Food Product Cost & Pricing Calculator
Knowing how much your products cost you to make and how to price them in a way that will make you money is as important to a successful food business as having good recipes. And yet it’s the piece that is often missing for too many food entrepreneurs I talk to. Having ‘a rough idea’ of what your products cost is not a strategy for success. Too often, when you dig down, it turns out that the price these entrepreneurs are charging (based on what they think customers will pay) isn’t covering their costs. Which is why I’m happy to introduce two new food product cost and pricing options for small food businesses.
1. If you are not comfortable with Excel or simply prefer to have someone help you determine your costs and pricing, Small Food Business now offers affordable one-on-one Food Product Cost & Pricing Consultation. With this service, which costs $50, you can send up to 4 recipes which I will analyze and, within 5 business days, get back to you with your product costs and pricing suggestions. This option also includes a 15 minute phone or Google+ consultation where we can talk one-on-one about your product costs and pricing or about any part of the business you’d like to talk about. (Additional recipes cost $10 per recipe). For more information about the Food Product Cost & Pricing Consultation please click here and fill out the inquiry form.
2. The Small Food Business Food Product Cost & Pricing Calculator: If you are comfortable with Excel, I’ve created a tool that enables you to put your recipe into the spreadsheet and then it will automatically calculate your product costs and provide pricing suggestions. This can be used for all of your recipes and you keep them safe and sound on your computer where you can always access them. Available for $14.99, this calculator comes with written instructions and an example to help walk you through the set up process.
You input your recipe and the associated weights and total costs for each ingredient and the spreadsheet will automatically calculate your per unit cost and how much the total ingredients in this recipe costs you.
The calculator autmatically determines your Cost of Goods Sold (Total Per Unit Product Cost) and your recommended pricing structure based on your indicated margins.
As always, if you are unhappy with either the consultation or the calculator, or if they don’t meet your needs for whatever reason, I will refund 100% of your money.
This is the ‘golden ticket’ for every person in the food business. If you are not currently making decisions based on the costs (and commodities change throughout the year), this is a must have item. Thank you Small Food Biz, for making this valuable tool available to all.
Reblogged this on Some thoughts and commented:
Not only pricing, but also the avenues for marketing are essential. The marketing strategy adopted, the quality of food supplied, feedback from customers, and various ways of improving the sales are all essential for Small Food Business to survive. If any one of the various factors mentioned flops, the survival of the business is in danger.
I don’t disagree at all. Like a good recipe, running a successful small business relies on numerous ingredients. That being said, one of the biggest things I run into time and time again when working with entrepreneurs is that they don’t know their product costs and simply price their products based on what they ‘think’ a consumer may pay. That’s a dangerous strategy especially if it turns out it’s costing you more to make each product than you’re charging (which I’ve seen happen!).
Just a note – the distributor price of 5.23 would provide a 30 cent margin, but not a 30% margin, when the distributor sells it to a retailer for 5.53. I think there may be a math error.
Ellen,
Thanks for pointing that out. The spreadsheet itself is correct but I posted the wrong screenshot (lesson learned about not simply titling things ‘screenshot1′, ‘screenshot2′, etc!). Thanks for letting me know the screenshot was wrong. It’s been updated now.