Friday, January 10, 2014

Steps to take to make your restaurant menu more profitable

You can have the most exotic, exciting, different, topical menu in the world – but have you got your costing’s right?

After your chef has designed his dishes, hopefully he will have done a huge cost exercise – if not, you need to sit down with him and go through it line by line, item by item. Sometimes, you need an outside or a third ‘eye’ – what you see is what you hope will attract your customers in terms of menu – but you haven’t worked out your bottom line and are carried away with the romance of owning your own restaurant. Seek outside help for that non-biased affirmation of your costs, it could make or break you.

Work out your theoretical but tangible costs – cost of product, cost of production, staff costs, and general overheads per menu item. This may seem laborious, but this can save your restaurant life. It will take time, so again, that ‘third eye’ can help with the number crunching.

Once in operation, your POS system will be the trigger to understanding your profit and loss situation – it will isolate your key sellers (stars) and your ‘waste of time’ items (dogs). It will also show you your middle of the road items, those that sell but do not make much profit but are popular on a regular basis (plough) horses, and those that have irregular or intermittent sales but make good profits (puzzles).

Your analysis of this information is of paramount importance, and the big question will always be WHY?
You need to determine whether:
  • Your cost per menu item is too high for the current market place
  • Your cost of ingredients is over sourced
  • The taste just simply ‘is not right’ – too bland, too spicy, unpalatable etc.
  • Portions are too large and over fussy in presentation
  • High product deterioration costs – (must be used quickly, no shelf life)
  • Do your staff know how to sell, and has the menu item been explained to them so that they can point out the brilliance of the dish?
In essence, you need to ‘ditch the dog’ or ‘perfect the plough horse’. The enigma of your ‘puzzles’ could be to upsell as a special offer, or couple in with a special cocktail etc. You can leave your ‘stars’ alone for the moment, but always look at methods of improving them, creating even better profits and making them shine.
Throughout your entire menu, you need to continually establish if you have the right supplier, or whether you can find great quality product and superb service from the producer for less money – less costs make more profit.

Menu Engineering is a tricky and slow process and it takes time to perfect. Having laid out money, taken bank loans and nights of endless worry, it could be the time to enlist the help of a company who are experts in solving your menu dilemmas.
Above all, utilise your product to its full capacity – low wastage means less dollars thrown in the bin and more in your bank account. Creativity without reduction in quality is the essence of making that bit extra over a continued period of time.

CFO Business Growth Solutions, LLC provides Nationwide Restaurant Accounting, Restaurant Bookkeeping Services, Menu Engineering, POS Business Intelligence and Menu Writing Services.  For more information go to

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