How to Train Your Kitchen Team on Food Cost, Prime Cost, and Profit Margins, and Why.

There's a moment most kitchen managers know too well. You're sitting across from a talented sous-chef, someone who can break down a whole fish blindfolded and plate a tasting menu under pressure, and you ask them what the food cost is on the new special. The pause that follows tells you everything. They don't know. Worse, they don't know how to find out.

This isn't a failure of intelligence or effort. It's a gap in the kitchen team's financial training. Culinary schools teach technique, timing, and palate development. What they rarely cover is the financial literacy that separates a good cook from someone who can run a profitable kitchen. And yet, these numbers are what keep the lights on, the suppliers paid, and the team employed.

The good news is that teaching your team to understand restaurant costs isn't complicated. It doesn't require accounting degrees or spreadsheet mastery. It requires consistency, context, and a willingness to share information that many kitchens keep hidden in the office.

Here's what your team should understand and how to get them there.

Start with food cost percentage

Food cost percentage is the foundation. If your team understands nothing else, they need to understand this number and what moves it.

The food cost calculation is straightforward: divide the cost of ingredients used to make a dish by the price you sell it for, then multiply by 100. A dish that costs £4 to make and sells for £14 has a food cost of roughly 28%. Most restaurants aim to keep food costs between 28% and 35%, though this varies by operation. Fine dining might run higher, quick service lower.

The key is helping your team see this number not as abstract accounting but as something they directly influence every time they prep, plate, or portion. Every gram of protein that ends up in the bin, every over-portioned side, every ingredient that spoils because it wasn't rotated properly affects this percentage. We've written before about how proper stock rotation and storage systems can prevent good ingredients from becoming waste before they ever reach the plate—the first-in, first-out method is simple, but when shelves aren't well organised, or training hasn't been reinforced, even the most basic systems break down.

Start by costing out your most popular dishes and posting those costs somewhere the team can see them. Not hidden in an office spreadsheet, but visible near the pass or in the prep area. When a cook sees that the beef fillet they're portioning has a raw cost of £8 per serving, they think differently about how they handle it.

Resources like The Book of Yields by Francis T. Lynch can help establish accurate costing based on real yields rather than as-purchased weights. It's the kind of reference that should live in every professional kitchen.

Labour cost is the other half of the equation

Food and labour together make up what the industry calls prime cost, and it's the single most important number for understanding whether an operation is financially viable. According to industry benchmarks, prime cost should typically fall between 55% and 65% of total sales. Push much higher than that and profitability becomes nearly impossible, regardless of how busy the restaurant is.

Labour cost percentage works the same way as food cost: total labour expenses divided by total sales, multiplied by 100. Labour expenses include wages, benefits, payroll taxes, and any overtime.

Your team might not need to calculate this themselves, but they should understand how their efficiency affects it. A prep cook who takes three hours to complete work that should take two isn't just running slow; they're adding 50% more labour cost to everything they touch. A closing routine that drags on for an extra hour every night adds up fast.

This is where cross-training staff becomes valuable beyond just covering shifts. When team members understand multiple stations, you can operate with leaner rosters without sacrificing quality. The prep cook who can jump on the line during a rush, the server who can run food when needed—these flexibilities directly improve labour efficiency.

We saw this play out when helping a high-volume restaurant that was producing excellent food but struggling to make the numbers work. The kitchen was technically impressive, but stretched across too many complex dishes with no ingredient crossover. By refining the menu and restructuring the day—shifting cleaning and breakdown tasks into quieter afternoon periods rather than leaving everything for exhausted crew at close—we shortened shifts, reduced labour hours, and improved morale without cutting the team. The food stayed excellent; the operation became sustainable.

Gross profit tells you what you're actually making

Gross profit is what remains after you subtract ingredient costs from revenue. For a dish sold at £20 with £6 in ingredients, the gross profit is £14. Expressed as a percentage, that's 70%, which is roughly where a financially healthy restaurant wants to be.

This matters because gross profit margin reveals whether your pricing makes sense. A dish might be popular, but if its gross profit margin is only 50% because of expensive ingredients, it's pulling down your overall profitability even while it sells well.

Teach your team to think about dishes in terms of contribution margin, the actual pounds and pence each sale contributes, rather than just food cost percentage. A high food cost item that sells for a premium might contribute more cash per plate than a low food cost item with slim margins. Understanding this helps the team make better recommendations to guests and smarter decisions about specials.

Yield percentage connects the kitchen to the numbers

One of the most practical things you can teach your team is yield testing. The concept is simple: weigh an ingredient as purchased, process it (peel, trim, butcher), then weigh what's actually usable. The edible portion divided by the as-purchased weight gives you the yield percentage.

A 5kg beef roast that yields 4kg of portionable meat after trimming has an 80% yield. That means your actual cost per usable kilo is higher than what you paid per kilo, and your recipe costing needs to reflect this reality.

Yield testing achieves several things at once. It establishes accurate costs for menu pricing. It creates benchmarks for comparing butchery efficiency between team members or shifts. It identifies ingredients with unexpectedly high waste, which might indicate supplier quality issues or the need for different sourcing. This connects directly to how you approach procurement—understanding yields helps you have more informed conversations with suppliers about what represents genuine value versus false economy. When you know your actual yields, you can push back on quality issues before they become financial problems.

