It’s always a bit of a balancing act when you are trying to set menu prices for your restaurant business. While you do need to cover the cost of your business overhead and your employees’ pay, you also need to keep your prices in line with what other local establishments are charging for similar menu items. And of course, it wouldn’t hurt to also make a small profit on each of your entrées, otherwise what’s the point of being in the restaurant business?
Cost out your menu
This has become a very complicated task over the years, and it’s one that you really can’t do manually anymore. It’s best if you have a food cost calculator on hand, so that you can be accurate and have a clear picture of what everything is costing you. Once you know how much all your food costs are, you should make an effort to find out what your competitors are charging for similar entrées, although you shouldn’t get too carried away with this. Keep in mind that their food costs may be different from your own. In addition, you may be providing better food products and better service than your competition, so your prices should be a reflection of that.
Feature your best entrées
When you’re putting your menu together, you should make a point of featuring those dishes which play to your strengths, and which are dishes that you prepare best. You may be able to charge less for customer favorites, simply because you’re selling them in volume, rather than as occasionally requested menu items. If you have some menu items which are more exotic, these will obviously need to be priced higher, because your food costs are higher, and your preparation cost may be higher as well.
Balance high cost items with low-cost items
It’s a good idea to offset higher cost items on your menu with some lower-cost options, so that you can appeal to the broadest possible audience. In order to do this, you have to maintain accurate food costs, so that you know exactly what your investment is, and how much it will take to recover that investment. When you know exactly what everything costs you, and you take advantage of your establishment strengths, you should come out way ahead in keeping your customers happy.
If you’re thinking of making renovations or other enhancements to your restaurant business, you should be consulting with us at Black Wolf Capital Group. Contact us today, so we can review some financing options with you that might make your business improvements more achievable.