Save 5 or 6 hours a week with an automated inventory. Learn more trending_flat

Calculating Food Costs for Smaller Operations

August 12, 2020 by FoodBAM Admin

A recipe calculator is a tool that can be used to help you begin calculating food costs of each recipe to find out the ratio of the cost of ingredients you use to prepare a dish and the revenue you receive from selling the dish. To calculate food costs, you need to know the cost of your ingredients, along with how much of each ingredient is used in your dish.

For smaller operators like at home bakers, caterers or even food truck owners, this is an essential step in maximizing ingredients and making a profit.

Home Bakers

Are you a baker who needs to calculate food costs and is unsure of your actual profits? Did you know that there are several factors that need to be looked at regularly when it comes to food costs?

From setting price points to the potential of eliminating a product altogether, food costs and how and when you calculate them play a major role in your overall profitability. Not only does the actual cost of ingredients factor in, but so does labor and waste. Always re-evaluate on a schedule and be willing to adjust when necessary to determine what works best for your operation.

This free recipe costing calculator for home bakers and cake decorators is a great tool to help you determine your food costs and price your recipes more accurately.


Being a caterer, you know that calculating food costs per serving is an important value for your business.

Caterers must calculate the quantity of dishes to avoid running out of food at an event. Caterers can choose their pricing strategies from either a fixed pricing with set prices per plate or tiered pricing per-plate based on the number of guests. A good place to start is by calculating your food cost percentage (FCP).

This catering calculator can help you calculate food costs percentage, gross margin and markup in seconds.

Formula for Calculating food cost percentage - ingredient cost divided by price you sell dish for

Timing, event size, add-ons, supply rentals, and level of service can all impact the cost of catering. A catering company must also take into consideration covering staffing, time spent preparing the food and business overhead.

Food Trucks

Calculating food costs when you own a food truck can be tough because food trucks have many operational costs – and food costs are not as low as you think they would be.

There are two types of costs that are involved in the production of food truck foods. There are direct costs, which are costs that are linked directly to the food itself like ingredients, serving sizes, and foods that are wasted or thrown away throughout the cooking process, and indirect costs that do not include the costs of ingredients, instead include your food truck’s service that add perceived value or quality.

Indirect costs could include the labor that is associated with preparing menu items when items may require higher levels of effort, artistry or talent.

This free recipe costing calculator can help you find what makes up 100% of your recipes costs.

Industry Tools and Resources

For larger operators, calculating food costs is the most helpful restaurant metric you’ll ever calculate. But as a chef, you know it can be a long and extra confusing process.

It’s vital that a restaurant chef understand the fundamentals of calculating food costs so you can make smart decisions in the back of the house, avoid waste, and remain profitable.

Dining Alliance has tools and insights for independent restaurant operators to succeed in calculating food costs.

Back To Blog

Customer Stories

“Best software I’ve seen in the industry, I’m looking forward to growing with you”


CEO at City Greens, New Orleans, LA


“It used to take me hours to do my ordering, now I have it down to 15 mins thanks to FoodBAM!”

Richard Dennis

Chef/Owner at Stars on Hingham Harbor in Hingham, MA

You are in good company

Ready to try FoodBAM?

Easy to set up. Cancel any time.