# How do restaurants make gross profits

## Calculation in gastronomy - so easy

As part of your work in the hotel or catering industry or as a self-employed entrepreneur, you face many challenges. Among other things, the costs for food and drinks must be calculated so that your company can position itself successfully in the market. Calculating in the catering industry can be easy - we'll show you how.

It is of interest to make profits instead of losses! Now would you like to know what you have to pay attention to when calculating your food and beverages in gastronomy? The Cordes and Rieger team will show you how to correctly calculate the prices for your catering products.

FACT No. 1

Do not go to your competitors and copy their prices (flashlight calculation). This can mean that your business evaluation turns out negative and you are in the red. Even though your products are good and would sell well. Your costs are not safely covered. Also the 30/30/30 rule of thumb - 30% cost of goods, 30% personnel costs and 30% other costs - which every entrepreneur in the hotel and catering sector has probably heard of before is too general and imprecise as a method.

FACT No. 2
Stay away from the 30/30/30 method. Take your time and deal carefully with your cost calculation.

1. Cost of goods: A recipe management with current purchase prices is the basis of a calculation in gastronomy. First you break down the dishes into their individual components. Furthermore, you determine the required quantities and then include the net price of the products used in the table. Notice: Think of the loss of cleaning, parrying and frying of vegetables, meat, etc.! With the help of a table, the cost of goods can then be determined without spending a lot of time.

1. Cost: In the next step you concentrate on determining your own costs. Use the following pricing procedure for this:

First of all, packaging and freight costs are added to the individual material costs. The material costs arise. The wage costs for the creation of the court as well as the production overheads (energy costs etc.) are added to these. This results in the production costs (= production costs). In addition, the surcharges for administration and sales will be added proportionally. The end result corresponds to the cost of ownership.

1. Gross sales price (price on the card)

First, add the desired profit per item to the cost price. Then add the service charge (this does not apply if the staff in the service department in the hotel or restaurant business is paid fixed, as it is used to cover the staff costs of the service staff). You will receive the net sales price. In addition to the applicable VAT, this results in your gross sales price.
After the calculation has been carried out, you will receive a large number of "crooked" prices. Our sample calculation results in EUR 28.79 for the dish. Now you can sound out whether the price should be € 29, € 32 or, better, € 28. You carry out these steps for all calculated articles.

FACT No. 3
Please always remember: Every product must have a sufficient contribution margin (gross profit).

Do not hope for compensatory effects by selling some dishes too cheaply. Don't bet on making the losses with other, better-priced dishes. Your goal must be to make money with every item, not to lose it.

###### CONCLUSION Costs noted + Prices calculated = sold for a profit

This is how easy it is to calculate in gastronomy.