04/11/2026·5 min read

How to price your first menu when you have no sales history yet

Before you open, you have no sales history. You don't know which dishes will sell, how much guests will spend or how much you will waste. You do know what each plate costs you, so start there. Turn that cost into a starting price, check it against industry figures and nearby menus, and set a date to correct your prices once real sales come in.

Cost every plate on what you can actually serve

The invoice price is not your real cost, because trimming, peeling and boning reduce what you can serve. Work out the yield: the edible weight divided by the weight you bought. Then divide the invoice cost by that yield to get the cost of the usable portion.

Here is a published example. You buy 100 pounds of steak and get 78 pounds you can portion, so the yield is 78%. At $12.49 a pound on the invoice, the edible meat costs $12.49 ÷ 0.78 = $16.01 a pound. If you cost from the invoice, you understate the steak's cost by more than $3.50 a pound.

To cost a full recipe, do this for every ingredient:

Divide its invoice cost by its yield.
Multiply the result by the amount the recipe uses.
Add up all the ingredients.

Include the small items too, such as oil, garnish, sauce and bread. Weigh what you actually use during test cooks instead of estimating.

Turn cost into a starting price

The standard formula is menu price = cost per portion ÷ target food cost percentage. To check a price, reverse it: food cost percentage = food cost ÷ menu price × 100. For example, a dish that costs $6 to make with a 30% target gives $6 ÷ 0.30 = $20 as a starting price.

This is often called the factor method. One menu guide calls it best suited to new concepts that are setting initial prices without much data about their business. Treat the result as a starting price, not the final answer.

No single target fits every business. The right one depends on your concept, ingredient mix, pricing strategy, operating costs and profit goals. Also weigh each dish's cash margin and its role on the menu. A dish with costly ingredients can carry a higher percentage if it leaves good cash per plate.

Check your target against real figures

The National Restaurant Association's operations data for 2024, drawn from more than 900 operators, gives these medians:

Food and non-alcohol drinks: 32.4% of sales for limited-service and 32.0% for full-service.
Food cost by size: 33.7% for full-service operators with sales under $2 million and 31.0% for larger ones. The smaller group's median income before tax was only 1.1% of sales.
Salaries and wages, including benefits: 36.5% of sales for full-service and 31.7% for limited-service.
Occupancy costs: 5.7% for full-service and 5.2% for limited-service.

The Association states that these figures are not standards or goals for individual restaurants. Use them to test your plan. If your target is far from them, you should be able to explain why.

You will also see rules of thumb for prime cost, which is cost of goods sold plus total labour. One distributor's guide says most successful full-service restaurants keep it at or below 60–65% of revenue, and that quick-service concepts often aim closer to 55–60%. This is a rule of thumb, not data from a statistical body.

Check the market you are opening into

Your costs set the lowest price you can charge, and your market limits how high you can go. Before you print the menu, it makes sense to compare your starting prices with similar places nearby.

For wider context, the US Bureau of Labor Statistics reports that prices for food away from home rose 3.5% in the 12 months to September 2026. USDA forecasts a 3.5% rise for 2026, which matches its 2006–25 average. These are national figures, not local ones.

Menu formatting may also matter. In one 2007 experiment at a single training cafe with 201 dining parties, menus with no overt reference to money, such as no dollar signs, produced 8.15% higher spending per person. It is one small study, so treat it as something to test.

Plan your first price review now

Menu engineering sorts dishes using two measures:

Popularity: each dish's share of the items sold.
Contribution margin: price minus food cost, which is the cash each plate leaves you.

You cannot know popularity until you have sold food, so the full analysis has to wait until after you open. You can calculate contribution margin today. Record it for every dish, and choose now when you will first review prices against real sales.

Worked example and checklist

These numbers are only an example. Say a soup costs 2 euros a portion after yield, and you choose a 30% target. That gives 2 ÷ 0.30 = 6.67 euros, so you might list it at 6.90. Its contribution margin is 4.90 euros.

Now say a fish dish costs 7 euros. A 30% target would put it at 23.33 euros, which may be too high for your street. At 19.90 euros it runs about a 35% food cost but leaves 12.90 euros per plate, much more cash than the soup.

Cost every recipe from test cooks, using edible-portion prices.
Set a target food cost percentage for each menu section.
Calculate starting prices with cost ÷ target.
Compare your targets with the industry medians and explain any large gaps.
Compare your prices with similar places nearby.
Record the contribution margin for each dish.
Set a date for your first review using real sales data.

Your first menu does not need perfect prices. It needs prices built on real plate costs and a fixed date to correct them once you see what customers actually order.