A menu for a restaurant

Menu designing tips and techniques that maximize your profits effortlessly

2021/08/19
By Nadine Hashem

When it comes to selling, needless to say you need to make profits for your pocket or you wouldn’t even bother. 

 

Restaurants sell their platters for a certain profit. The purpose of their work is to maximize this profit.

 

How to maximize profit? 

 

There are several options and possibilities but one of them lies in the menu itself. 

 

You can definitely use your menu to increase your profits and make the most out of your sold plates. 

 

It goes without saying that any restaurateur starts with calculating the cost of each platter

 

But beside calculating the cost, your menu is the most powerful marketing tool.

 

At the end of the day, your guests are coming to you for your food. 

 

A customer spends an average of 1 minute and 49 seconds viewing the menu.

 

 

You have to make sure that this time spent is for your benefit while they are checking the prices and the description of each platter. 

 

How to use your menu to maximize profits?

 

Use menu engineering

 

Menu engineering is the study of the profitability and popularity of menu items and how these two factors influence the placement of these items on a menu for the purpose of increasing the profitability per guest.

 

 

Menu engineering helps you eliminate poor performing items and highlight the most profitable ones.

 

When engineering your menu, you should be knowledgeable of your customers’ taste. 

 

The person involved in the menu engineering should be well aware of the costs and profitability of each item.

 

For additional information about menu engineering, check out this blog
 

What are some menu psychology basics?

 

When designing your menu, take into account certain concepts:

 

Golden triangle: People tend to look in the middle, then the top right and after the top left corners. 

 

Remove currency signs: Researchers have found that putting the currency sign reminds people of money so they’ll automatically start thinking abou prices and how to reduce their bill. 

 

 

 

Menu colors: When they see green it makes them think of fresh food. Red is an attention grabber so use it to draw attention toward your most profitable platters.

 

Stay away from blue because it’s the least appetizing color.

 

 

 

Profitability vs popularity 

 

Restaurateurs look at food cost percentage which is the value of the food costs to revenues expressed as a percentage and the gross profit margin of each item to determine its profitability. 

 

To calculate food cost percentage for a certain period, take food costs, divide it by sales for the same period and multiply it by 100. For a menu item, take the plate cost, divide it by the selling price, and multiply it by 100.

 

For instance: 

 

Labor costs = $15,000

 

Monthly expenses= $10,000

 

Profit goal = $7,000

 

Total sales = $50,000

 

Then, your ideal food cost percentage is:

 

100 – ( ($15,000 + $10,000 + $7,000) / $50,000) )

 

100 – (0.64 x 100) = 36%.

 

To calculate the cost of a plate: Include the raw ingredients cost. Usually, restaurateurs add 10% for waste. 

 

Let’s assume a steak platter with the below ingredients:

Steak: $3

butter: $0.50

Seasoning: $1

 

The raw material cost is $4.5.

 

Add 10% waste: the total is $4.95. 

 

Now, it’s time to figure out the price. 

 

Food cost / targeted food cost = 4.95/0.36

= $13.75.

 

For profitability: (selling price - cost of goods) / selling price. 

 

The gross profit margin= (13.75-4.95)/13.75 = 0.64 = 64%.

 

 

For the popularity, you can easily monitor the orders made for each platter using the POS reports to identify in which category from the below ones each platter belongs to so you can determine its destiny. 

 

 

Categorise your menu items

 

After figuring out the profitability and popularity of each item, it’s time to categorize them. 

 

There are four categories of menu engineering items:

 

  • Stars: High profitable and popular items.
  • Plow-horses: Very popular but not very profitable.
  • Puzzles: High profitability but low popularity.
  • Dogs: low profitability and popularity.

 

Use these categories to draw attention to your target platters.

 

Place the stars in the golden triangle while you should use red color  and descriptive language with puzzles to catch the attention.

 

For the puzzles, you can try to add an ingredient or change the description. Try promoting them on social media. 

 

Rework your plow-horses recipes to lower their costs. Replace an ingredient or make the portion smaller.

 

Consider pairing them with high profitable drinks.

 

Before removing your dog items, consider reinventing them. 

 

Follow the market’s trends

 

With different social media platforms especially Tiktok, even food has become a trend. 

 

Have you ever heard of baked feta pasta or avocado toast and most recently ricotta toast and pasta chips?

 

All of these food items are a trend so use them to drag more customers in and to increase your profits.

 

You can definitely check your audience's willingness to pay for these items but usually they are willing to pay more for them while they don’t necessarily cost more.

 

Keep an eye on POS data

 

Always review your POS reports concerning food costs and most profitable ones as well sales for each item. 

 

These reports are the biggest indicator of the success of your strategy and menu engineering. 

 

This review should be periodically performed and if there is no improvement in the figures, your strategy should be revised. 

 

Your menu is a powerful marketing tool that brings you the most revenues. If you use menu engineering techniques along with a smart POS, you’ll definitely see those profits increasing.

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