Tools in This Collection
Menu Pricing: Start with Food Cost, Then Work Backward
The most common menu pricing mistake is setting prices based on what feels right or what competitors charge — without checking whether those prices actually cover your costs. The correct approach: calculate your ingredient cost per dish, then divide by your target food cost percentage to get your minimum menu price. Industry standard food cost target is 28-35% of menu price for food trucks and casual restaurants.
Example: A burger using $4.50 in ingredients at a 35% target food cost: Menu price = $4.50 / 0.35 = $12.86 — round to $13. At 30% target: $4.50 / 0.30 = $15.00. The Food Cost Percentage Calculator computes this for any menu item and flags when you're outside your target range. Run it for every new item before adding it to the menu, and re-run it whenever a major ingredient price changes.
Setting Prices with the Menu Pricing Tool
The Menu Pricing Tool goes beyond raw ingredient cost to factor in prep time and overhead allocation. A dish requiring 8 minutes of prep at $20/hour labor adds $2.67 in labor cost. Total plate cost = ingredient cost + allocated labor. This is especially important for dishes that appear cheap to make but are time-intensive — they can drag down your overall labor efficiency. For a food truck where the owner is doing the cooking, failing to account for your own labor time means you're paying yourself less than minimum wage to produce a menu item that looks profitable on paper.
Checking Overall Profit Margins
Individual menu pricing is only part of the picture. Your overall restaurant or food truck profitability depends on how food, labor, and overhead combine across your entire menu mix. The Restaurant Profit Margin Calculator takes your total revenue, food cost percentage, labor percentage, and overhead costs to show net profit margin and flag where costs are out of benchmark range. Industry benchmarks: food 28-35%, labor 28-35%, prime cost (food + labor) below 60%, rent/overhead below 10-15%. Use all three tools together: Food Cost Calculator item by item, Menu Pricing Tool to set prices, and Profit Margin Calculator to verify your overall margin is viable.
Frequently Asked Questions
What food cost percentage should I target for a restaurant or food truck?
Most food trucks and casual restaurants target 28-35% food cost. Full-service restaurants often target 25-32%. Below 28% may mean under-portioning or very cheap ingredients. Above 38% makes it nearly impossible to cover labor, overhead, and profit. Track food cost per menu item monthly — ingredient price increases can silently erode margins without changing your menu prices.
How do I calculate the right menu price for a dish?
Divide your ingredient cost by your target food cost percentage. If a dish costs $3.75 in ingredients and you're targeting 30% food cost: $3.75 / 0.30 = $12.50 menu price. For a 35% target: $3.75 / 0.35 = $10.71. Always round up to a psychologically effective price point ($10.95 or $11). Then verify the price against your market — if similar dishes sell for significantly less nearby, you may need to reduce your cost or accept a lower margin on that item.
What is prime cost and why does it matter?
Prime cost is food cost plus labor cost combined, expressed as a percentage of revenue. It's the most important profitability metric in food service because food and labor are the two largest variable costs. A prime cost below 55% leaves room for overhead, rent, and profit. Above 65% is a warning sign — even a small revenue dip will create losses. Track prime cost weekly, not just monthly, to catch problems early.