Costing Your Street Food Menu
I’ll be honest it’s a bit of a ball ache but an essential part of running a financially successful food business so even If you’re adding a couple of new items to your menu or need a full renovation of your spending to improve profits, there are a few convenient ways that you can save yourself a few quid when it comes to food costs.
Here’s a couple of pointers to get you started.
Identify Your Direct Costs
Direct costs are things that cover all ingredients that go into each dish. To calculate these costs correctly, you have to consider everything that you use to produce the finished dish, counting things like salt, pepper, cooking oils and salad dressings.
Missing out small ingredients can seem like an unimportant matter at first, but be aware that using 5 pence worth of cooking oil per £6 dish could add up to a lot of money that will be lost from your monthly profits. Divide the total cost of each of these items by the number of dishes they will produce to calculate their direct cost.
Calculate Your Dish Price
Bearing in mind direct costs, the size of each portion and indirect costs, for instance electricity, staff wages, equipment maintenance and cleaning products, decide how much you need to charge per item to cover what has been spent and to make profit. Also bear in mind VAT as an indirect cost.
The best way to find out how much you are spending on indirect costs is to take the weekly total of electricity/gas/staff/consumables/etc costs and divide it by the typical number of dishes you normally sell a week.
Figure out how much of your ingredients goes into your dish, divide that by the price of your raw produce pack to get the price of each individual ingredient for that dish.
Since starting out in catering years ago I was shown and given templates on dish costing by lads of different managers and Head chefs (this task is a ball ache but is totally necessary). Start Excel or Google sheet to compile your dishes cost.
To work out your food cost % To work out your dish gross profit
FOOD COST / DISH PRICE x 100 DISH PRICE – COST PRICE / DISH PRICE X 100
Don’t forget that everything you don’t use needs to be accounted for too, only if it has cost you money. Let's say if you bought vegetables by weight, how much of that weight is leaves, stems, peelings and ends that can’t be used in the dish?
Fifteen quid of food waste could add up to £75 a week and potentially £1000 in one season which is massive. Build out dishes on your menu that use your leftovers. You can use leaves, stems to make veg stock and blend into soups. Make stocks from your chicken or beef carcasses and sausage rolls & pies from your pork leftovers.
To be financially successful, you’ll be looking to make a gross profit of around 65-75% on each of your dishes, meaning food costs should reach a maximum of 25-35% of the total sales price. Not all dishes are going to cost the same to produce, but that doesn’t mean you need massively different prices across your menu.
Get a good sales mix, serving more expensive dishes together with those that are cheap can level out the cost. Get a sense of balance within your dishes, fish is expensive but serving it with pasta will limit the overall price for the customer and business. Increasing vegetables and pulses while reducing meat or fish will increase gross profit.
Thanks for getting this far, I’m sure you are bored to tears now. Feel free to leave a comment on menu costing ;)