Menu Pricing 101: Price for Profit, Not Just Cost
Most restaurants price their menu around food cost percentage alone, and it quietly costs them money. In this article, cost analyst Mohamed Amin explains why that single number can be misleading, and how to price each dish so it actually contributes to profit.
Why Food Cost Percentage Isn't Enough
Food cost percentage only looks at ingredients, but a plate has to carry far more than that. Two dishes can share the same food cost percentage while one earns you real money and the other barely breaks even once you account for prep labor, waste, and the overhead of simply keeping the doors open. Percentage alone hides how many actual dollars each dish drops into your pocket.
How to Price a Dish for Profit
Instead of pricing off percentage, start from the profit you want each dish to make. Add up the true plate cost, including ingredients, prep labor, and a share of your fixed overhead, then set the price so the dish clears the dollar profit you're targeting. Reviewing your menu this way usually reveals a few quiet winners worth promoting and a few hidden losers worth repricing or removing.
