Business News

How to price your restaurant menu

One of the most enjoyable aspects of opening up a new food venue is considering your menu. All creative chefs love to come up with the tastiest dishes that will delight customers and maybe even win awards. But it’s vital to be able to price the menu so that it will cover costs, provide the necessary margin and be affordable to your target market. So what factors do you need to consider?

The necessary considerations include portion control, the ingredient costs, your audience, your running costs and the profit you need to make. The line between underpricing and overpricing your menu is very fine. You must be intelligent and thorough about choosing your costing method to ensure that your entire cost base is factored in appropriately, and to avoid going into the red as a new business.


Gross profit margin is, of course, a primary driver for any commercial business. The figure is what you have made once expenses have been paid. One rule is to ensure that your menu returns a gross profit of 20pc, once costs have been deducted. Costs will be both variable and fixed and an accountant can be used to help you to apportion costs in the right way.

The cost of food must be considered in full. This must also incorporate the costs of the kitchen – such as your staff, equipment leasing or depreciation of purchased assets, electricity, crockery and other sundries. If you need to purchase new equipment, such as a glass door refrigerator or dishwasher, this must also be covered financially with reserves built up from profits. Again, factor these in and find out more about commercial kitchen equipment at:

Don’t forget portion control either. Some restaurants are known for serving hearty food and others will serve more complex, smaller dishes. Again, weigh up portion sizes against cost. Overly large sizes may lead to food waste and lose you money. Portion sizes which are too small may well lose you customers. Balance is essential and you will need to ensure that your team is on the ball about sending out consistent sizes in order to manage costs.

Remember that the profit you make on your food will ultimately be the way that your restaurant makes its money. Get it right and you’ll be one step closer to success.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

To Top