Most small restaurants and cafes set menu prices by feel: what the competitor charges, or what the owner thinks customers will pay. The problem is that a dish can sell well and still lose money. The fix is simple arithmetic, but doing it by hand for every dish, every time a supplier changes a price, is where most owners give up.
This article walks through the method. At the end, I link to a spreadsheet that does the calculations for you.
Step 1: Build an ingredient list with real purchase prices
Start with every raw ingredient you buy. For each one, record the unit you buy in (a kilo, a litre, a carton of 30 eggs), the price you paid for that unit, and the waste you lose in prep: trimmings, peel, spoilage. Convert everything to a cost per gram or per millilitre. Once each ingredient has a cost per base unit, every recipe can use it.
Step 2: Write a recipe card for each dish
For each dish, list the ingredients and the quantity used for one portion. Multiply each quantity by its cost per unit, then add the waste allowance. The sum is your food cost per portion.
A useful habit is to write quantities per plate, not per batch. That way the numbers match what actually leaves the kitchen.
Step 3: Set the price from a target food cost
Food cost percentage is food cost per portion divided by the selling price. Many operators work backward from a target percentage. If your target is 30% and a dish costs 45 EGP in ingredients, the suggested price is 45 divided by 0.30, which is 150 EGP.
The right target depends on your concept, rent, and labour costs, so choose yours deliberately rather than copying someone else's number.
Step 4: Look at the whole menu, not one dish
Price alone does not tell you what to change. Plot each dish by popularity (how often it sells) and profitability (margin per plate). That gives four groups:
- Stars: popular and profitable. Protect them.
- Workhorses: popular but thin margin. Try a small price change or a cheaper ingredient swap.
- Puzzles: profitable but rarely ordered. Improve the description or its placement on the menu.
- Dogs: neither popular nor profitable. Consider removing them.
This is the menu engineering matrix. It turns a list of numbers into decisions.
Step 5: Re-check when costs move
Supplier prices change, and a recipe that worked last quarter can quietly lose money. Re-run the numbers whenever you receive new invoices.
The spreadsheet
If you would rather not wire up the formulas yourself, I built an Arabic Excel workbook that follows these steps. It has five sheets: an ingredient list with purchase units and prices, recipe cards with waste percentages, menu pricing against a target food cost, a menu engineering matrix with a recommendation for each dish, and a step-by-step how-to page.
It has no macros. Input cells are colour-coded, and formulas are protected against accidental overwrites. The protection has no password, so you can unprotect a sheet from the Review tab if you need to change a formula. The example names and prices are fictional; you replace them with your own.
It costs 99 EGP one-time for buyers in Egypt, paid by InstaPay, or $5 through Gumroad for buyers outside Egypt. Details and a preview are on the product page: https://sites.alfhardevelopment.com/recipe-sheet/
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