Menu Costing Affords Restaurateurs Proper Pricing And Inventory Management

How often do you cost your menu items? Menu costing allows for proper pricing and inventory management.

Start by calculating the cost to produce the menu item. Obtain a menu item's recipe list and determine the cost for each ingredient.

Once you determine the menu item's cost, you can more effectively determine price.

Menu prices can be based on a combination of the following factors:

• Food cost percentage – On average, food costs range between 27% – 33%. Full-service restaurants are on the higher end of the range, while fast casual tend to be on the lower end.
• Desired profit margins – Margins (e.g. $10 margin on a main entrée) can be used for higher cost food items.