How To Calculate Your Food Cost Percentage

▸▸ What is the food cost formula and how can you use it to calculate your restaurants food cost percentage?
I will explain everything you need to know about food costing in this video. As a restaurateur, you have to know how to calculate your food cost so you can lower expenses and increase your profits.
If you own a restaurant or bar, and are struggling to figure out how to understand food and beverage costs, check out this video.
+ Why I started WISK
+ How to choose the right inventory management software
You can download the complete cost control guide here:
bit.ly/cost-co...
// Comment
Got any questions? Something to add?
Write a comment below to chat.
// Let's connect on...
+ Instagram: / wisk.ai
+ Facebook: / wiskapp
====================
Contents of this video:
====================
00:00 Intro
00:13 Three Most Common Mistakes
01:16 Why should you calculate your food costs?
03:37 How do you calculate your food costs?
06:31 Calculating food cost percentage
08:31 Food cost benchmarks

[@wiskai]

What is the food cost formula and how can you use it to calculate your restaurants food cost percentage? I will explain everything you need to know about food costing in this video.

[@khushalkhattak4040]

very well explained.

[@toddleech1055]

best, and simplest explanation ....thanks for this one.

[@wiskai]

You are welcome! Glad it was helpful.

[@user-we9li2uj6m]

Thank you! this really clarified a lot for me!

[@wiskai]

Glad it was helpful!

[@user-fw8le3hg6v]

❤❤❤❤❤ thank you brother! Your presentation very simple and to the point! Great job

[@wiskai]

Glad it was helpful!

[@user-ic2og7bj7b]

Thank you

[@wascalywabbit]

I like the by the dish way, I. think the other way might be a little too complicated for me at this time, but I'm doing a food trailer, so my operating costs should be a lot less so should I go with a lower profit margin to get more business or a higher profit margin and see where it goes

[@wiskai]

Hi there, it's a great question. The perfect balance is having enough profit margin to grow your business while also making the price attractive for consumers so you can actually sell that item. Nobody wants an item that's profitable on paper but not being sold in real life.
The general rule of thumb is ~30% cost of goods sold (COGS). This means that if you sell a dish for $10, the food costs would sum up to $3. Obviously, the higher the profit margin, the better from a pure profitability perspective, but there are two things to consider.
1. If you lower your COGS too much, how does that affect the quality? Being the cheapest isn't always the best.
2. If you increase your selling price too high, are you selling enough quantity? In other words, you can have a 90% profit margin, but what if that means you are selling 5 dishes per day. Versus, let's say, a 70% profit margin, but you are selling 100 dishes per day.
All this to say, if I were you, I would look at the cost of creating the dish and divide by 0.30 (i.e., 30%) to get a starting point. For example, if the dish costs you $3, you would do $3/0.30, which would give you $10. Then I would think about a marketing approach. Is $10 competitive where you are for that dish? Is it too low? Is it way too high?
Lastly, remember that pricing is not a one-time decision. It's a dynamic process that requires testing and adjustment. This way, you can stay responsive to market changes and ensure your pricing strategy is always on point.

[@SreeProshntoBiswas]

I've got ideas and strategies that could take your business to the next level.

[@user-nn8to8dt2o]

❤😂

[@sanjaysoni2691]

Sir. Plz speak in hindi. Or translate in hindi i am indian . I can't understand in English!