The Math Behind Your Restaurant Profits – Part 3

 In 1. David Scott Peters, bar, Food Costs, Tip of the Day

By David Scott Peters

Restaurant Tip of the Week

Formulas give consistency to pricing

Many of the financial relationships necessary to develop an effective pricing structure only can be derived through mathematics. Following is one such formula.

Beverage cost method: This is a cost method of pricing used to determine the target sale price for mixed drinks prepared with multiple ingredients. Combine the cost of the product and then divide by the desired cost percentage. (Don’t forget that this is only a guide. A market survey will help you finalize your prices.)

  • A 75 cent beverage cost divided by the desired cost percentage, 20 = the target sales price $3.75.

David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in teaching independent restaurant owners how to use systems for increased sales and increased profits. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at

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