What Is a Good Food Cost for a Restaurant
One of the most common questions we get asked is, “What is a good food cost for a restaurant?” Another common one is, “What is the average food cost for a restaurant?” Here’s the deal – your restaurant is not average, especially if you’re an independent restaurant. You can’t determine a good food cost for your restaurant based on some industry standard.
Your restaurant food cost is determined by what’s right for your restaurant. So, how do you determine a good food cost for a restaurant, one that is right for your restaurant?
Watch this video to learn how.
To find a good food cost for your restaurant, the first place we have to start is with an explanation of the one number you MUST know to make any money in your restaurant: restaurant prime cost.
Prime cost is the combination of your cost of goods sold (food and beverage cost) and your labor cost, including taxes, benefits and insurance. The ideal prime cost is 55%.
It doesn’t matter how you break those points up between the two categories as long as you get to 55%. That means your labor can be 30% as long as your cost of goods sold is 25% and vice versa. Any combination works, as long as you stay at or below 55%.
YOU have to develop a budget that tells you what your actual costs are and what your ideal costs are.
There are many moving parts including your recipe costing cards that tell you what your ideal food cost is and your menu mix that tells you what people are actually purchasing tells you what your food cost should be.
When you have all three, you have the path to determining what a good food cost is for your restaurant.
Let us help you find these numbers in your restaurant. TheRestaurantExpert.com offers restaurant management software that helps you automate these processes so you can keep your prime cost in check, ensuring you make money in your restaurant.
For more ideas for finding a good food cost for your restaurant, read our free special report, Breaking Away from the Insanity: How to easily take control of your restaurant and make more money. Download it here.