The menu was costed in spring
When the spring menu went live, the chef and owner sat down with a spreadsheet: each dish, each ingredient, each quantity, each price, and a gross profit percentage at the bottom. The numbers looked right and the menu was priced accordingly.
Now it is autumn. Lamb shoulder is dearer, the olive oil supplier changed pack sizes, and the fish on the special is whatever came in this morning. The costing spreadsheet has not been opened since spring. Nobody knows which dishes are still making the margin you intended.
Costings are a snapshot, prices are a film
Costing a dish is a one-off job in most restaurants, done when the menu is written. Prices, though, change with every invoice. Without a link between the two, the costing starts going out of date the day after it is finished.
- Ingredient prices in the costing sheet are typed in by hand.
- Pack sizes and yields (trim on meat, peel on veg) are not recorded consistently.
- Sub-recipes such as stocks, sauces and dressings are costed separately, or not at all.
- Specials are rarely costed before they go on the board.
A worked example: a lamb dish was costed at a comfortable margin. Since then the lamb price has risen twice and the chef has added a jus that was not in the original costing. The dish is one of your best sellers. It is also now earning much less per plate than the menu was designed for, and every busy night makes it worse.
Why stale costings matter
Menu prices and portion decisions are based on costings. If the costings are wrong, you may be pricing popular dishes too low, or pushing specials that barely cover their ingredients. Overall food cost tells you something is wrong, but not which dishes are responsible.
When it is time to reprice the menu, redoing every costing by hand is a big job, so it gets put off.
Portion drift adds to it. A costing assumes a set weight of protein and a set amount of garnish. Over months, portions creep as different chefs plate the dish, and the costing on paper and the plate in front of the guest move further apart. Without a current costing to compare against, there is nothing to measure the drift by.
How we build live recipe costing
- Recipes and sub-recipes are entered once: ingredients, quantities, and yields such as trim loss, with sub-recipes like stocks and sauces used inside dishes.
- Each ingredient is linked to the supplier product you buy, with the pack size, so the unit price can be worked out.
- Prices are updated from your captured supplier invoices, so every dish is recosted when an ingredient's price changes.
- Menu prices are taken from your till, so each dish shows cost, price and gross profit.
- Dishes that fall below the margin you set are flagged, with the ingredient that caused the change.
- Specials can be costed in the same place in a few minutes before they go on the board.
| Item | Old costing sheet | Live costing |
|---|---|---|
| Ingredient prices | Typed at menu launch | Updated from invoices |
| Sub-recipes | Often left out | Costed and reused |
| Gross profit per dish | As at launch | Current |
| Specials | Rarely costed | Costed before service |
Your menu prices and target margins are business decisions for you. The costing shows the numbers; it does not set prices.
Menu decisions with current numbers
When a dish slips, you know which one, by how much and why. You can decide to reprice, change a supplier, adjust a portion or leave it, knowing the effect. Specials are costed before they are sold. Repricing the menu becomes a review of up-to-date numbers rather than a weekend with a spreadsheet.
Combined with till sales, you can also see which dishes contribute most in total, not only which have the best percentage.
Signs your costings are stale
- Dish costings were last updated when the menu launched.
- Food cost has risen and you are not sure which dishes caused it.
- Sub-recipes are not included in costings.
- Specials go on the board without being costed.
- Repricing the menu feels like too big a job to start.