How to Price Your Menu

July 11, 2011 by  
Filed under Restaurant Business

One thing that restaurant owners influence the most is the pricing of their menus. While most people think it would be fairly easy to create a menu and have prices that are reasonable, they usually fail to understand the price of the ingredients and the need to make a profit as well as keeping your customers happy.

All of this is very important when deciding on the prices and is not something you can take lightly. You need to research everything you can about your ingredients and figure out what you can do to pay less and earn more for your time.

How to Price Your Menu

How to Price Your Menu

The first thing you need to do is write out a detailed list of every ingredient, including spices and garnish, for each item on your menu. You will need to assign the operating cost of purchasing those ingredients on this list so that you know how much it costs you to create it. Most restaurants price their menu items within the 25 to 30 percent mark of the cost of the ingredients. This means you will add up the ingredients and then add an additional 25 to 30 percent to that price. This should give you enough of a profit to maintain the recipes.

You will need to take into consideration the economic aspects of the area you live in as well. If things are tough and people don’t have as much money in your area to enjoy going out to dinner, then you should do what you can to lower your prices a bit even if that means using lower quality ingredients as substitutes. Never use lower quality ingredients for the entire recipe, though; only change one or two ingredients per recipe and make sure you have your staff taste it to see if there is much of a difference.

If you do this right, you will find that you can set your menu prices in just the right area that people won’t mind spending the money for the food they are getting. It also means that more people will be able to come to your restaurant and enjoy your food even if their financial life isn’t at the top like it was a few years ago. You have to give and take a little here and, when the economy goes up, then your food prices can go up a tiny bit as well. Most people won’t even notice, as long as the food is good and the environment is right.

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