Almost every venue we meet has at least one popular dish quietly losing money — usually something priced years ago, built on ingredients that have gone up 30% since. The fix isn’t complicated. An hour with your supplier invoices and a spreadsheet will tell you more about your menu than a year of gut feel.
Step one: cost a single dish, properly
Pick your best seller. List every ingredient that goes on the plate, in the actual quantities used — not the recipe card from 2022, what your kitchen actually plates. Then price each ingredient from your most recent invoices.
| Ingredient | Quantity | Cost |
|---|---|---|
| Chicken breast | 220 g | $3.30 |
| Crumb, egg, flour | — | $0.75 |
| Chips | 200 g | $0.90 |
| Salad + dressing | — | $1.10 |
| Gravy | 60 ml | $0.35 |
| Plate cost | $6.40 |
If that schnitzel sells for $26, the food cost is 24.6% — a healthy dish. If it’s still on the menu at $19 from two price rises ago, it’s 33.7%, and every serve is giving away margin your busiest night can’t afford.
Step two: don’t forget the quiet costs
Add a realistic allowance for the things that never make the recipe card: oil, seasoning, garnish, packaging for takeaway, and trim waste. A flat 5–10% loading on the ingredient cost is a common, honest approximation. If you buy whole produce and trim it, cost the usable yield, not the purchase weight — a $12/kg piece of rump that yields 80% usable meat really costs $15/kg on the plate.
Step three: work out your target
Most kitchens aim for food cost between 25% and 35% of the menu price, depending on format. Rather than pricing every dish to the same number, think in dollars as well as percentages: a $4 margin at 35% on a high-volume burger can beat a $9 margin at 25% on a steak that sells twice a week. Percentages keep you honest; dollars pay the rent.
Step four: put every dish on a map
Once you’ve costed the menu, plot each dish two ways — how well it sells, and how much margin it makes. Every item lands in one of four boxes:
- Stars (popular, profitable): protect them. Never run out, never let quality slip.
- Workhorses (popular, low margin): re-cost first. Small price rise, cheaper garnish, or tighter portion — small changes here move the whole business because of the volume.
- Puzzles (unpopular, profitable): promote them. Specials board, staff recommendations, better menu position.
- Dogs (unpopular, unprofitable): cut them. Every dog ties up stock, prep, and menu space a star could use.
Step five: keep it current
Costing is not a one-off. Supplier prices move constantly — and a 40-cent rise in chicken quietly turns a star into a workhorse without anyone noticing. This is where doing it in your POS instead of a spreadsheet pays off: when the system holds your recipes and reads your supplier invoices, plate costs update as prices change, and you find out about margin creep in weeks, not at year end.
Start small: you don’t need to cost all 60 items this week. Cost your ten best sellers — they carry most of your revenue, so that’s where mispricing hurts most. One evening’s work, and you’ll likely find at least one dish that needs a new price tomorrow.
This is exactly what our quarterly business reviews build on: your POS captures the data all quarter, then we sit down together and turn it into decisions — what to reprice, what to cut, where the margin is leaking. The weekly numbers keep you on course; the quarterly review sets the direction.
Ask the provider for a reference from a comparable venue — similar size, similar town. Ten minutes on the phone with another owner who’s been through setup, training, and their first support call is worth more than any brochure.
Rather have this done for you?
We set up recipes and supplier invoices in your POS, so plate costs stay current automatically, and review your menu margins with you every quarter.