Have your team conduct yield tests on your highest-cost proteins and most frequently used produce. Document the results and review them periodically. When someone new joins the team, these benchmarks become training tools, showing them what the standard looks like.

Waste tracking makes the invisible visible

Waste has a way of hiding in plain sight. A few portions over-prepped here, some trim that could have been used there, and plates coming back with food uneaten. None of it feels significant in the moment, but collectively it represents money walking out of the kitchen.

Research from WRAP suggests that hospitality food waste costs the UK sector billions annually, with the majority occurring during kitchen prep. The good news is that for every pound invested in waste prevention, operations typically see returns of seven pounds or more.

Start with a simple food waste log. It doesn't need to be sophisticated. A sheet near the bins where the team records what's being thrown away and why. After a week or two, patterns emerge. Maybe there's consistent over-prep on a particular item, or a garnish that guests regularly leave untouched. Each pattern is an opportunity.

Some operations have found success with transparent waste bins in prep areas. When the team can see what's accumulating, it creates natural accountability without anyone needing to say a word. We've explored other practical approaches to recycling and waste systems that can be implemented without major investment—sometimes it's as simple as colour-coded bins and clear signage.

Systems like Winnow and Leanpath have taken this further with AI-powered tracking that automatically categorises and costs waste, but you don't need technology to start. You need visibility and consistency.

How to train the kitchen team on financial metrics 

Knowing which numbers matter is one thing. Building the habit of tracking them is another. Here's what we've found works for teaching financial literacy to hospitality teams:

Make it part of the daily rhythm. The numbers shouldn't live in monthly reports that nobody reads. Build them into pre-service meetings or shift handovers. What's the food cost running this week? What's moving well, and what's sitting? Quick updates keep awareness high without creating an administrative burden.

Use real examples from your own operation. Generic industry benchmarks are useful as references, but nothing lands like showing your team the actual numbers from their own work. When they can see that last month's food cost was 31% and this month it's 34%, they understand something changed. Then you can dig into why together.

Create recipe cards with costing built in. Every dish should have a specification that includes not just ingredients and method, but portion sizes and costs. When a cook refers to a recipe card, the financial information should be right there alongside the culinary instructions. This normalises cost awareness as part of professional cooking rather than something separate. 

Give people ownership of specific metrics. Rather than making everyone responsible for everything, assign individuals to track particular numbers. One person monitors protein yields, another tracks prep waste, and someone else keeps an eye on portion consistency. Ownership creates engagement.

Review regularly, but don't punish. Numbers should inform decisions, not become weapons. If food cost spikes, the question isn't who to blame but what changed and how to correct it. Creating a culture where people feel safe raising issues with stock or waste is more valuable than a culture where problems get hidden until they're too big to ignore.

Connecting food cost to menu pricing and procurement

Financial literacy doesn't exist in isolation. It connects directly to how menus are designed and how ingredients are sourced.

When your team understands food cost, they can participate more meaningfully in menu development. Instead of creating dishes in a vacuum and hoping the pricing works out, they can consider cost constraints from the start. Which ingredients offer the best value? Where can components be cross-utilised across multiple dishes to reduce waste? What seasonal options might deliver better margins? These are exactly the questions we explore when thinking about how menu design starts with procurement decisions—the menu isn't just a culinary document, it's a strategic tool that shapes purchasing, prep, and profitability.

This ties into sourcing decisions as well. A team that understands yield and cost can have more informed conversations with suppliers. They know which products are worth paying premium for and which represent poor value. They can spot quality issues that affect usable yield before those issues become financial problems.

Local, seasonal ingredients often deliver better yield and freshness, which improves both margins and guest experience. The sustainability angle and the profitability angle aren't in conflict—they're deeply connected. When you source well, store properly, and prep efficiently, you're doing right by the environment and the balance sheet at the same time.

Building capability, not dependency

The goal of teaching your team the numbers isn't to turn cooks into accountants. It's to build the capability that makes the entire operation more resilient.

When a sous chef understands food cost, they make better decisions about specials without needing to run everything past management. When a prep cook understands yield, they handle expensive ingredients with more care. When the team collectively understands labour efficiency, they find ways to work smarter without being told.

This kind of capability takes time to develop. The training programme we ran for that village pub kitchen lasted six months for a reason. Quick fixes don't build kitchens. But the investment paid off. Three years later, the kitchen is still operating on the principles we established. The team has grown, the pub has expanded, and the sous chef has become a mentor to newer members, passing on the same practical knowledge they received.

That's how sustainable change works: when the people you train become the ones doing the training.

Where to start

If your team currently has limited financial awareness, don't try to teach everything at once. Pick one number—probably food cost percentage—and build understanding around that before adding complexity.

Cost out your top ten dishes and share those costs with the team. Conduct yield tests on your most expensive proteins. Start a simple waste log. Make cost awareness part of how you talk about food, not a separate topic that only comes up when something goes wrong.

The systems that keep a kitchen running well are usually the ones nobody notices when they're working—and the first to show when they're not. Financial literacy is one of those systems. When it's in place, decisions become faster, waste becomes visible, and the team operates with a shared understanding of what success actually looks like.

If you'd like support building financial capability within your team, or you're looking for a structured approach to kitchen training that covers both the culinary and commercial side, we'd be happy to talk through what might work for your operation. Reach out to us at hello@gezelle.co.