SaucebookHow to price a menu
How to price a menu in three moves: find each dish's portion cost, apply a target food cost or a menu price markup, then sanity-check the result against your market. Here's the method with a worked example.
Step 1: find the portion cost
Portion cost is what the ingredients on one plate cost you, including the sides, the butter, the garnish and a share of the cooking oil. It's the foundation of every price on the menu. If you haven't worked it out before, our guide on how to cost a recipe walks through it line by line, or paste the recipe into the calculator.
Step 2: apply a target or a markup
There are two common ways to turn a portion cost into a price, and they're two sides of the same coin.
- Target food cost percentage. Menu price = portion cost ÷ target. At a 30% target, a $3.00 plate becomes $10.00. Read more about food cost percentage.
- Menu price markup. Menu price = portion cost × markup. A 3x markup on a $3.00 plate is $9.00, which is a 33% food cost.
A 3x markup is a common starting point. Dishes that take a lot of hands-on work, or that you can't make ahead, often deserve more.
Worked example: the breakfast plate at Saucy's Bistro
Saucy's Bistro is the sample restaurant we use for examples. Ana, who runs the kitchen, is pricing a new two-egg breakfast plate. Here's the portion cost with example prices.
| Ingredient | Amount used | Example price paid | Cost |
|---|---|---|---|
| Eggs | 2 large | $3.60 a dozen | $0.60 |
| Bacon | 3 strips (3 oz) | $6.40 per lb | $1.20 |
| Hash browns | 5 oz | $1.92 per lb, frozen | $0.60 |
| Toast | 2 slices | $3.60 per 24-slice loaf | $0.30 |
| Butter and jam | 1 tbsp + 1 packet | about $0.25 per order | $0.25 |
| Cooking oil | share per order | $0.05 per order | $0.05 |
| Portion cost | $3.00 | ||
The portion cost is $3.00. At a 30% food cost, the price would be $3.00 ÷ 0.30 = $10.00. With a 3x markup, it would be $9.00. Ana lands on $9.99: inside both numbers, an easy price to read, and in line with the other breakfast plates in the neighborhood.
Step 3: round and sanity-check
- Round to a menu-friendly price. $9.99 or $10 reads better than $9.47.
- Check the market. If similar plates nearby sell for $8, a $12 price needs a reason guests can see.
- Look at the whole menu. Menu engineering means balancing popular low-margin dishes with high-margin ones, not making every plate hit the same number.
Keep prices current
Prices drift because ingredient costs drift. Re-cost your best sellers when eggs, beef or dairy move, and review the full menu a couple of times a year. Saucebook keeps your recipes and prices together so a single price change shows you every dish it touches.
Free menu pricing calculator. No signup, and your recipe never leaves your phone.
Menu pricing questions
How do you price a menu item?
Find the portion cost (what the ingredients on one plate cost), then divide by your target food cost percentage or multiply by a markup. Round to a menu-friendly price and check it against what nearby places charge.
What is a typical menu price markup?
A markup of about 3 times the portion cost is a common starting point, which works out to roughly a 33% food cost. Many restaurants use 3 to 4 times depending on labor and overhead.
What is the difference between markup and food cost percentage?
Markup multiplies the cost to get a price (3x). Food cost percentage divides cost by price (33%). They describe the same relationship from opposite sides.
How often should I update menu prices?
Re-cost your top sellers whenever a main ingredient moves, and review the whole menu at least twice a year. The menu pricing calculator makes each re-cost quick.