Food cost calculation, do not underestimate the importance that this formula affects the finances of your restaurant and the way you invest to expand your business. When it comes to opening a new business or improving the potential of already active premises, it is essential to analyze all the variables that characterize the cost of a single dish , allowing you to have a clear overview of what future expenses and earnings will be.
Before going to see which factors weigh the most on the food cost calculation scale, it is important to keep in mind that there are different types of costs . There are direct costs, i.e. spending on raw materials and labour, and indirect costs, such as depreciation and investment in equipment. The sum of these two types of costs is the cost of production. These are all elements to be taken into consideration in a general balance when calculating the food cost.
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Food cost calculation, what values?

So what are the values ​​to take into consideration when calculating the food cost? It is essential to include the cost of the raw material, the cost of labor and a percentage of general additional costs in the cost analysis. Therefore, taking up the previous definitions, the direct costs of raw materials and labor will weigh on the food cost balance on the one hand, and indirect overhead costs such as the purchase of equipment and accessories on the other.
In the economy of a restaurant, it is estimated that personnel and raw material expenses are the first to have the greatest impact on the cost of a single dish, reaching around 75-80% of the overall figure . It is therefore evident how learning to manage these types of expenditure correctly can improve profit margins, limiting investment.

How to manage direct costs?

As previously mentioned, in direct costs we find both the cost of labor and raw materials. As regards the latter, in most cases there is a tendency to divide them into macro-groups according to their main characteristics. We therefore have the group of meat, fish or vegetables. Each set is evaluated individually on the basis of the purchase cost and the incidence on the total costs.
In the management of labor costs, on the other hand, the predominant factors are the total hours of work for the creation of the dish, broken down by the cost of the single course. This gives an approximation of the actual cost of sale.

Calculate food cost in five steps

The food cost is a complex calculation that depends on many factors. There is no magic formula, but we can summarize some simple rules to follow to improve the trend of expenses, increasing the chances of earnings.
1) Calculate in advance the number of courses sold for a single dish on the menu. It is an approximation based on previous sales, the season in which they are offered and your target audience.
2) Pay attention to scraps and waste. It is also essential to record all free lunches offered to staff and raw materials that can no longer be used, such as cooking oil.
3) Always consider the incidence. The incidence is the ratio between the cost of the ingredients of a dish and its selling price, these two costs must not be confused because they have a different weight in the food cost scale.
4) Check inventories monthly. A method that may take some time, but has a particular impact on waste and purchases of raw materials.
5) Track the sales of each dish. In this way to verify the correctness of your quote made.
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