Price every dish like the margin depends on it.

Food cost percentage is the share of a dish's selling price, before GST, that you spent on the ingredients. A $14.00 plate with $4.20 of ingredients on it runs 30%. It is the one number that connects your kitchen to your bank account, and in a trade where margins are thin, it decides who is still open in two years.

The bands most of the industry works to, as published by the hospitality platform Loaded: cafes and quick-service venues typically run 28 to 35%, pubs and casual restaurants 25 to 30%, and fine dining 18 to 24%. Fine dining runs leaner on ingredients because so much more of the price pays for labour and the room. Your venue's right number sits somewhere in its band, set by your rent, your wages, and what your local market bears. Treat 30% as a working default, not gospel.

The discipline is per dish, not per menu. A menu can average 30% while three popular dishes quietly run 45% and drag the whole business under. Cost every dish that sells in volume, and re-cost it every time a supplier price moves.

Here is the mistake that quietly wrecks hospitality pricing in New Zealand. Your menu says $16.10 because menu prices include 15% GST. But $2.10 of that is not your money. It is GST you are collecting for Inland Revenue. Your actual revenue on the dish is $14.00.

Cost the dish against the $16.10 and everything looks rosier than it is. That $4.20 of ingredients reads as a 26% food cost instead of its true 30%. Roughly 4 points of margin that do not exist, on every dish, all day. Plenty of venues have priced a whole menu this way and spent a year wondering where the money went.

The fix is one habit: divide the menu price by 1.15 before you do anything else with it. This calculator does it automatically in both modes, and our GST calculator handles the general case. Going the other way, price the dish ex GST first, then multiply by 1.15 for the menu, and round to something a human would pay.

Your food cost on paper and your food cost in the till are different numbers, and the gap has two names. Portion creep is the chef being generous: an extra 20 grams of protein here, a heavier hand with the cheese there. Nobody decides to do it. It accumulates, dish by dish, until the 30% you priced runs at 34% in real life and nobody can say why.

Waste is the rest: trim that could have been stock, prep that did not sell, the delivery that sat out too long, the special nobody ordered. None of it appears on a menu costing, all of it appears in your supplier bills.

You do not fix either with a spreadsheet alone. Portion creep is fixed with scales, standard recipes, and the occasional spot check on a plated dish. Waste is fixed by counting it: a week of writing down everything that goes in the bin usually pays for itself immediately. Then re-run your dishes through the check mode above with honest serve costs, and see what your menu is really doing.

When a dish comes back over target you have two levers, and the right one depends on the dish. Raise the price when the dish is popular and distinctive, when people come to you for it. Loyal demand absorbs a fair increase far better than owners expect, especially moved with the menu reprint rather than apologised for. A dollar on a hero dish is pure margin.

Re-engineer when the dish is ordinary or the price is already at the ceiling for your area. Swap the expensive protein for a braised cut that eats better anyway. Trim the garnish nobody notices. Shrink the portion of the costly component and grow the cheap one. Cross-use ingredients so one prep feeds three dishes and nothing dies in the coolroom. Often two small changes claw back 5 points without a single complaint.

And sometimes the answer is neither: a dish that cannot be repriced or rebuilt into its band earns its way off the menu. Every plate of it you sell is paying you less than the dish that could replace it. If bookings and walk-ins are the real problem rather than margins, that is usually a visibility issue, and we wrote a plain read on why a business gets traffic but no enquiries that applies to hospitality more than most owners think.

Food cost is half the survival equation. The other half is labour, and the two only make sense together. The combined figure is called prime cost: food and beverage cost plus total labour cost, as a share of revenue. The commonly used target for a full-service venue, again per Loaded's published guidance, is 60 to 65%. A venue running 32% food and 30% labour is at 62% and breathing; at 70% combined, the remaining 30 cents in every dollar has to cover rent, power, insurance and profit, and it usually cannot.

The two trade off against each other. A menu full of house-made everything runs a lower food cost and a higher labour cost; a menu leaning on prepped product runs the reverse. Neither is wrong. What kills venues is not knowing which trade they have made.

We have not built a hospitality labour cost tool yet, so we will not pretend otherwise. But if you are weighing up putting another person on, our cost of hiring calculator shows what an employee really costs beyond the wage, which is the number your prime cost actually moves by.