Get Control of One Number and Transform Your Business
"What gets measures gets managed." — Peter Drucker
Introduction:
When you don't know where to start to change your business, start with one number. Pricing by feel works until your numbers do not. Food Cost Percentage (FCP) shows how much of your food sales go to Cost of Goods Sold (COGS). When you track FCP, you stop guessing and you see exactly where portions, prices, or purchasing need a fix.
Get Control of One Number and Transform Your Business: You Have to Start Somewhere, So Start with Food Cost Percentage
You run a small catering business. Your products are gorgeous and delicious. You have wonderful reviews. On the surface, it looks like a thriving business. But under the hood, the numbers tell a different story. Every month is an exercise in stress as you chase sales to cover bills and never seem to have enough to pay yourself.
Something has to give.
One Change at a Time
If you aren't paying attention to your numbers, odds are you are leaking money from multiple places. You can't fix everything at once, but you can fix one thing at a time. So let's start with that and reduce the overwhelm. Your fix will start with one number: Food Cost Percentage.
What is Food Cost Percentage?
Food Cost Percentage (FCP) is the share of your food sales that you spend on Cost of Goods Sold (COGS)—the ingredient cost used for a menu item or during a time period. You calculate it as:
Per item:
FCP = portion (ingredient) cost ÷ selling price × 100For a period (e.g., last month):
FCP = total COGS ÷ total food sales × 100
Quick example: If a board costs you $4.00 in ingredients and you sell it for $12.50, FCP = 4.00 ÷ 12.50 × 100 = 32%. If last month your total COGS were $2,000 and food sales were $6,500, FCP = 2,000 ÷ 6,500 × 100 = 30.8%.
Why it matters: The higher your FCP is, the less you are earning off of the price. Aim for roughly 28–35% as a healthy range if you don't know where to start, but the “right” number depends on your concept and costs. Use it as a benchmark, then set your own target.
Actual Versus Target
When you price items on your menu, you are using a target FCP to help set your price. That is only part of the picture. You also need to calculate it after the event with the actuals to determine if your actual and target percentages are the same.
For example, we know that our item costs $4.00 in COGS to make the final product. We then sell that item for $12.50 for a 32% FCP. However, when we look at the actual numbers, we find that we spent $2,000 on COGS for that item and we sold $6,500 of them. Our actual FCP is 30.8%. That means that we actually spent LESS than we expected on COGS and kept an additional $.15 in profit. Chances are though, especially if you aren't paying attention, after the event you are likely to find that your FCP is higher than your target.
Either way, you are off target, and you need to understand why. Even if you are happily surprised to find out that your FCP is lower than expected, you should find out why, otherwise you aren't really managing your business.
Controlling FCP
When your numbers are meeting their targets, things become more predictable.
The most common ways that FCP can be controlled are:
Standardize portion sizes. Weigh for consistency or use standard measuring tricks such as ladles or scoops that hold the exact portion.
Validate unit costs. Costs vary from suppliers and if you are still calculating your prices based on outdated costs, you need to fix that.
Account for waste. If you scale a recipe, you will get the exact quantities that you need. But what about the eggs that you dropped or the leafy greens that couldn't be used? Log your waste for each order to see how much of what you are buying is being wasted.
How Can Seize Your Day Help?
That’s where Seize Your Menu comes in. It’s built for small food businesses like yours — people who love making amazing food but don’t want to get buried in spreadsheets or complicated math. Our CaterCalc Lite software helps you track every cost, including labor and overhead, so you can set prices that actually pay you what you deserve.
Yes, there is setup involved to get you going, but once you are there, you will simply love the insight you have available into automatically pricing correctly. We will walk you through getting one of my family's favorite salsa recipes into CaterCalc Lite and then we have a 30-Day Success Track to get you fully functional without overwhelming you. We even help you get a monthly planning rhythm going so that you are always ready to update your menu with seasonal specials to take advantage of changing seasons and holidays to boost your sales and leave the slow months behind.
And the best part? This is a one-time purchase — no subscriptions, no monthly fees. You get lifetime access to a tool that grows with your business and helps you make smarter pricing decisions every day.
Ready to ditch the 3X guesswork and start pricing with confidence?
Check out our options today and take control of your profits!
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