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Being a chef is not all about knowing how to flip an omelette or seasoning a steak, you’ll also need good organisational skills, a trusty calculator, and some basic culinary math skills to rise to the top.


There are many ways to calculating food costs. The number one rule of thumb is that your food costs should amount to about 33% of your menu price. Here’s a basic guide to working out your costs and determining menu prices.

1. Know your ingredients

Write down what ingredients go into each dish, including the actual amount used. It may seem silly to jot down things like salt and pepper or cooking oil, but it’s absolutely necessary if you want to be accurate with your costing.

2. Portion control

You can’t have a mini crab cake that turns into a jumbo crab cake in the hands of a different chef. So be sure to communicate with your fellow cooks to ensure that the portions are consistent. Use a weighing scale to measure out each portion when you’re starting out, and you’ll eventually get an instinctive feel of things after making the same dish a few times. Remember, portions affect costing and costing affects your final margin.
 

Weigh every item.
Remember, portions affect costing and costing affects your final margin.


3. Do a breakdown of the cost price of each ingredient

For example, if you’re using 10g of prawns, divide it accordingly based on your order invoice. Don’t forget to include all costs – for example, service taxes, delivery charges, etc. – that are related to your food costs.


4. Determining menu prices

Whatever your total cost of making a dish is, make sure it’s about 33% of your menu cost. For example, if your dish costs $24, your food cost should be about $8. If your portions get bigger and your menu price remains the same, your food cost will go up and your profit margin will go down.

5. Customers are number sensitive

It may not seem like much to add on a dollar or two to justify some varying costs, however, be aware that customers are very sensitive to price hikes, so you’ll want to be as accurate as you can in your kitchen math especially when you’re working out your menu the first time around.

Finding the right menu prices and striking the perfect balance between delighting diners and making a profit isn’t always easy. However, it’s a necessary and important step for your business to be successful.