How to Calculate Food Cost for Your Pakistani Food Business

If you run a home food business or catering operation in Pakistan, there is a good chance you are undercharging for your food. Not because your food is not worth more — but because most food businesses in Pakistan have never properly calculated what a dish actually costs to make.

This guide walks you through exactly how to calculate food cost, step by step, using real Pakistani examples.

What is food cost?

Food cost is the total amount you spend on ingredients and packaging to make one dish or one order. It does not include your time, gas, electricity, or delivery — those are operating costs, which we will cover separately.

A simple formula: Food cost = ingredient cost + packaging cost

Step 1 — List every ingredient

For every dish you sell, write down every single ingredient. Do not skip small things like oil, salt, or spices — they add up over hundreds of orders.

Example: Chicken Karahi for one portion

• Chicken 250g
• Tomatoes 150g
• Cooking oil 2 tbsp
• Ginger garlic paste 1 tsp
• Salt, cumin, red chilli — 1 tsp each
• Fresh coriander — a small bunch

Step 2 — Calculate the cost of each ingredient

This is where most people get confused. You buy chicken at PKR 480 per kg, but you only use 250g. So your chicken cost for this dish is PKR 120 — not PKR 480.

The formula is: Cost = (quantity used ÷ quantity purchased) × price paid

For the chicken: 250g ÷ 1000g × PKR 480 = PKR 120

Do this for every ingredient. For spices measured in teaspoons, a rough guide is that 1 teaspoon of ground spice weighs about 3-4 grams. If you bought a 100g packet of cumin for PKR 60, then 1 tsp costs you roughly PKR 2.

Step 3 — Do not forget wastage

When you buy 1kg of chicken, you do not get 1kg of usable meat. After cleaning, bones, and trimming, you typically lose 20-30%. This means the effective cost of your usable chicken is higher than you think.

If you buy 1kg chicken for PKR 480 but only get 700g of usable meat, your real cost per 100g is PKR 68 — not PKR 48.

Always factor in wastage for meat, fish, and vegetables.

Step 4 — Add packaging

Foil trays, plastic boxes, paper bags, labels — these all cost money. A foil tray might cost PKR 15, a plastic bag PKR 5, and a label PKR 3. That is PKR 23 per order before you have cooked a single thing.

Step 5 — Add your operating costs

This is the step almost every home food business skips — and it is why so many are unknowingly running at a loss.

Operating costs include:

• Labour — your time and any helper's time. If you spend 2 hours making 10 portions of biryani, your time has a value.
• Gas and electricity — cooking uses gas. Estimate your monthly gas bill and divide by the number of dishes you make.
• Transport — delivery fuel, rider fees, or your own petrol.
• Marketing — WhatsApp status photos, Instagram posts, any paid promotion.

Divide each of these by the number of dishes in a batch to get the cost per dish.

What should your food cost percentage be?

A healthy food cost percentage is between 25% and 40% of your selling price. This means if your total cost (ingredients + packaging + operating costs) is PKR 400, your selling price should be at least PKR 1,000 to maintain a healthy margin.

If your food cost is more than 40% of what you charge, you need to either raise your price or reduce your costs.

Use Plate Profit to do this automatically

Calculating this manually every time is time-consuming and easy to get wrong. Plate Profit is a free tool built specifically for Pakistani food businesses that does all of this automatically.

You enter your ingredients, quantities, and the prices you actually pay at your local market. Plate Profit converts grams to kilograms, teaspoons to packet quantities, and factors in wastage — then shows you your exact cost per dish and your margin across different selling platforms.

It takes five minutes per dish and gives you numbers you can actually trust.

Try Plate Profit free at salttheorylab.com — no card required.