Do you know exactly what it costs you to make each of your pizzas? If not, your price structure may not be as ideal as it should be. You can’t begin to calculate your food costs without understanding your ingredient costs.
So the first step is to write down all the ingredients used in a given pizza (or other food product). Next, look at your invoice to see what you are paying for each of the ingredients. Determine the number of ounces in each order so that you can ascertain the price per ounce that you pay for each ingredient.
Once you have that, you’re ready to go.
Begin by weighing your ingredients as you make your pizza and recording the number of ounces you use for each ingredient (dough, sauce, cheese, meat and veggie toppings).
Now, take the number of ounces for each ingredient and multiply that by the ingredient’s respective cost per ounce. For example, if your sauce costs 10 cents per ounce (a purely hypothetical example using round numbers to make the math simple) and you use 7 ounces of sauce on the pizza you are pricing, that means you put 70 cents worth of sauce onto that pizza.
Repeat this method for all ingredients, then add the numbers together for your grand total. Don’t forget to add the price of your boxes if you offer carryout or delivery!
Once you know precisely what each menu item costs you to make, you’re now armed to adjust your prices to maximize profits and keep food costs percentages in check.