- Section 1Why most food businesses underprice (and it's not their fault)
- Section 2The 5 costs you must include
- Section 3Notes & Instructions
- Section 4Tab by Tab Guidance
- Section 5See it in action — the Biscoff Brownie worked example
- Section 6When ingredient prices go up (they will)
Why most food businesses underprice
(and it's not their fault)
If you've ever set a price and immediately wondered whether you'd charged too little — or felt guilty asking for what feels like "a lot" for something made in your kitchen — you're in good company. Pricing is one of the hardest parts of running a food business, and the anxiety around it is completely understandable. You put real care into what you make. Putting a number on that care is uncomfortable, and it doesn't get any easier when you can see what the big supermarkets charge for something superficially similar.
Here's the truth: most food businesses don't underprice because they lack confidence. They underprice because they've never sat down and worked out what it actually costs to make their product. Not roughly. Properly — ingredients to the gram, labour to the minute, overheads divided across every batch. Once you know your real cost, setting a fair price isn't a guess any more. It becomes a calculation. And calculations are something you can trust. This toolkit does the calculation for you.
The 5 costs you must include
A profitable price covers every cost that goes into making your product — not just the obvious ones. Here are the five categories that matter, and why each one belongs in your numbers.
Your recipe calls for 250g of butter. A 500g block costs £1.80, so that's 90p of butter in this batch. Once you work this out properly for every ingredient — the 15g of cocoa powder, the 8ml of vanilla extract, the pinch of sea salt — the total cost of a recipe becomes precise rather than approximate. Enter each ingredient into the Ingredient Master List with the pack price and size, and the sheet calculates cost per gram, millilitre, or unit for you. You enter the number once; it does the rest.
If it takes two hours to bake, fill, and decorate a dozen cupcakes — including tidying up afterwards — and you value your time at £14 an hour, that's £28 of labour in the batch. Just over £2.33 per cupcake before anything else. Many food sellers leave labour out of their pricing entirely, telling themselves it's fine because they enjoy it. That might feel true, but it's not a business — it's a very expensive hobby. The Labour Rate Calculator lets you set your hourly rate and batch time so labour is always counted.
Your market stall pitch costs £40 a month whether you sell ten jars of jam or two hundred. Your food hygiene insurance renews every year regardless of your turnover. These are overheads — fixed costs that keep your business running. They need to be spread across every batch you produce, because every batch benefits from them. The Overhead Allocator lets you list your monthly fixed costs, enter your monthly batch volume, and divides the overhead across your output so every unit carries its fair share.
A kraft paper bag is 14p. A printed sticker label is 9p. A wax-lined inner bag is 18p. Per unit, these feel like nothing. Across 300 sourdough loaves a month, you're spending well over £100 on packaging alone. Enter packaging items into the Ingredient Master List alongside your ingredients — they work exactly the same way, bought in bulk and used per unit. Once they're in the list, they flow through to your pricing automatically.
Macarons crack. Caramel seizes. A jar of jam doesn't set right and you bin the lot. Wastage is a real cost of making food — and it belongs in your pricing. Even a conservative 5–10% wastage buffer built into your selling price means that when things go wrong, your business absorbs the loss rather than you absorbing it personally. Which it will, eventually. Building in wastage isn't pessimism; it's what professional food businesses do.
Your selling price needs to cover all five of these — not just ingredients. If any one of them is missing from your numbers, you're subsidising your customers without realising it. That's a hard habit to break once it's set.
Notes & Instructions
The six tabs in Price It Right are designed to be completed in order. Each one builds on the last. Before you start, here's what you need to know about how the sheet works.
② Choose the unit carefully from the dropdown (g, kg, ml, L, or each) — the unit drives all cost calculations.
③ Your cost per g / ml / each calculates automatically in the cream columns — never edit those.
✎ Update prices whenever you restock. Every recipe using that ingredient updates instantly across the whole toolkit.
Tab by Tab Guidance
Your ingredient library. Enter each ingredient once — pack size, unit, and the price you paid. The sheet calculates cost per gram, millilitre, or unit automatically. Start here; every other tab depends on it. Include packaging items too: bags, labels, ribbon, tissue — they behave exactly like ingredients.
When an ingredient price changes, update it here and every recipe that uses it will recalculate automatically — you never need to update recipes individually.
Pick your ingredients from a dropdown, enter the quantities your recipe uses, and the sheet calculates total batch cost and cost per unit. To price a second product, right-click the Tab 2 sheet tab, select Duplicate, and rename the copy. Each product gets its own copy of the tab — your ingredient library in Tab 1 is shared across all of them.
Tab 2 is the only tab you should ever duplicate. Always duplicate from the original Tab 2, not from a copy — otherwise the formulas may not carry across correctly. When you're ready to start a new recipe, go back to the original Tab 2, duplicate that, and rename the new copy.
