Menu engineering is absolutely awesome. You can reduce your food cost by three to seven points when done correctly the first time you use it. Right now, that probably seems like exactly what you need. But let me caution you, menu engineering is not your secret weapon to lowering your food cost. Before you can engineer your menu for max profitability, here are 10 things you have to have in place.
Before you can engineer your menu for max profitability, here's what you have to have in place.
Number one, you need to have a budget. Without a budget, how do you know where your food cost needs to be? You cannot operate your restaurant based on an average 34 percent food cost. You are not “average.” Your restaurant is individual in its location, price point, style of service, the quality of products you use and the atmosphere you offer. A budget tells you where your target needs to be. It’s different for every restaurant and is based on your prime cost (total cost of goods sold plus your total labor costs, including taxes, benefits and insurance). Find your target so you know what to engineer your menu to.
Number two, you cannot do menu engineering without recipe costs cards. Without up to date, accurate recipe costing cards in place, you could actually re-engineer your menu to hurt your business.
Number three, you have to program your POS system properly. All too often POS systems don't program every key for every item on the menu. Let’s say you're a Mexican food restaurant, and you sell a single tamale, a single taco and so on, and you have no key for it, so it goes in as open food. How do you know how that affects your mix, what your guests are ordering? Another example is a breakfast place with spam, ham, bacon and turkey bacon as a choice for a meat. If you don’t know which one is being ordered for each set of eggs, you don't know what the food cost is with each item because all the sides are in one modifier. You need to have separate modifiers for accurate food cost. A properly programmed POS system is also critical for training.
Number four, you need to have all your procedures set up step by step by step for proper training. All cooks, all prep cooks, even dishwashers who jump on the line or help with prep, have to know how to create a dish the same way every time. For profitability and consistency. Your guest want the same experience every single time.
Number five, you need portion controls. When you set up your recipe costing cards, you could have a recipe that calls for 5 ozs of French fries, but you have Lurch on the line who has the biggest hands in the world, and he puts 8 ozs of French fries on every plate that goes out. That 3 ozs adds up and will throw off your food cost AND your consistency. Portion controls are extremely important.
Number six, use a key item tracker. This allows you to track five to 15 items every shift to make sure they're not stolen. By doing so, you’re going to reduce your food cost.
Number seven, use a waste tracker. When you burn something, when you drop something, when something's stolen, when you've got a server who double orders, any mistake, any reason why you would waste product, you want to mark it down. You know the cost, and you can proactively fix it that day. If you’re looking to reduce food cost, wouldn't it make sense to reduce theft and stop mistakes? Right.
Number eight, use time and temperature checklists. You have a moral and legal responsibility to serve safe food, but it also translates to profitability. If you have a cooler taking products out of temp, you have to throw it away, which means you’re losing money. Sometimes poor management of product is a big drain on your food cost.
Number nine, you need kitchen management on all shifts. I don't care if they are a line supervisor, a sous chef, a kitchen manager, a chef, an executive chef, you need someone in charge to make sure all these important tools are being used daily and shift by shift. Any system not used on a daily basis is worthless, and you won't get any benefits from using it, so you need someone in charge, accountable, to making sure the systems are followed.
Number 10, you need to figure out your ideal food cost. Ideal food cost, or theoretical food cost, is based on your recipes: what you put on a plate, your accurate, up-to-date recipe costing cards, what you sell it for and the product mix report from your POS system that tells you how many you sold of each item. When you grab that information and put it either into software or in a spreadsheet, much like the one I provide my members called the Menu Profitability Monitor, you can find your ideal food cost for your restaurant.
All the systems I just went through are going to help you reduce your food cost before you ever get to menu engineering, which you can't do properly without these things in place. If you don't have them in place before you start work on menu engineering, you're flying blind. Odds are all the hard work you put in, all the good work you put in, if those aren't in place, will not get you the results you want or need.
If you would like to learn how to own a restaurant that doesn't depend on you to be successful, watch this free video course that teaches you three key principles to running a successful restaurant. If you're ready right now to make some serious changes in your restaurant, you can also book a 60-minute call with me where we talk about your challenges and figure out exactly what is holding you back from having a restaurant that doesn’t depend on you being in it to be successful.
Be sure to visit my YouTube channel for more helpful restaurant management video tips.
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