Trim Your Budget By 10 Percent Through Menu Design

Careful menu planning and cost analysis can help restaurants spend less

What many restaurant owners lose on their bottom line starts with a few wasteful pennies dropped here and there. For instance, do you really need that inedible garnish that is usually moved to the side upon delivery? By leaving it out, you could save pennies of profit per dish. Are you ensuring that your portions are controlled? A little extra on the plate—or even a little less—can frustrate consumers. Impressions that the consistency is off can cost you dollars, and irritation for everyone.

Simply reviewing the design of your menu can set you up to save money before you get to the portions and garnish mishaps. Studies have shown that diners hold menu attention for 90 seconds. That doesn’t give you a lot of time to highlight the items from which you stand to gain the most profit. If your menu descriptions read like a book, they aren't going to captivate the diner who's used to social media. Placing the names of the items right in their scope of view and highlighting them with an inbox is a general recommendation. Having the server or guest attendant draw attention to your most profitable items also helps lead the wandering eyes directly to these dishes.

Keep your menu simple. Have core ingredients that are able to be dovetailed throughout. For instance, if you are featuring chicken tenders for an appetizer and a chicken breast as an entrée, buy your chickens whole. It will save you money in creating your own stock and utilizing the rest of the bird for a soup and/or wings.

Buy produce in season. This helps not only in consistency, but in costs as well. With the school year starting and with healthcare costs on the rise, increasing prices can take the profit right out of some dishes. During these times, take advantage of pre-buying from your supplier when they offer rebates. These rebates will keep your product at a stable price. Also, when designing your menu items, keep in mind that you need to “cross-utilize” your product as much as possible without coming across as repetitive. Cross-utilizing your product will help you manage your costs and waste while increasing your sales and gross profit.

Create more categories as opposed to more menu items. Studies show that having fewer options actually creates a higher level of interest for the consumer. Execute a few menu items extremely well, as opposed to executing many menu items that are mediocre. Three to four of your top sellers in each category account for 60 percent of your sales, regardless of how many items you offer. In addition, a smaller and more specific menu makes execution for the entire restaurant easier and more efficient. The kitchen isn’t bogged down with a massive amounts of product and items to prepare. The service staff has less to memorize, which in return will allow them to spend more time explaining the dishes in depth. Most importantly, the consumer will feel more confident in their dining experience and your menu while not losing their menu retention. With that being said, the exception to this rule is the appetizer category. It should have eight to 10 items offered, while most categories should have three to five.

Menu items can be classified into four types based on their profitability. Theses types are your “plow horses,” “dogs,” “stars,” and “puzzles.”

Plow horses: These items are high in popularity and low in profit. They are beneficial in the sense that they give the consumer a sense of value. They also tend to be easy to execute.

Dogs: These items are low in popularity and low in profit. Eliminate items that turn out to be dogs, as these can be profit busters.

Stars: These items are high in popularity and high in profit. These are the items you want to stick to when trimming down your menu.

Puzzles: These items are low in popularity and high in profit. A few of these item are good to have. They can be your restaurant's branded items that set you apart from your competitors.

When placing dishes on your menu in their specific category, remember that their order of appearance is key. It's helpful to place the top three highest profiting items of each category in the first, second, and last slot within the category. The items that profit less should be placed in the middle.

Sometimes it's necessary to increase the prices on your menu. There are a couple of easy techniques you can use that will not overwhelm your customers. Menu items priced less than $5 just increase to the next 25-cent increment. Menu items in the $5 to $10 range will increase by 50 cents. Menu items $10 and above will increase by $1.

Alternatively, you can use the “nine theory,” which is also thought to decrease price intimidation. It is essentially the same technique as above, except all your prices end with the number nine. Here's an example of a few price changes that make use of the nine theory.

  • Item that was formerly $2.50: now $2.79

  • Item that was formerly $6.10: now $6.59

  • Item that was formerly $11.15: now $11.99

Lastly, know your market. Things to consider when looking at your target market include age, gender, race, and the average household income in the surrounding area. Build your menu around customer likes and demands. You should offer what they've been proven to enjoy, not necessarily what you prefer.

The opinions of contributors are their own. Publication of their writing does not imply endorsement by FSR magazine or Journalistic Inc.

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