List your monthly fixed costs — rent, energy, insurance, market fees, subscriptions — and enter how many batches you produce each month. The sheet divides your overheads across your batches and gives you a per-unit overhead cost.
Enter your hourly rate and how long each batch takes, start to finish. You'll see your labour cost per unit. A built-in sensitivity table shows how that number changes at different rates or different batch speeds.
This is where everything comes together. Your ingredient cost, overheads, and labour pull through from the previous tabs automatically. Add packaging, set your target margin, and you'll see a suggested selling price with a full breakdown of every cost component.
If any figure shows as zero or missing, go back to the relevant tab and check the yellow cells for that section are complete — you don't need every yellow cell filled, just the ones that feed the missing figure.
Enter your cost per unit and target margin, then set the price you plan to charge on each platform. Direct, Uber Eats, Deliveroo, and Just Eat are pre-configured with their fee structures. The Custom column handles any other platform — Etsy, Not on the High Street, Folksy, Shopify, or a wholesale buyer. For each one, the tab shows whether your price hits your target margin after fees, and the exact price you'd need to charge if it doesn't.
See it in action
Follow the example before you replace it
When you first open your copy of Price It Right, you'll find a worked example already loaded — a batch of 16 Biscoff Brownies costed from first ingredient to final selling price. Before you clear it and enter your own numbers, follow it through. Seeing one real product travel from raw ingredients to a profitable price makes everything else click into place.
Seven ingredients are pre-loaded. The cost per gram calculates automatically from the pack price and size — the Biscoff spread at £2.50 for 400g works out at £0.0063 per gram, precise enough to cost any quantity to the penny.
Each ingredient is picked from a dropdown and the quantity entered. The sheet prices every gram against Tab 1. Across all seven ingredients in a batch of 16 brownies, the total ingredient cost comes to £10.40 — £0.65 per brownie.
£123 of monthly fixed costs, spread across 16 batches of 16 brownies, gives £0.48 of overhead per unit. Every brownie is contributing to the costs that keep the business running — regardless of how the week is going.
At the UK National Living Wage of £12.71 per hour (correct from April 2026), 60 minutes of baking, prep, cleanup, and packaging costs £12.71 per batch — £0.79 per brownie. This is the cost most food sellers leave out entirely.
The three costs from the previous tabs pull through automatically — cream cells, no entry needed. Add packaging and a wastage percentage (we've used 5% as a starting point — adjust it to match your own experience), set a 40% target margin, and the sheet lands on £4.00 as the suggested selling price. The minimum to hit 40% is £3.87; £4.00 is the sensible rounding, and the actual margin there is 42%.
Selling direct at £4.00 and higher on delivery platforms to absorb their commission, the brownie hits or beats the 40% target on every channel. The tab calculates the exact price needed for each platform — no guesswork.
That's the full journey — £2.32 to make, £4.00 to sell, 42% margin, every platform covered. When you're ready, clear the sample data and work through the same six tabs with your own product. Tab 1 first, in order, one tab at a time.
When ingredient prices go up
(they will)
Butter, eggs, chocolate, flour, sugar — over the past few years, the cost of almost every key baking ingredient has risen significantly, often without much warning. For a food business working on tight margins, a 20p rise in the cost of a 500g block of butter can tip a profitable product into a loss-maker. The unsettling part is that many sellers don't notice until they look at their bank balance and wonder where the money went.
This is one of the places where the toolkit earns its keep. Change the pack price for butter in Tab 1, and every recipe that uses butter updates automatically. Your ingredient cost per unit changes. Your suggested selling price in Tab 5 changes. Your margin is recalculated on the spot. You can see immediately whether your current price still holds, whether you need to adjust, and by exactly how much. Five minutes of work instead of a week of vague financial anxiety.
Whenever you restock a major ingredient — butter, eggs, chocolate, cream — open Tab 1 and check whether the price has moved. It takes less time than making a cup of tea. If it's up, update it and see what that does to your margins. If it's unchanged, close the tab and carry on. That one habit — checking costs when you restock — is one of the most valuable things you can do for the long-term health of your business.
You don't need a formal quarterly review. You don't need to set a calendar reminder. Just pair the price check with restocking, the same way you check use-by dates when you put ingredients away. Make it part of the same moment, and it never feels like extra admin.
It gets easier the more you do it. The first time you work through these tabs might take a couple of hours. After that, updating a recipe or checking your prices takes minutes. You've already done the hard work by building the numbers properly — now you just maintain them. And every time ingredient costs shift, you'll know straight away whether your prices still work. That's not a small thing. That's the difference between a business that drifts into trouble and one that catches it early.