Your Menu, Make it Work for You

As a new FohBohist, I thought long and hard about what topic to cover in my first post. In this economy, I want to focus on tips operators can put into action right away that will impact their bottom line.

I have probably worked with more than 1,000 restaurant owners at this point in my career, on top of the 20 years I spent in restaurants. Through my experience I have seen one mistake repeated over and over again: menus developed without cost or profit consideration.

I see restaurant owners spend many months planning their new restaurant, what it looks like, the equipment needed, how many employees they need, their management team, down to every detail, so they can bring their dream restaurant to life.

Then they find themselves one month from opening their doors and quickly, without the same thought and care they gave to planning the new business, they literally throw a menu together.

The process is usually very subjective and involves the development of recipes and dishes, presentation and sampling, then a few quick judgments about what fits the restaurant’s mold. The decisions are based on presentation and taste alone, with complete disregard to whether or not they will make any money.

Want to know what’s missing from the picture?

Recipe costing cards!

The reality is most independent restaurant owners don’t even know what each dish they put on a plate costs to serve, forget about the side dishes and sauces.

I’m not exaggerating.

Why is this a huge mistake? Recipe costing cards tell you if your menu items are going to bring in any money – the lifeblood to any business.

If you’re a restaurant owner who doesn’t have recipe costing cards, you may say, “I’ve got all the costs in my head.”

You might not feel like you have to put them on paper because you inventory and place the order for every food item needed to produce the menu, so you think you’ve got a good idea of what things cost.

This can kill your restaurant. Because what you think the costs are and what they really are is usually very different.

I guarantee if you put recipe costing cards in place right now, you’ll cut your food and pour costs, positioning yourself to better ride this economic dip.

I have a template of a costing card that works well for most operators, but before I share it, let’s try creating one here on FohBoh. Who wants to start? I’ll send a copy of my template to anyone who jumps into the conversation with their thoughts.

Tags: menu, profits

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Comment by David Scott Peters on June 10, 2009 at 10:28am: Hi David, My answer is you need to be updated on a monthly basis. You can do it with an excel spreadsheet or inventory management program... it really depends on how much time you have to keep it updated. For most of my members, I recommend using excel. Hope that helps. DSP

Comment by David Siegel on June 10, 2009 at 9:39am: I costed out my menu when the restaurant first opened a year ago, but with changes made weekly based closely around seasonal ingredients with wildly fluctuating prices, I have been unable to keep up with the leg work. It hasn't been a problem, per se, as my food cost is always in line, however in the interest of keeping tight control, I would love to know your opinions about costing and maintaining cost figures on a constantly changing menu. Any suggestions are welcome!

Thanks,

Davic

Comment by Craig Pendleton on December 31, 2008 at 9:31am: It is amazing how many "restaurateurs" are enamored with the restaurant business but forget that is a business. I've got clients in major accounts that have a basic idea of food costing but never put it into practice unless forced. For some this falls into the category of steak counts, sales reconciliations, menu mix and steps to service in controlling actual costs and potential costs. You're in business first or you're not in business later!

Comment by David Scott Peters on December 23, 2008 at 8:25am: Sheri, the answer is yes and no. Yes you need to fill out a recipe costing card for every item, including batch recipes. Yes that includes daily specials. Yes you need to update them because prices change. No you don’t have to change them every order that get delivered. You do need to update the pricing at least every quarter. The best solution is to set them up in an Excel Workbook, so that every time you take in an order you update the price and then the cell change automatically in your recipe costing cards, use the inventory system that came with your POS system or invest in a third party software program that will do the same thing.

I would be happy to walk you through the process… go to my profile page to get my contact information and give me a call. Also, you’re question started off with “…if we.” Let me make sure we are perfectly clear on this point… it’s not “if we,” it’s WE MUST! It’s vital to your success.

Comment by Sheri on December 23, 2008 at 8:17am: I am admittedly no menu expert or even knowledgable restaurant operator. My husband runs the kitchen and I know he doesn't have any sort of costing cards. My question is...if we implement costing coards, do you have to fill them out every time you get a new order in? Prices have been flucuating so much from month to month, how do you maintain the cards efficiently?

Comment by Tressa Mills on December 22, 2008 at 5:45am: You're too kind... you are the restaurant expert... Your post was right on target!

Comment by David Scott Peters on December 21, 2008 at 8:36pm: Tressa, I was going to respond with other strategies and then realized I was preaching to a menu expert. Thanks for weighing in.

Comment by Tressa Mills on December 21, 2008 at 6:31pm: Even when they DO figure out their costs, I know the 2 hardest things for most restaurateurs to do is to raise their prices or take things off the menu. While raising your prices (which for most is long overdue) just pick 1 or 2 slow moving items that you can lower the price on. It helps your staff to be able to say, "no, we didn't raise everything....we tried to lower things whenever possible"

Also, if you are scared to take things off the menu, go ahead and keep them available to serve. At least you'll get the credit for keeping them around for your select regulars that insist, and yet you won't be using up your valuable menu marketing area. It will allow you to focus more on selling your higher profit items.

Comment by David Scott Peters on December 19, 2008 at 8:02pm: Don that is a very interesting tact, one I have never heard before. That's the great thing about this business... you never stop learning. Thanks.

While I love short cuts, I am one that believes to have a really big impact on your profitability from doing an item by item sales mix report, you really need everything costed out. While it is not rocket science, it is arithmetic and if your numbers are off... your result will be to.

Again, great ideas Don!

Comment by Don Odiorne on December 19, 2008 at 2:16pm: If you can get operators to do recipe cards and costing they really willl have their eyes opened up. My favorite way to get a handle on what entrees were having the most effect on what my overall food costs was to take the waitperson that wants some extra hours and develop a spreadsheet of menu items. Then that person does a tally of each nights receipts for at least one week per month by menu item. It was usually then that I could add up the entrees for example and find out my best sellers. Then I only needed to do a few recipe costing cards rather than the undaughting task of completing one for every appetizer, side dish, dessert and entree. You might miss some high cost items, but guests are remarkably skilled at ordering the items that have a high food to sales price ratio.

The other suggestion is digital pictures of each dish posted near the prep areas. Each cook had a different idea of the portion size, or amount of dairy or cheese to add to make it their signature dish. To get costs back in line we even periodically made the cooks use a portioned cup to weigh or fill full. Usually they found that they were over portioning versus the recipe and costing the restaurant money without the ability to charge more.