To decide which products to keep, push or drop, you need two numbers per product: how much it brings in over the month, and how much it brings in per kitchen hour. Products that score high on both are the ones to protect. Products that sell a lot but pay little per hour need fixing. Products that pay well per hour but sell little need pushing. And products that score low on both get reviewed or dropped. It is a simple version of what restaurants call menu engineering, sized for a business of one to three people.
The two numbers for each product
1. Monthly contribution = units sold in the month × contribution per unit.
Contribution per unit is the price before tax and after commission, minus variable cost: ingredients, packaging, gas or power for the batch, and waste. If you do not have it, start with contribution margin. The monthly figure tells you how much that product holds the business up.
2. Contribution per kitchen hour = monthly contribution ÷ kitchen hours spent on that product in the month.
This tells you how much each hour you give it pays you. It is explained in profit per kitchen hour.
With both numbers you can place each product in a grid of four boxes. For the dividing lines, use your own business's averages: the average monthly contribution per product, and the average contribution per hour across everything you make.
Worked example: five products over one month
You sell five products from home. These are one month's numbers:
| Product | Sold | Contribution per unit | Monthly contribution | Hours in the month | Per hour |
|---|---|---|---|---|---|
| Meal prep boxes | 160 | $5.60 | $896.00 | 48 | $18.67 |
| Brownies | 240 | $2.21 | $530.40 | 12 | $44.20 |
| Sourdough loaves | 96 | $5.40 | $518.40 | 16 | $32.40 |
| Hot sauce (bottle) | 48 | $6.65 | $319.20 | 9 | $35.47 |
| Strawberry jam (jar) | 24 | $4.45 | $106.80 | 7 | $15.26 |
| Total | $2,370.80 | 92 |
The dividing lines:
- Average monthly contribution per product: 2,370.80 ÷ 5 = $474.16
- Average contribution per hour: 2,370.80 ÷ 92 = $25.77
Each product, against those two lines:
| High per hour (above $25.77) | Low per hour (below $25.77) | |
|---|---|---|
| High month (above $474.16) | Stars: brownies, sourdough | Workhorse: meal prep boxes |
| Low month (below $474.16) | Hidden gem: hot sauce | Review: strawberry jam |
What to do with each box
Stars: protect them
Brownies and sourdough carry the month and pay your hour well. Do not use them for discounts, and do not change the recipe to save money without testing. Recheck their cost when butter, chocolate or flour go up, because any change here affects the whole business.
Workhorses: fix them
Meal prep boxes sell well and take 48 of your 92 hours, but pay you $18.67 an hour. They are the product that costs you the most work per dollar. Three fixes, with their numbers:
- Raise the box to $12.50. Contribution rises to $7.10, and the month, if you sell the same 160 boxes, to $1,136.00. Per hour: 1,136 ÷ 48 = $23.67. How to raise prices without losing customers helps with this.
- Batches of 40 instead of 20. If a batch of 40 takes 10 hours, the 160 boxes come out in 4 batches and 40 hours: 896 ÷ 40 = $22.40 per hour.
- Both together: 1,136 ÷ 40 = $28.40 per hour, above the average, and you get 8 hours a month back.
Be careful about pushing this product before you fix it. Selling more meal prep at $11.00 fills your week without improving the month much: that is the growth trap of selling more and earning less.
Hidden gems: push them
Hot sauce pays over $35 an hour but sells little. Every extra batch you sell brings in more per hour than most things you make. If you sell 24 more bottles a month, that is one more batch and 4.5 more hours, and 24 × 6.65 = $159.60 more contribution.
Ways to push it without giving away margin: put it next to the bread at the market, offer a tasting spoon, mention it first in your messages, pair it with the meal prep boxes as an add-on. Before making more, confirm that people will buy it.
Review: fix it or drop it
Jam takes 7 hours a month and brings in $106.80: $15.26 an hour. If you raise it from $7.50 to $8.50, contribution rises to $5.45 and the month to $130.80, but the hour is still 130.80 ÷ 7 = $18.69. Still low.
If you drop it, you lose $106.80 and get 7 hours back. If those hours go into hot sauce you can sell, they are worth about 7 × 35.47 = $248. If nobody will buy more hot sauce, the hours are still worth something: less work for almost the same money. The signs a product is losing money help confirm the case.
Before you drop a product, check this
- Does it bring in customers who buy other things? If people come to the stall for the jam and leave with bread, that jar does more than its row shows. Ask and keep notes for a month.
- Does it use leftovers? If it uses fruit that would otherwise go to waste, its real cost is lower and your waste drops.
- Is it seasonal? Jam may sell little in one season and well in another. Look at more than one month.
- Does a big regular customer ask for it? A café or office that buys several things might leave if you remove one. Count what would leave with them.
- Do you get paid on the spot? A product you sell on credit can look fine in the grid and leave you short of cash; why you can be profitable and still have no money explains this.
Test the decision for a month
Do not change everything at once. Pick one fix for the workhorse and one push for a gem, and measure the next month: total contribution, total hours and the business's contribution per hour. In the example the business made 2,370.80 ÷ 92 = $25.77 an hour. If that number goes up after the change, you are on track.
Remember that the contribution from all your products still has to pay your fixed costs before it is profit; the difference is in gross profit vs net profit. For the full set of tests per product, see how to know if your food product is profitable.
Do it with the calculator
Run each product through the food cost calculator with its recipe, price and minutes of work per batch, with your hourly pay set to 0. Note what it brings in per kitchen hour, and multiply what it brings in per unit by what you sold in the month: those are the two numbers for the grid.
Frequently asked questions
How many products should a small food business have?
There is no right number. As many as you can make well in your hours and sell without them piling up. A product that uses hours and brings in little is one too many, even if your range is small.
Should I drop a product that sells well but earns little per hour?
Try to fix it first: raise the price, make bigger batches or cut steps. Only if none of that works, and its hours can go to another product you can actually sell, does it make sense to cut it back or drop it.
How often should I review my product mix?
Once a month, with what you actually sold. And whenever an ingredient price changes a lot or you launch something new.
What if customers ask for the product I want to drop?
You can keep it as made-to-order only, at a price that pays your hour, or give notice and offer something similar that suits you better.