Sure. I’m happy to assist you.
One of the great things about being in the soft serve business is that it has a low food cost and high profit margin.
We do not recommend buying the cheapest soft serve mix on the market because the overall food cost difference between a low-end product and one of quality is not that great.
For general purposes, let’s say you are paying $5 a gallon for your soft serve mix. We always calculate product by weight. Some companies will play with their overrun numbers from the machine to make their product look less expensive than it actually is per ounce. You cannot misrepresent cost when you use weight calculations. So we’ll go with 144 weight ounces in a gallon which is the industry standard.
$5 per gallon / 144 weight oz. equals 3.5 cents per weight ounce. So a 4 oz. cone would cost you $0.14 to serve minus the cost of your cup, spoon, cone or napkin.
If you have a gravity machine with a typical 35% over run, your 4 oz. cone by weight will have the appearance of 5.4 oz. of volume on the cone.
If you sell that cone for a $1.50, you then set up a fraction. Your product cost is $0.14 and your sell price is a $1.50 – so, $0.14/$1.50=$0.09. Therefore, the food cost on your product is 9%. Which means you make $0.91 on every dollar you sell as profit, or a $1.37 profit on that serving – .91 x $1.50 = $1.37.
Remember – you have to add in the cost of your cone, cup, etc.
There you have it: that’s the basic concept of food cost. As a general guideline, you’d like to keep your overall food cost below 30% on any item you sell. So, you can see, the soft serve business is very profitable as an item to sell in your store.