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Why You Should Use Menu Mix for Menu Pricing

menu pricing Oct 29, 2019

Your POS system holds some great power in its reporting capabilities, including when trying to figure out your menu mix. For example, your PMIX report in your POS system can be very useful in menu engineering and menu pricing efforts? In this video, I explain all about that PMIX report. 

Menu engineering is a really popular topic among restaurant owners, especially restaurant owners who are trying to find ways to make more money on their menus. And I'm excited to tell you that something that will help you in your quest to engineer your menu is right there in your POS system. Nope, it's not just an expensive cash register. It has important reports that can help you run a more successful restaurant. 

In your POS system is some really important data in what is called a PMIX report, or a product mix report. The PMIX report, which is the most important report in your POS system, is also known as a velocity report, an item-by-item sales mix report. It lists every single item you sold in a single day.

This report is important because it tells you what your ideal food cost should be. It's not based off a ridiculous three to four times mark up on your food. That is absolutely wrong. You're going to have items that have a high cost of goods sold and items that have a low cost of goods sold. And don't even get me started on average food cost. There is no such thing as average when it comes to finding your food cost. You're not the same as anyone else and no one else should be setting your standards to fall down to or up to. An average is everything between a fresh-caught seafood restaurant and a buffet pizzeria. Don't lock yourself into that zone.

If you match up the PMIX report with accurate, up-to-date recipe costing cards, you're going to find your ideal food cost. Reminder that your ideal food cost is what it would cost if you had no waste, no theft and no spoilage. And of course this doesn't exist since that would be perfect and there is no such thing as perfect.

The PMIX report is part of a math formula called a weighted average. The weighted average allows you to sell one item at a 99% food cost and one at 1% food cost. A frozen appetizer might have a 45% cost of goods sold, but you sell the heck out of your fresh-cut French fries that have a 5% cost of goods sold. So if in a calendar month you sell a hundred items and 99 of them are at a 99% and one at 1%, what would your food cost be? 99%! If you sold 99 items at 1% cost of goods sold and 1 at 99%, what would your food cost be? 1%!

See, your food cost has everything to do with what your customers purchase based on what it cost you and how much money you bring in. So we're not setting the menu prices at an average of 34% food cost all the way through. You need a mix of items that help you hit that ideal food cost. With the knowledge from your PMIX report, you can engineer your menu to make sure you're selling the most profitable items that help you achieve your ideal food cost - or get really close to it.

If you would like to learn more about the importance of systems and how to run a restaurant, read our free special report, Is Your Food Distributor Screwing You? 5 Things You Can Do Now to Lower Food Cost. Download it here. Be sure to visit my YouTube channel for more helpful restaurant management video tips. 

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