Stop Guessing Your Prices: A Simple Food Costing Template for Caterers and Start-Ups

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When I started my catering business, I knew how to cook — but I did not yet know how to cost my food properly.

Like many new food business owners, I was making up prices as I went along. I would estimate what the ingredients cost, choose a figure that seemed reasonable, and hope there was enough left over to make the job worthwhile.

There usually wasn’t.

It was only when I began completing proper ingredient costings and applying realistic markups that I realised how severely I had been undercharging.

The food may have looked profitable on paper, but I had not properly accounted for packaging, fuel, electricity, preparation time, shopping, transport, cleaning or the hours spent communicating with clients.

I now see the same pattern with many culinary students, young graduates and first-time food entrepreneurs.

They calculate the cost of the main ingredients, add a small amount, and assume the difference is profit. In reality, they are often paying for part of the order out of their own pockets.

That is why I created this simple food costing spreadsheet: to help beginners understand exactly what each ingredient costs in a recipe before deciding what to charge.

Why Proper Food Costing Matters

A busy food business is not necessarily a profitable food business.

You can receive plenty of orders, work long hours and still lose money if your prices do not cover the true cost of producing the food.

Proper costing helps you:

• understand what each recipe costs to make;

• identify expensive ingredients;

• calculate a realistic selling price;

• price portions consistently;

• prepare more accurate quotations;

• protect your profit margin; and

• make informed decisions when supplier prices change.

Costing also gives you confidence. Instead of apologising for your price or choosing a random figure, you can explain that your quotation reflects the ingredients, labour, service and resources required to complete the order properly.

What the Costing Template Calculates

The template calculates the cost of the quantity of each ingredient used in a recipe.

For every ingredient, you enter:

• the name of the ingredient;

• the price you paid for the full item;

• the unit of measurement;

• the quantity contained in the purchased item; and

• the quantity required for your recipe.

The spreadsheet then calculates the actual ingredient cost automatically.

The basic formula is:

Quantity used ÷ quantity purchased × purchase price

For example, imagine that you buy a 1,000 ml bottle of olive oil for R200 and use 500 ml in a recipe.

The calculation would be:

500 ÷ 1,000 × R200 = R100

Although the full bottle cost R200, only R100 worth of olive oil was used in that recipe.

This is far more accurate than including the entire purchase price or simply guessing what the amount used may have cost.

How to Use the Food Costing Spreadsheet

1. Enter the ingredient name

In the Ingredient column, list every ingredient required for the recipe.

Do not leave out small ingredients such as herbs, spices, oil, garnishes or seasoning. They may appear inexpensive individually, but they add up across multiple orders.

2. Add the retail or purchase price

In the Retail Price column, enter the amount you paid for the complete product.

For example:

• R68 for a 2.5 kg bag of flour;

• R45 for 1 kg of apples; or

• R200 for a 1,000 ml bottle of olive oil.

Use the price you actually paid rather than relying on memory.

3. Record the unit

In the Units column, state how the product is measured, such as:

• grams;

• kilograms;

• millilitres;

• litres;

• individual items; or

• packets.

Try to use consistent units throughout the costing.

For example, if the purchase quantity is recorded in kilograms, the amount used should also be entered in kilograms. Alternatively, convert both figures to grams.

4. Enter the purchase quantity

The Purchase Units column refers to the total amount contained in the product you bought.

Examples include:

• 1,000 ml of olive oil;

• 2.5 kg of flour;

• 500 g of butter; or

• 30 eggs in a tray.

5. Enter the amount required for the recipe

In the Units Required column, enter how much of that ingredient the recipe actually uses.

For example:

• 500 ml olive oil;

• 0.75 kg flour;

• 6 eggs; or

• 250 g butter.

6. Review the calculated ingredient cost

The Cost Price column calculates the cost of the quantity used.

Once all ingredients have been entered, the spreadsheet totals the recipe’s ingredient cost.

This gives you the starting point for calculating your selling price — not necessarily the final price you should charge.

How to Calculate the Cost per Portion

Once you know the total ingredient cost, divide it by the number of portions the recipe produces.

For example:

• Total ingredient cost: R600

• Recipe yield: 20 portions

• Ingredient cost per portion: R30

The calculation is:

R600 ÷ 20 = R30 per portion

This tells you what the food itself costs before labour, packaging, overheads and profit are added.

It is important to cost the recipe according to its realistic yield. If a recipe technically makes 20 portions but you usually serve only 15 generous portions, use 15 in your calculation.

Should You Multiply Your Ingredient Cost by Three?

A common starting point in catering is to multiply the ingredient cost by three.

For example:

• Ingredient cost per portion: R30

• Starting selling price: R30 × 3

• Suggested starting price: R90 per portion

This approach may help create room for overheads and profit, but it should be treated as a guide rather than a universal rule.

A three-times markup may work for one product and be completely unsuitable for another. A simple baked item, a labour-intensive plated dinner and an off-site catered event do not have the same operating costs.

