Potential Food Cost (What You Should Spend)
Potential food cost represents the food cost percentage your business should achieve when recipes are followed accurately, portions are consistent, and waste is kept to a minimum. Unlike actual food cost, which reflects what happened in reality, potential food cost provides a benchmark for expected performance based on recipe costs and sales data.
Formula:
Food Cost % = Total Cost × 100 ÷ Total Sales
How it works:
- Calculate the cost of each menu item using your recipes.
- Multiply each dish cost by the number sold to determine total food cost.
- Calculate total sales revenue for the same period.
- Divide total food cost by total sales and multiply by 100 to get your potential food cost percentage.
Comparing your potential food cost with your actual food cost can help uncover issues such as waste, over-portioning, stock losses, or recipe inconsistencies. The closer the two figures are, the more efficiently your operation is running.