Calculating accurate menu prices to ensure all items sell and the canteen makes a profit is essential, ask these simple questions:
- do you know the cost price of every single item?
- do you use a formula for calculating the selling price of all items?
- does your canteen policy state healthier items should be priced lower than others?
Before you can make a decision on how much you are going to charge, you need to look at the BIG picture of how your canteen operates. Unless something very drastic has changed (e.g. you have 30% more/less students, or wages have gone up by $5 an hour) you should be able to use last year’s figures as a guide.
To work out the selling price of a menu item you must:
- know what the cost price of each menu item is
- know what your overheads and
- know what your required Gross profit is.
It is also imperative that standardised recipes and portion control techniques are followed. Standard recipes ensure high-quality food production. A standardised recipe is one that has been tested several times until the desired quality and quantity has been developed to meet the needs of the establishment. Including images on recipe cards or instructions ensures the same products every time which will in turn ensure it costs the same every time it is prepared. Tip: Keep two copies of each recipe in case one copy is accidentally misplaced or destroyed.
WASCA has developed a variety of templates both in Word, and Excel format that includes formulae to help you work out your individual recipe costs and a fact sheet to help you calculate the appropriate mark-up. All these resources (see below) are available for WASCA members, simply send us an email at: email@example.com and we will forward them directly to you. Or call us on 08 9264 4999 and we can discuss your financial process and procedures.
- Profit and Loss spreadsheet template: an Excel spreadsheet that contains formulae so you can keep track of incoming and outgoing expenses accurately
- Recipe costing template: a Word document to accurately cost recipes ensuring best practice financial processes
- Recipe costing template: an Excel document that will add up the cost of each ingredient and then apply your mark-up based on your own calculations
- Setting menu prices: a fact sheet with tips and tricks.