What's the best way to price and portion your menu items?

1 Know your costs

The first step to pricing your menu items is to calculate your food cost percentage. This is the ratio of the cost of ingredients to the selling price of the dish. For example, if you spend $3 on ingredients for a pasta dish that you sell for $12, your food cost percentage is 25%. You should aim for a food cost percentage that covers your overheads, labor, and profit margin. The industry average is around 28-35%, but it may vary depending on your type of cuisine, location, and market.

2 Know your customers

The second step to pricing your menu items is to understand your customers' preferences, expectations, and budgets. You can use market research, feedback, and sales data to identify the most popular and profitable dishes, as well as the ones that need improvement or removal. You can also use psychological pricing strategies, such as anchoring, decoy, and value perception, to influence your customers' choices and perceptions of value. For example, you can offer a higher-priced item as a reference point, a lower-priced item as a bargain, or a bundle of items as a deal.

3 Know your portions

The third step to pricing your menu items is to control your portions. Portioning is the amount of food you serve for each dish. It affects your food cost, waste, and customer satisfaction. You should standardize your portions by using recipes, measurements, scales, and tools. You should also train your staff to follow the portioning guidelines and check the quality and consistency of the dishes. You should also consider your customers' preferences and expectations when deciding on your portions. For example, you can offer different sizes, options, or substitutions to cater to different needs and tastes.

4 Know your competitors

The fourth step to pricing your menu items is to analyze your competitors. You should know how they price and portion their dishes, what their strengths and weaknesses are, and how they differentiate themselves from you. You should also monitor their changes and trends in the market. You should use this information to benchmark your own prices and portions, and to find opportunities to stand out and add value. For example, you can offer something unique, special, or seasonal that your competitors don't have.

5 Know your goals

The fifth step to pricing your menu items is to align them with your goals. You should have a clear vision of what you want to achieve with your menu, such as increasing sales, profits, customer loyalty, or awareness. You should also have a way to measure and evaluate your results, such as tracking your revenue, costs, margins, and feedback. You should review your menu regularly and make adjustments as needed to optimize your performance and meet your goals.

6 Know your trends

The sixth step to pricing your menu items is to keep up with the trends. You should be aware of the changing preferences, demands, and behaviors of your customers, as well as the innovations, regulations, and challenges in the industry. You should be flexible and adaptable to respond to these changes and opportunities. You should also be creative and proactive to anticipate and create new trends. For example, you can introduce new ingredients, flavors, or techniques that appeal to your customers and showcase your skills.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?