Pricing for restaurants: how to calculate the selling price of your dishes

[shukla7789]

Since the beginning of 2022, we have noticed that high inflation has caused significant increases in product prices, affecting both consumers and retailers. This situation has required adjustments in sales prices to avoid financial losses, especially in sectors such as restaurants and cafes, due to the intense competition and the need to preserve the financial health of their business.

Without adapting their prices to the current market, many restaurants run the risk of losses. According to Abrasel, approximately 80% of establishments close their doors in less than two years due to a lack of financial planning.

To deal with this situation in a healthy way and generate more profit, continue reading to understand how to adopt pricing strategies for restaurants and improve your financial management.

Index
Why is it important to price your product correctly?
Centralize and automate your delivery service, managing all cambodia whatsapp number database orders with Cardápio Web
Discover the pricing table for restaurants
How to price your restaurant's dishes?
Tips for pricing dishes well
Know your customer's needs
Identify the most ordered dishes
Difference between price and value
Calculate the purchase cost per unit
Account for expenses
Define and respect your profit margin
Conclusion
Why is it important to price your product correctly?
Setting a price is not just about assigning a monetary value, but a strategic process that directly influences your restaurant's profit, market demand, the customer's perception of value and the success of your business.

Inadequate pricing can have serious consequences for your business. If your price is too high, it can drive away your customers, reduce demand and compromise your company’s competitiveness in the market. On the other hand, if it is too low, it can result in profit margins that are insufficient to sustain your business, damaging your financial health in the long term.

Centralize and automate your delivery service, managing all your orders with Cardápio Web
Test for 10 days

Name
Name
Enterprise
Enterprise
E-mail
E-mail
Telephone
Telephone
Monthly billing

I don't know
Number of orders per day

I have no orders yet
Furthermore, incorrect pricing for restaurants can affect your customer’s perception of value. A price that is too low can lead consumers to question the quality of the product, while a price that is too high can lead to customers abandoning their purchase or being dissatisfied with the product. Therefore, finding the right balance is the best way to maintain customer trust and ensure their satisfaction.

In short, correct pricing can ensure the financial health of your business and maintain customer satisfaction. It is a process that requires an analysis of the food market, production costs, competition and customer preferences.

Therefore, it is an area where we must invest time and resources to ensure long-term success. The best way to carry out good pricing for restaurants is through the pricing table and the use of technical sheets. Continue reading and learn how to calculate the prices of your dishes.

Discover the pricing table for restaurants

Pricing table. (Image: Hashtag)
A restaurant pricing table is the ideal way to organize your establishment's menu, recording food costs and helping to define sales prices.

Finding the cost of each item can be confusing, but using a pricing spreadsheet can help you avoid unnecessary expenses, such as buying food that you won't use.

Furthermore, the pricing table adapted to the use of technical sheets in your restaurant also allows a better view of the costs involved in the production of each dish, helping in the search for better pricing and efficiency.


Web menu system technical sheet (Image: Archive)
How to price your restaurant's dishes?
Determining the selling price for a restaurant requires consideration of costs, from ingredients to operating expenses.

The best way to perform the calculation is to use a formula together with the markup, an index applied to the cost of a product to determine the sales price, and integrate it into the restaurant's pricing spreadsheet.

To calculate the markup, it will be necessary to take into account the following variables: the desired profit margin (M) and fixed and variable expenses (D).

Markup = 100/ 100 – (profit margin + fixed expenses + variable expenses)

Costs refer to expenses with suppliers, while expenses include employee salaries, electricity and water bills, among others. Profit is the projected return after covering all costs and expenses. Don't forget that any surplus from this amount can be set aside for emergencies or investments in the business. Understand the following example:

To determine the selling price of a can of soda, you need to take into account the following factors:

Unit sale price: 100%
Fixed expenses: 18% on sales
Variable expenses: 25% of the sale
Profit margin: 15%
Cost of the can: R$ 2
First, subtract the sum of fixed expenses + variable expenses + profit margin from 100.

100 – (18 + 25 + 15)

(100 – 58) = 42

Then divide 100 by the value obtained.

100/42

= 2.38

Finally, the selling price per unit (PVU) is obtained by multiplying the value obtained by the production cost, therefore:

PVU = Cost x Markup

PVU = 2 x 2.38

PVU = R$ 4.76 (each can)

This unit sales price value takes into account the costs of the commercial establishment, including the desired profit margin.

Fixed Costs
Recurring expenses that contribute to the restaurant's monthly expenses. Examples include internet, electricity, rent, and monthly management software fees.

Variable Expenses
Expenses that can vary and impact the restaurant's profit on a monthly basis.

Examples are equipment repair costs and credit card fees.

Production Cost
Consider all the ingredients needed to prepare each dish.

Each ingredient, no matter how small, represents a production cost. Don't forget that this is an important factor in determining the selling price of each item on the menu.

It is a mistake to consider only the cost of the dishes when calculating the “ideal” price. All of these factors must be weighed against the desired 100% profit. This demonstrates why it is unlikely to make exactly the amount you spend, since there are other factors to consider in the pricing equation.

Tips for pricing dishes well


In addition to carrying out the calculations mentioned above, there are also other factors that must be taken into consideration to achieve the ideal pricing for your dishes.

Follow the steps below to decide on prices and ensure the profitability of your establishment:

Know your customer's needs
Always try to understand your customers' profile. Prices should be in line with the financial capacity of your target audience. Otherwise, you may lose customers and damage your establishment's reputation. Stay within the price range expected by consumers to ensure your restaurant's competitiveness. Sometimes, reducing costs is more advantageous than increasing the prices of dishes.

Identify the most ordered dishes
Analyze your menu to identify the most popular and least popular dishes. This will help you manage inventory and make decisions about which ingredients to prioritize. Increasing the profit margin on your most popular dishes can quickly and effectively boost your business’ profitability.