A few years ago we were pricing so many different menus that we created our own Menu Price Calculator for use in the bakery and for our clients.

The calculator allows you to place in the costs of the raw ingredients for each dish and then work backwards in pricing it according to a Gross Profit Percentage (GPP) that you want to hit.

We’ll be posting about GPP at a later date, but you should be aiming for a GPP of around 60% – 70% – that is the percentage of profit that you’re making from each menu item.

### How to use the Menu Price Calculator

1. Enter the recipe for each dish. For you reference you might want to include the supplier and relevant product codes for each recipe item.
2. Cost each individual item. For our main suppliers Bidfood and Brakes we tend to get up-to-date prices using Bidfood Direct and Brakes Online. Or you can pull prices from recent invoices. As a last resort you can use a supermarket price website like mySupermarket to get a price in.
• Don’t get in the bad habit of ignoring ingredients ‘because they’re hardly anything’. Even a nominal cost for a dash of salt or splash of oil helps get into the spirit of full cost control.
• You’ll probably need to do a bit of maths to convert pack prices into the unit price of each dish. Sometimes it’s a bit confusing what a ‘pack price’ is, so if you’re not sure, it often helps to sense check your supplier prices with consumer prices at mySupermarket.
• Whilst you’re doing this, use the opportunity to check some of your supplier prices! Are you getting good value? If in doubt, price check against open sources (again a consumer price is not a bad start) and then go back to your suppliers to make sure you’re getting decent value for money.
• Generally you should use net prices (excluding VAT) for this calculation. That’s because we assume you’ll be claiming the tax of your purchases back.
3. Once you’ve costed each recipe item, you’ll get an overall price for the dish. This is where you experiment with some menu prices to get the GPP you’re looking to achieve. For example, in our burger dish, we might have put a starting price of £5 to see what GPP it yields. Given the cost of the dish is £2.03, that only yields a GPP of 51%, so we’ve gone higher to £6.75, which is achieving a more palatable 64%.
• Don’t forget to check the tax-rate for that menu item. In our bakery we tend to to sell most of our items in-store and so we price using an assumed standard VAT rate (currently 20%). This calculator will take the tax off your menu price (as it will be going to the Exchequer) and although the prices your print on your menus will be the gross price (including VAT), your GPP based on the net menu price (excluding VAT).
2017-06-27T16:08:38+00:00 May 30th, 2017|Financial Performance|0 Comments