How to Price Your Restaurant Menu Effectively
Menu planning is one of the most important factors that can make or break a restaurant business. There are a variety of things that needs to be kept in mind before finalizing the menu.
Target Audience – Before deciding the pricing, you should first understand the target market of your restaurant. Just like any other business, the secret to a successful restaurant is to provide customers value for money experiences, so that they keep coming back again and again.
Business Strategy - More footfalls or more profit per customer – you should determine the right business strategy for your restaurant. While menu pricing planning, you must consider how serving more people will change your overhead expenses.
For instance, if you serve twice as many people, some of your expenses will also increase. However, they will not increase exponentially. Therefore if there is a capacity to serve more customers (where the dine in duration is relatively shorter for customers – such as for QSR or casual dining), it is prudent to adjust the menu pricing accordingly.
Food Costs – In order to keep profits up and prices affordable for customers, it is essential that you determine the correct food costs of each item of your menu. The price you are charging should not only include the cost of raw materials but also staff costs to get that dish prepared, costs of restaurant décor and regular maintenance expenses etc.
It is very important to keep this cost as low as possible without affecting the quality of the food that you serve. The best way to do this is through proper planning and by having an efficient purchasing method.