The most common way to set a menu price is to start from the plate cost and the food cost percentage you want to hit.
The formula
Menu price = plate cost ÷ target food cost %
Example (made-up numbers)
Plate cost $4.20, target 30%. Price = 4.20 ÷ 0.30 = $14.00.Pick a target that fits your concept
There is no single right target. It depends on your concept, your prices, labor and rent. Use your own past numbers: if your period food cost has been around a level you are profitable at, that is a reasonable starting target.
Check the dollars, not only the percentage
Percentages can mislead. A steak at a higher food cost % can still leave more money per plate than a cheap pasta.
Contribution margin = menu price − plate cost
Example (made-up numbers)
Pasta: price $16, plate cost $3.20, food cost 20%, margin $12.80. Steak: price $38, plate cost $13.30, food cost 35%, margin $24.70.Round to a price that reads well
Round the result to a price that fits the rest of your menu, then recalculate the real food cost % at that price.
Revisit when costs change
When ingredient prices rise, either the food cost % goes up or the price has to. Keep an eye on supplier price changes so you can decide early. Try the menu price calculator.