Recipe Costing

What does this mean? Costing out a recipe? Why would it need to be done? What are the benefits? From my experience, it is a vital necessity to have in order to operate a successful restaurant.

In this blog, I’ll be explaining the process of costing out a recipe and the different applications it can be used. Should you have any questions, please feel free to leave a comment.

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There are many factors you need to consider when preparing to cost out a recipe.  The first thing you need is the actual recipe and it’s ingredients’ measurements. How can you cost something that doesn’t exist, right? Be sure to list EVERYTHING in the recipe. And the most accurate measurement.

For example, a salsa recipe is as follows:

Tomatos, diced: 4 Cups

Peeled Shallots, minced: 3 Tbl

Lime Juice: 2 Oz

Green Onion: 0.25 Cup

Garlic, minced: 2 Tbl

Then, you’ll need to know the raw cost of the ingredients. To do this, you will need to refer to your vendor price list. For those of you NOT in the restaurant business and doing this in your home, just refer to the receipts for the pricing.

As an example, let’s look at the lime juice in the above example. Let presume the lime juice is contained in a one gallon (128 fl. oz) jug. You purchased the jug of lime juice for $5.12. Take that cost ($5.12) and divide by 128 (ounces) and you get a raw cost of $0.04 per ounce.  This is why you need to know exactly what you are spending on each ingredient.

Before we begin to look at the spreadsheet, I need to discuss and illustrate how to use the following spreadsheet:

Instructions

Looking at the next graphic, you’ll see a lot of information in each of the cells. Starting from the top, you’ll input the recipe name, restaurant name, author, the date, number of portions each recipe yields, the serving size, and Unit of Measure. Remember, the yellow shaded cells are the cells where you can input data. Don’t forget to enter in menu price. This is the price that you are currently selling. The cell underneath, I6, is your target food cost percentage.

Most restaurants try to have an overall target food cost of 25%-30%. You’ll notice as you begin to cost out numerous recipes, most pasta dishes will be well below the 25% food cost, most are between 12%-18%. Majority of your proteins will be anywhere between 30%-40%.

Example

Once you enter in the ingredients, the quantities, the weight or volume (not both!), the price per unit and the yield percentage, the formulas will calculate the recipe cost for each ingredient for the recipe (Column I). The sum of the ingredient costs in Column I are automatically added and totaled in Cell E7.

Then, looking at Column E, Row 6, the formula calculates the cost per portion. Cell E7 illustrates the total cost of food for the entire recipe. Cell E8 illustrates the profit margin per portion that you can expect to make (based upon the price entered in Cell I5).

This is a vital tool to find out the exact cost of your recipes and food items.  Using this tool, you can confidently price your menu more accurately.

I have also used this form to cost out catering orders. Simply put the catering menu items where you would enter the ingredients. Enter the number of servings and the cost per serving for each line item. The formulas that are already in the spreadsheet will calculate the total cost of food and break down the price per person (granted you entered the total headcount in Cell B5).

Feel free to download this blank spreadsheet here:

00Blank Recipe Costing

IF you still have any problems, feel free to shoot me a message.

My direct email is: ForkThisPlate@gmail.com

Until next time…FORKTHISPLATE!

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