Cost in, price out
What should you charge for this?
Two ways to get to a price, and an honest view of what each one leaves you.
There are two defensible ways to price a dish from its cost, and they answer different questions. Targeting a food cost percentage asks what price keeps ingredients at a fixed share of revenue. Targeting a gross profit asks what price leaves a specific number of pesos on the plate. This calculator does both, and it is worth trying each on the same dish, because they disagree in a way that is genuinely informative.
Take a dish costing 60 pesos. A 30% target food cost gives 200 pesos. A target gross profit of 100 pesos gives 160. On a cheap dish the percentage method produces a price the market may not accept; on an expensive dish it can produce a price well above what anyone will pay, which is why steak is almost never priced on percentage alone.
The page opens on the target-food-cost method with the cost already filled in, so you can move the target and watch the price respond. Round suggestions appear underneath — nearest five, nearest ten, and the .95 and .99 endings — but the raw number stays the honest answer, and nothing is applied unless you choose it.
The two methods, side by side
Method A — selling price = cost per serving / (target food cost % / 100)
Method B — selling price = cost per serving + target gross profit
Method A keeps ingredient spend proportional to revenue and works well across a menu of similar items. Method B protects the cash contribution of each sale and is the better tool for expensive proteins and for anything sold in low volume.
Most menus end up using both: percentage pricing for the bulk of the list, cash-margin pricing for the few items where the percentage produces something absurd.
What the calculator cannot tell you
It cannot tell you what your customers will pay. Price is a market question, and a costing tool only sets the floor beneath which a sale makes no sense.
It cannot tell you about anchoring or menu psychology — that a dish placed next to a more expensive one sells better, or that removing currency symbols slightly increases spend.
It cannot account for what a price says about you. A price is a signal, and pricing a dish too low can reduce sales rather than increase them.
Delivery platforms change the arithmetic
A platform commission of fifteen to thirty per cent comes off the top of your price, not off your profit after everything else. A dish at 200 pesos with a 20% commission earns you 160, and if it cost 60 to make, your gross profit fell from 140 to 100 — a 29% reduction from one line you do not control.
Price delivery separately where the platform allows it, and cost the packaging into the delivery version. Selling the same dish at the same price through both channels is a decision to make less money on one of them.
Questions people actually ask
Should I use the same target percentage for every dish?
No. A single target across a whole menu drives prices to strange places at both ends. Use it as a default and override it where the resulting price is obviously wrong for the market.
What are the rounding suggestions for?
Prices ending in 5, 9 or 95 are a long-standing convention and tend to read as considered rather than arbitrary. They are offered as options because rounding is a judgement, not arithmetic — the calculator will not apply one silently.
How do I price a dish where the market price is below my cost-based price?
That is real information. Either the dish needs a cheaper build, a smaller portion, or it should not be on the menu. Selling below a sensible price to keep an item is a decision to subsidise it from everything else you sell.
Should the price include tax?
Set your price excluding tax, then add tax according to local rules. Mixing a tax-inclusive price with a tax-free cost overstates your margin.
Related
This calculator gives estimates based on what you enter. Real profitability also depends on labour, rent, utilities, taxes, delivery commissions, waste, discounts, and other operating costs.