Menu Strategy

Optimize your menu's content before the final design to maximize its profitability.

Food Cost vs. Menu Price
Before designing your restaurant's menu decide:

• What you will sell
• What each item cost
• What price will be charged for each item

Take a final look at your menu items keeping in mind:

• 60%-70% of food sales come from fewer than 18-24 items
• Try to have several menu items that use the same ingredients
  
• The menu Item has to be able to be cooked and plated within 10-12 minutes
  

Your Goal is to design a profitable menu.
To do this you must know the profitability of each item. This will decide the placement of each item on your restaurant's menu.

First Determine each items' plate cost

• Decide what will be on each plate including sides
  
• Set and record each plates portions
• Compare each plate to your invoices to determine the cost of each plate
  

         
Second use food cost percentage to figure an approximate price                                          
Lets say for example you are trying to achieve 30% food costs and have determined that your Chicken Marsala with all the sides costs $2.94 per plate. Simply take $2.94 and multiply by 3.3
which equals $9.71 ( this is automatically rounded up to $9.75)
You now have an approx. price with a 30% food cost.
For example you find the lowest price within 50 miles for Chicken Marsala is $12.99 and customers are ordering it. You may want to think of increasing the price to $12.99. This sets the food cost percentage for your Chicken Marsala at 23% ( plate cost divided by plate price)


When pricing a menu also consider

• Food Cost percentage is not the only factor in deciding profitability you must also consider actual profit per item. Just because an item has a higher food cost % does not affect actual profit margin
• Studies have shown menu items should end in a 9 or a 5 - not a 0 - An item is perceived much differently at $8.00 then at $7.95

Food Cost Formulas

• Plate Cost= cost of plate divided by price of plate
• Food Cost Percentage= cost of food divided by food price
  

•  Actual Food Cost Percentage = actual food cost (for a given period) divided by total food sales
• Actual Food Cost= (beginning inventory+ purchases) - (ending inventory)

  To keep your menu profitable requires constant attention. Here are some quick tips

• Keep strict portion controls
• Rotate Food inventory daily
• Control waste by constantly training your kitchen staff. There should be no doubt about what items and how much goes on every plate
• Keep daily, weekly, and monthly reports on food cost %
• Keep track of what items are selling and what items are not.  Menu inserts are a good way of introducing new items before updating your menu.
• Redesign your menu on a regular basis keeping in mind customer feedback and new trends

  Back to "Secrets of Menu Design" >>