Potential Cost

Often you will hear your Financial controller discuss about Potential cost of your menu.

Potential cost is one of the pillars of good food cost control.

Potential cost is nothing but theoretical cost of the menu. What it means is that if your menu sold so many dishes, your food cost should have been a particular number.

How does it help?

Calculating potential cost helps you to see if there is wastage or pilferage of items from kitchen.

You can see what dishes you need to focus on selling to ensure you maintain the target food cost.

While using the calculator below, play with the quantity sold and it will tell you what you can focus on selling to keep you food cost in check

All fields are required, however if you want to calculate for cost for less dishes, leave the rest empty.

Once you know your potential cost for the month, check what is the variance to your actual food cost.

If there is a huge variance, investigate the reason and fix it.

If you need a calculator for upto 50 dishes, consider purchasing an excel version of the calculator and save on your computer. It is available for a one time cost of Rs. 500.

If you don’t wish to purchase the file, remember to bookmark the page and visit often. By calculating this monthly, and taking action to control waste, I am sure you will be able to keep your food cost in line.