| Menu pricing is one of the most important decisions | | | | a consistent overall food cost which, when combined |
| for any restauranteur. It may look easy, but the fact | | | | with proper pricing, will positively impact on your |
| is that you cannot price it simply by your intuition. It | | | | profitability.* It's also important to remember there |
| requires consideration, observation and asking certain | | | | are other costs of operating a restaurant that need |
| questions. For instance, do you remember your last | | | | to be taken into account to determine optimal pricing |
| visit to a market or a mall as a buyer? How many | | | | for menu items. These include the cost of labor, rent |
| goods had an acceptable price enticing enough to | | | | and debt.Tips on Pricing Alcoholic Beverages |
| motivate you to make a purchase? In reality, pricing | | | | Now, let's see how to price the alcoholic beverages |
| must be an amount that someone else is ready to | | | | on the menu:* Beverage costs are generated in the |
| pay for your service or product.Creating a restaurant | | | | mid-20% range of beverage sales. As for food, |
| menu is tricky business. Not only does it involve | | | | these can be higher or lower. Fine dining |
| selecting attractive and popular dishes, but also pricing | | | | establishments may run up to 40%. On the other |
| them competitively. Pricing is important not only to | | | | hand, restaurants serving draft beer may run as low |
| make the business profitable, but also to offer good | | | | as a 15% beverage cost. So, it's important to find |
| value to customers to win them over.Tips on Pricing | | | | out the industry averages by comparing your cost |
| the Food ItemsLet's see how to price the food | | | | percentage to restaurants with similar menus and |
| items on the menu:* Generally, successful restaurants | | | | service levels.* Beverage costs, like food costs, must |
| keep the food costs in the range of 27 to 32% of | | | | be constantly monitored, by comparing with previous |
| food sales. These percentages can be higher or | | | | performance, with other restaurants and the industry |
| lower depending upon the type of restaurant. | | | | averages. This will help you to competitively price the |
| However, to be more accurate, it's best to compare | | | | items and increase profitability of your total |
| your cost percentage with restaurants having similar | | | | operation.* Although you'll need to cater for normal |
| menus and services.* While calculating the cost of | | | | taxes, you must be clear about additional taxes in |
| food, all ingredients must be included. Work out the | | | | your local jurisdiction, as they may impact beverage |
| cost of each recipe for each menu item and don't | | | | pricing. In Philadelphia, for instance, there is an |
| forget to include things, like spices and garnishes in | | | | additional beverage tax of 10%.If you take the |
| the cost.* Your recipe costs for items and sales | | | | above factors into account while pricing the items on |
| prices will determine whether your food cost is in line | | | | your menu, you'll certainly succeed in running a |
| with the industry averages. This will also help in | | | | profitable restaurant.Lydia Quinn writes for R & I |
| monitoring your performance and analyzing problems | | | | Solutions, makers of Cost Genie restaurant costing |
| and trends.* Ideally you should be able to determine | | | | software. |