Menu Engineering For Profit
Menu Engineering for Maximum Profit
Let’s talk about engineering. No, not that kind of engineering, I’m referring to the type of engineering that can increase your restaurant’s profits. Menu engineering refers to the process by which you create the perfect menu that keeps your customers coming back for more.
Your menu is the lifeline of your restaurant and should be reflective of your concept, décor, and location. A well-executed menu will increase profitability by subconsciously leading customers to buy what you want them to buy. And in today’s digital world, your menu needs to be mobile friendly.
Too often, restaurant owners are focused on what’s happening in the moment rather than focusing on strategic business decisions that optimize profitability. As such, here are three areas where menu engineering can improve your restaurant’s profits.
The menu is the most important predictor of profit in your business. It’s likely that 25 to 35 percent of your menu items are losing you money in the form of inventory or are not in alignment with your brand. By costing your menu, you can ensure that your listed price will generate maximum profits. Costing your menu means breaking down every item to its individual ingredients to determine the cost of each item. This is a necessity for every menu item to account for every cent of food costs, because engineering a menu depends heavily on the profitability potential of every item. Once you’ve finished this process, you can then focus on categorizing your menu items according to profit levels.
The design of your menu can ultimately be as important as what is on it. A carefully crafted menu design will pay off over the long haul, so be sure to pay special attention to the organization of items on it. When designing your menu it’s important to consider your customer base and use visual clues to highlight the items you want to sell the most. Something as simple as putting a box around a menu item provides a visual cue to drive your customers attention to that section of your menu. You also want to avoid putting prices in the right hand column, instead, consider putting prices right after the item description. Menu items that have evocatively written descriptions keep your customers coming back. Even if it is just spaghetti and meatballs, customers will think they can only get it from your restaurant.
Menu prices are the backbone of your sales so it’s important to consider many factors when setting your pricing. First, be aware of the cost of the raw ingredients for each item. Missing on this one can be a costly mistake. Second, consider what your competitors are charging for similar items. Last, you’ll want to consider portion size and labor. If your prices aren’t competitive and customers don’t feel that what they get is worth the cost, they won’t come back. It’s also important to assess gross profit on each item and determine how each item contributes to your overall menu. If you are considering increasing prices for menu items, remember that there are ways to increase profitability without increasing prices. By focusing on menu item placement, item elimination, and sales staff training on items that aren’t selling well, you can increase profit.
It’s important not to lose sight of the important role your menu plays in the success of your restaurant. It can drive profits better than any other commodity you have. And, even if you’re not an engineer, everyone is capable of re-engineering his or her menu.
If you’re interested in discussing strategies to increase the profits of your establishment, contact me for a free business consultation