How to set the price of your restaurant menu

Setting the menu price: the fun part

Writing the menu is the fun part of opening a new one restaurant. But how do you know how much to charge to make sure you make a profit? The cost of food and portion control These are two things that will help you price your menu correctly, but you also need to be careful not to leave the local market. It's challenging to create a balanced menu that performs well against the competition and keeps you in business.

Understand your gross profit margin

Your focus as a restorer should be on your percentage of gross profit margin . It is what you have left after you have met all expenses directly related to the sale of your product (mainly the cost of goods and direct labor).

If you stay close to these numbers, you will get a greed gross of about 35% to 40%, which is a good target in the business of restaurants. Please note that these additional expenses (occupancy costs, marketing expenses, etc.) will come out of this before you realize your final net profit.

Start with the cost of food 

The cost of food refers to the price of the menu of a particular dish compared to the cost of the food used to prepare that dish. In other words, how much you pay for food determines how much you should charge your customers for it.

It may seem like you are charging much more than you need, but be aware that you are not just paying for the food itself. You're paying someone to prepare it, serve it, and clean it up later. You also need enough earnings gross to pay for the building their customers dine in and bear the other costs of keeping their business afloat.

So once you know the costs of those other business expenses, you can focus on the target gross profit you will need to achieve. Armed with that, you can work to put a price on your menu. Let's look at a typical menu item: a filet mignon.

The basic equation

Start by calculating cHow much will it cost you to serve dinner preparation, including ingredients and staff costs.

The initial cost of dinner can be divided into two areas. The beef steak costs $ 6 per serving. The wrapper (the potato, vegetables, salad, and bread that come with the steak, as well as any seasoning) costs $ 2.50. Therefore, the entire meal costs $ 8.50. When you add labor costs, it can be up to $ 14.50.

Now subtract this from the proposed menu price and divide the result by the menu price. Let's say you have chosen a menu price of $ 25. The equation would look like this:

$ 25 - $ 14.50 = $ 10.50

$ 10.50 / $ 25 = 42%

What does this tell you? For one thing, its $ 25 price is in the right arena. It is even a little high. You may want to excite your customers and drop the price to $ 24, making them think they are getting a deal. Your gross profit margin on this menu item would still be a perfectly reasonable 39.5%, and the price difference could draw other customers to the door. Psychology matters as much as exact numbers.

Prices change as you make changes

Let's say this increases the costs of your foods, so the total cost to you for this meal is now $ 15.50. At a menu price of $ 25, this would have a similar effect to lowering the price to $ 24 without adding the bacon and herb butter. You're still at 38%, which is respectable. But your customers could be so much happier with this embellished meal, and word of mouth is everything.

Control of portions

One of the reasons why restaurants chain have both <strong>success</strong> is that they have a firm grip on portion control. The cooks in these restaurants they know exactly how much of each ingredient to put on each plate. Garlic prawns can have a portion control of six prawns per plate, so each prawn that comes out of that kitchen They will have six prawns, no more, no less.

Everything should be measured if you are going to practice portion control on your kitchen. All chicken, beef, and fish should be weighed, while grated cheese can be stored in portion control cups and a measuring cup can be used to spread the mashed potatoes.

Another way to practice portion control is to buy pre-divided items, such as steaks, hamburgers, chicken breasts, and pizza dough. These items may be more expensive, but you will save money on labor and food waste.

A well balanced menu

Food markets fluctuate depending on the season, the weather, and even the price of gas. One day, lettuce could be $ 10 a box, then jumps to $ 30 a box. Unless you change your entire menu every few weeks, there is little you can do when prices rise.

However, you can maintain the desired cost of food if you combine expensive items that are prone to price fluctuations with items that have more stable prices. So go ahead and include some fresh lobster and beef on your menu, but balance it with less expensive chicken or pasta dishes.

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Keep in mind that the cost of some expensive cuts of meat can reach 50% of the menu price. The cost to you of appetizers and desserts is practically nil, so your gross profit margin on those items can stabilize the low margin on the more expensive ones, like a steak.

Organize your menu so that everything is balanced in a decent benefit for you.

Evaluate the competition

Menu prices are so important to your customers as they are to you. Most diners know roughly what they are willing to spend on a meal before they even sit down at one of their tables. And it's human nature to be happy when you spend less money than you expected. Create the correct price points for your menu It is essential to keep your margins under control and stay competitive.

Which brings us to one last very important factor in the menu price. What are your competitors charging?

Visit them for a meal or have a friend or associate do it. Why is the boy on the street selling his special filet mignon dinner? You don't want to price yours $ 5 on top of that, no matter how the mathematics. Your customers will start dining on the street if your version is not truly exceptional and clearly worth an additional $ 5. And that, of course, is a completely different topic.

I am a dreamer and in my dreams I believe that a better world is possible, that no one knows more than anyone, we all learn from everyone. I love gastronomy, numbers, teaching and sharing all the little I know, because by sharing I also learn. "Let's all go together from foundation to success"