Hi and welcome to The Foodie guy dot com....

Thanks for joining us in our Managing with an entrepreneurial

mindset series....this podcast touches on Critical decision making.

our series focuses on Managing with ownership.....this podcast

hopes to provide a better understanding on Menuing and Pricing in your operation.

Your menu and item pricing strategy is not only a big factors in getting customers in the door but also directly affect your restaurant’s profitability and ability to keep the doors open. Earlier in my Blog I talked about QUALITY. Whether Quality in Service or Food…, the customers must feel that there is value in the goods or services they are receiving and paying for.

One mistake most operators and chefs make often is that they fail to include all costs associated with getting the menu items to the table. When Pricing an item you must include all costs associated with getting the plate to the table. Raw cost of the product, Labor and all other direct costs must be included. Our food and beverage industry operates off much smaller margins than other industries, typically an ideal food cost percentage hovers around 25-30%.

Ideal Food Cost Pricing Formula:

Raw Food Cost of Item and Other Costs plus Desired Food Cost Percentage equals Price

Other Factors you must look at when putting together your Pricing strategy are:

Competition Pricing

What others in your Market are charging for similar menu items. Today there are several companies that will provide this data together with analytics that will also help determine your menu profitability at different price points.

Demand-Driven Pricing

If the said menu items are in high demand in your market…your patrons will be willing to pay a premium for the Menu Items.

left digit effect Pricing or what is called Rounding to the Nines

As a final step you may want to use this strategy in your menu pricing as a way to instill perceived value to your customers…This method of not pricing items in round numbers is also called "Odd Pricing". Price your menu items to the nearest 9’s…ex. Instead of pricing an item to a round $4.00..price it to $3.99.

As a final word…..When Menu Pricing you have to make sure you are covering “all” your costs, also that your overall menu pricing is well balanced and that there is an effective customer “value” proposition

I hope this short Podcast was helpful For more Please Check for the next podcast on our series Managing with an entrepreneurial mindset.Remember that our website thefoodie-guy.com features our 5 most recent podcasts…for access to Our entire library please follow the link on our Podcast page or you can also listen to this TheFoodie-guy.com podcast on Spotify, Amazon Music, True Fans, Fountain and Podcast index thanks for listening

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