Steps to Follow for Ingredient Costing and Recipe Costing

Do the words “recipe costing cards” give you the hives, kind of make your skin crawl with discomfort? It’s a very common response! You know you need them, but maybe you're not 100% sure what the steps are to follow for costing out ingredients and for the costing out of the recipes. In this video I take a deeper dive into steps to follow for ingredient costing and recipe costing.

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Welcome to my YouTube Channel. I am David Scott Peters, a restaurant coach and speaker who teaches restaurant operators how to cut costs and increase profits with my trademark Restaurant Prosperity Formula. Known as THE expert in the restaurant industry, I apply my no-BS style to teach and motivate restaurant owners to take control of their businesses and finally realize their full potential. Thousands of restaurants have used my formula to transform their businesses. To learn more about me and my coaching program, visit http://www.davidscottpeters.com.

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Let's dive right into the steps to follow for recipe costing cards and the ingredients that go into them. Let’s talk about recipe costing cards. While this is not going to be an hour-long deep dive, I am going to show you the step-by-step process and what you need to know to create and upkeep recipe costing cards for your restaurant.

In this video, I provide multiple spreadsheet templates and explanations to learn the steps for ingredient costing and recipe costing.

1. Batch recipe card: a batch recipe is any soup, side dish, dessert, dressing component to a dish that you create in your restaurant. You buy products from different vendors, you put it in a pot and you make something else with it. You are now a manufacturer of goods. You make batch recipe costing cards because you need to know what each ounce of those items cost you.
2. Item recipes: These are items that you sell, which can be items you produce, but you also sell them. You have to find the cost of all the individual items so you know how much to charge for the complete item. Items are usually a combination of batch recipes and single ingredients. You can't do recipe costing cards if you don’t do your batch recipes first.
3. A consumable factor: this is the food you give away for free. For example: salt, pepper, mayo, ketchup, mustard, or chips and salsa, bread and butter on the table. These are things you’re not “charging” for, but you’re going to make sure you charge for them, but without nickel and diming the guest. They're built into item recipes.
4. A yield test: how much usable product you have once you’ve prepped an item. For example, Romaine lettuce. You buy a whole head, but you don’t use the whole head. In fact, you’re only utilizing 80% of it and throwing away the top and bottom. When you do a yield test, you know you’re paying for the full case, but you’re not using it all and the unit cost will go up, which is important in creating your recipe costing card.

Like you want to know the step-by-step process to creating your recipe cards, to be able to know what to charge and how to menu, engineer and be successful and ultimately get the ideal versus actual product usage. These are the steps.

The two most important systems any restaurant should have are budgets and recipe costing cards because they make you a proactive management team.

Recipe cards are incredibly important. They allow you to re-engineer your menu, adjust your prime cost to make up for the changes going on in our industry as labor goes up, as expenses go up, and you need this in your tool box to be successful.

With that said, I'm going to tell you right now: spreadsheets are not the way to go. You need software because software will change your life if you use it on a day-to-day basis and maintain your current up-to-date recipe costing cards.

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