Running a café or small restaurant in Sri Lanka can feel busy and profitable, yet many owners find there is little left at the end of the month. One of the most common reasons is not knowing the real cost of each dish. When ingredient prices rise, and they often do, menu prices fall behind and the profit quietly disappears.
This guide shows how to calculate the cost of every dish, set the right selling price, and check your food cost every month, with worked examples in rupees.
Food cost percentage is the share of your selling price that goes on ingredients.
Food cost % = Ingredient cost of a dish ÷ Selling price × 100
If a dish costs Rs. 300 in ingredients and sells for Rs. 1,000, your food cost is 30%. The remaining 70% has to cover staff, rent, gas, electricity and everything else, and still leave a profit.
As a common rule of thumb, many restaurants aim for food cost of roughly 25–35%, depending on the type of food. Use this as a starting point, then find the level that works for your own overheads.
List every ingredient in one portion and its cost. Here is an illustrative example for one portion of chicken kottu. Replace the figures with your own prices.
| Ingredient (one portion) | Cost |
|---|---|
| Godamba roti (2 pieces) | Rs. 70 |
| Chicken (100 g at Rs. 1,400 per kg) | Rs. 140 |
| Egg (1) | Rs. 45 |
| Vegetables (leeks, carrot, cabbage, onion) | Rs. 40 |
| Curry gravy | Rs. 30 |
| Oil, spices and sauce | Rs. 25 |
| Total ingredient cost | Rs. 350 |
If this kottu sells for Rs. 1,000, the food cost is Rs. 350 ÷ Rs. 1,000 = 35%.
Tip: cost meat and vegetables by the weight you actually use after cleaning and trimming, not the weight you buy. Bones, skin and peel are part of the cost.
Selling price = Ingredient cost ÷ Target food cost %
If you want a 30% food cost on the kottu: Rs. 350 ÷ 0.30 = Rs. 1,166.67. Round up to a menu price such as Rs. 1,200, which gives a food cost of about 29.2%.
Drinks often have a lower food cost than meals, which helps your overall figure. For example, an illustrative cup of milk tea using tea leaves (Rs. 5), 20 g of milk powder (Rs. 50), sugar (Rs. 8) and gas (Rs. 4) costs Rs. 67. Sold at Rs. 200, that is a 33.5% food cost.
Recipe costing tells you what each dish should cost. A monthly check tells you what you actually spent, including wastage, over-portioning and missing stock.
Food used = Opening stock + Purchases − Closing stock
| Item (illustrative month) | Amount |
|---|---|
| Opening stock (start of month) | Rs. 120,000 |
| Purchases during the month | Rs. 480,000 |
| Closing stock (end of month) | (Rs. 100,000) |
| Food used | Rs. 500,000 |
| Food sales for the month | Rs. 1,400,000 |
| Actual food cost % | 35.7% |
If your recipes were priced for 30%, food used should have been around Rs. 420,000. The gap of Rs. 80,000 is money lost to wastage, large portions, unrecorded staff meals or missing stock. That gap is what you need to find and close.
A good food cost does not guarantee a profit if rent, salaries and gas are too high for your sales. That is why you also need to see profit after overheads. Our guide to calculating daily profit shows how, and our pricing guide explains margin in more detail.
VeeraOne records every sale, shows your top-selling items, and gives you daily and monthly profit & loss that includes overheads, so you can see whether your menu prices are really working. See VeeraOne for cafés.
A common rule of thumb is roughly 25–35%, depending on what you serve. Check that your overall figure leaves enough to cover staff, rent and utilities with a profit left over.
Whenever a main ingredient changes price, and at least every three months for the full menu.
Usually not. Food cost covers ingredients only. Gas, electricity, rent and staff are overheads and belong in your profit and loss.
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