Before confirming your final price, ask whether it covers:

• your preparation and cooking time;

• assistants or serving staff;

• packaging;

• transport and fuel;

• electricity or gas;

• equipment hire;

• cleaning;

• venue or kitchen costs;

• payment fees;

• wastage;

• administration; and

• profit.

Your markup is not automatically your profit. It must first absorb all the other costs involved in producing and delivering the order.

Add a Fair Hourly Rate for Your Time

Your time has value.

This includes more than the hours spent cooking. Consider the time used for:

• planning the menu;

• preparing quotations;

• communicating with the client;

• purchasing ingredients;

• preparing and cooking;

• packing;

• travelling;

• setting up;

• serving;

• clearing; and

• cleaning.

Choose an hourly rate that reflects your experience, skill level and local market.

Then estimate the total labour time required and include it in your quotation.

For example:

• Estimated labour: 8 hours

• Hourly rate: R150

• Labour cost: R1,200

If another person will help you, their wages must also be included.

Working for yourself does not mean your labour is free.

Costs Beginners Often Forget

Packaging

Include the cost of boxes, containers, labels, cake boards, ribbons, napkins, disposable cutlery and bags.

Even small packaging costs reduce your margin when they are repeated across many orders.

Fuel and delivery

Decide whether delivery is included, charged separately or calculated according to distance.

Also consider the time spent driving, collecting ingredients and returning from an event.

Electricity and gas

Ovens, refrigerators, mixers and stovetops all cost money to operate.

You may not calculate the exact electricity cost of every recipe, but your selling price needs to contribute towards these ongoing expenses.

Wastage

Not every ingredient purchased ends up on the plate.

Peelings, bones, trimming, spillage, breakages and spoiled stock all affect the true cost of production.

Equipment and consumables

Remember items such as piping bags, baking paper, gloves, foil, cleaning products and equipment maintenance.

Administration

Quotations, invoices, menu design, client calls and scheduling all take time, even though the client does not see them happening.

Tax and payment fees

Depending on your business structure and payment method, you may need to account for tax, card fees, platform charges or banking costs.

Helpful Costing Tips for New Food Businesses

Update your prices regularly

Supplier prices change frequently. Review your costings whenever you notice a major increase and at least every few months.

A quotation based on last year’s ingredient prices may no longer be profitable.

Cost every menu item separately

Do not assume two dishes cost roughly the same because they appear similar.

A small change in protein, garnish, portion size or preparation method can significantly affect the cost.

Use standard recipes

Write down the exact quantities and expected yield for every product you sell.

If you make the recipe differently each time, it becomes difficult to control portions, quality and cost.

Measure your portions

Use scales, scoops and standard serving utensils where practical.

Over-portioning is one of the easiest ways to lose profit without noticing.

Keep supplier invoices

Invoices help you update your costings accurately and compare prices between suppliers.

Include a buffer for unexpected costs

Prices may change, a client may request a last-minute adjustment, or you may need to replace an ingredient.

A small contingency can help prevent these situations from consuming your profit.

Set a minimum order value

Small orders can require almost as much administration, shopping and travel as larger ones.

A minimum order value helps ensure the job is still worthwhile.

Charge separately for extras

Make it clear when delivery, staffing, setup, service equipment, rentals or special packaging are additional charges.

Do not copy a competitor’s price blindly

Another business may have different supplier rates, rent, wages, portions, overheads and experience.

Use competitor pricing as market research, but calculate your own costs first.

Build profit into the price

Profit is not something that should be left over by accident.

Your business needs profit to replace equipment, grow, handle quiet months and compensate you for taking the risk of running it.

A Simple Pricing Example

Imagine that a catering order has the following costs:

• Ingredients: R1,500

• Packaging: R250

• Labour: R1,200

• Fuel and delivery: R350

• Other overhead allocation: R300

The total cost before profit is:

R3,600

If you quote only three times the ingredient cost, your price would be:

R1,500 × 3 = R4,500

That leaves R900 after the listed costs have been covered.

Depending on the scale, complexity and risk of the order, that may or may not be enough profit.

The important lesson is to look beyond ingredients. Your final quotation should make sense once every genuine cost has been considered.

Start Simple, Then Improve Your System

You do not need complicated accounting software to begin costing correctly.

Start with the basic spreadsheet. Enter every ingredient, calculate the total recipe cost, divide it by the yield and then add the other costs involved in completing the order.

As your business grows, you can expand the system to include:

• cost per portion;

• labour;

• packaging;

• transport;

• overheads;

• markup;

• profit margin;

• tax; and

• final selling price.

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The goal is not to create the most complicated spreadsheet. The goal is to understand where your money is going and ensure that every order contributes positively to your business.

Stop Undervaluing Your Work

Undercharging may help you win an order, but it does not build a sustainable business.

Your clients are not only paying for flour, butter, vegetables or meat. They are also paying for your skill, training, creativity, time, equipment, planning and ability to deliver the final product.

You deserve to understand your numbers and charge in a way that allows your business to survive and grow.

This simple costing template is a starting point — but it is an important one.

Stop guessing, calculate the real cost, and price your work with confidence.