how do restaurants calculate the prices of each dish? Do they accurately do it or just a rough estimate?
In: Economics
Add the cost of all the ingredients and set a price based on the margin that you need to turn a profit. Not a hard and fast rule, but your labor and food costs should be a combined 60% of your revenues. Foods that are made from raw ingredients take more time to process than a bag of fries that you dump into a fryer. If you build a “product mix” of what you anticipate selling(based on historical data), you can accurately predict what your margins should be come the end of the month. New restaurant owners with no experience and that don’t cost out their menu are commonly referred to as “former restaurant owners”.
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