How to Price Every Dish So It Actually Makes Money

Start with what your food actually costs

You need to know the exact cost of every ingredient in every dish. Not a guess. The actual number.

Weigh your portions. A six-ounce chicken breast costs different money than an eight-ounce one. Measure your rice, sauce, vegetables. Add up the cost of every item that goes on the plate, including oil or butter used in cooking. Don't forget small things—the lemon wedge, the side of mayo, the garnish. They add up.

Write these numbers down. Seriously. You'll use them for every pricing decision.

Decide what percentage of your selling price goes to food

Most restaurants aim for food costs between 28 and 35 percent of what the customer pays. Some run lower, some higher—it depends on your type of food and your neighborhood.

Here's the math: if your chicken dish costs four dollars in ingredients, and you want food costs at 30 percent, divide 4 by 0.30. Your selling price is about 13 dollars and 35 cents.

If 35 percent works better for your place, divide 4 by 0.35 instead. You'd charge about 11 dollars and 40 cents.

The lower your food-cost percentage, the more room you have for labor, rent, and profit. But you can't charge so much that nobody buys the dish.

Factor in your labor, not just food

Your cooks need to get paid. Your hands need to get paid. A complex dish that takes ten minutes to make ties up labor that could have made three simple dishes.

If a salad takes two minutes and a braise takes twenty minutes, the braise needs a bigger markup to justify the labor time. This is when you might run food costs at 30 percent for the braise but 32 or 33 percent for the salad, even if the ingredients cost similar money.

Don't try to price every dish the same way. They're not the same.

Check your prices against what people will pay

Price that chicken at thirteen dollars, then test it. If nobody orders it, you have a problem. If you run out, you might have priced it too low.

Look at what similar places around you charge for similar food. You don't have to match them, but you should know where you stand. A taco stand and a table-service restaurant charge different money for chicken.

Watch for dishes that lose money

After you've been running a few weeks, look at what actually sold and what people actually ate. A dish that sounded good but gets sent back full is a pricing problem and a recipe problem.

If a side dish or appetizer isn't hitting your food-cost target, raise the price or shrink the portion. Small changes work better than big ones.

The one thing to remember

You can't run a kitchen on hope. You need the actual cost of every ingredient, you need to know what percentage of your price goes to food, and you need to check your math against reality. That's it.

Jetsy can store your recipe costs and show you what every dish actually makes you—food cost, labor, margins, everything. Takes the guesswork out of pricing and lets you see which dishes are earning their spot on the menu.