Most restaurant owners know their daily sales. Far fewer know their food cost percentage, and it is the number that tells you whether a busy restaurant is actually making money. A full room with a high food cost can earn less than a quiet room with a low one.
How to calculate it
Food cost percentage is what you spend on ingredients divided by what you earn from selling them. For a single dish: add up the cost of every ingredient on the plate, divide by the menu price, and multiply by 100. A plate that costs IQD 3,000 in ingredients and sells for IQD 10,000 has a food cost of 30%.
For the whole restaurant, take your opening stock plus purchases during the period, subtract your closing stock, and divide by your food sales for the same period. Do this monthly at minimum. You need a stock count at the start and end, even a rough one.
What range should you aim for?
As a common rule of thumb, many restaurants aim for roughly 28% to 35% food cost, but it depends on your menu. Grilled meat and seafood run higher. Rice, bread, soup and drinks run lower. Coffee and tea can have very low ingredient cost, which is why they are so important to your margin.
Three fixes that move the number fastest
- Cost your top ten sellers precisely. Your best sellers decide your result, so weigh the portions and write down the real cost of each plate.
- Fix portion drift. If the kitchen serves 220 g when the recipe says 180 g, you are giving away margin on every order. Use scoops and scales.
- Reprice the dishes that sell well but earn little. Raising a popular dish by IQD 500 to 1,000 is usually less noticeable than guests expect.
Where TU2 fits
TU2 Business (IQD 10,000 a month) shows your sales, profit and margin dashboard, plus top-selling items, so you can see which dishes carry the restaurant. Pair that with a monthly stock count and you have the full picture.