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How to Create a Menu That Improves Average Restaurant Profit margin

Controlling Costs, Restaurant Operations - September 09, 2020 Written By: Krista Dinsmore

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The hospitality industry is incredibly competitive. As a result, many restaurant and bar owners get lost in trying to do too many things at once, and it’s often their menu that suffers the most.

To try and reach a broad customer base, many restaurants and bars decide to offer an extensive menu that appeals to everyone. They offer a huge range of dishes in an attempt to attract customers away from their competitors.

These large menus often create unexpected issues for restaurants. Not only are they stressful for guests, they impact all areas of your business in a negative way.

They prevent your kitchen from specializing in certain high-quality dishes that really attract customers, they lead to poor food inventory management control which dents your profits, they make it more difficult for your employees to upsell products, and they increase the likelihood that your business will sell low-profit dishes.

Why simplifying your menu is a good idea

The best restaurants in the world have limited menu selections for a reason. They know what they are doing and they do it incredibly well (which attracts guests), but, on top of that, it helps them to have more control over the production of high-profit products.

Simplifying your menu can help you narrow down the dishes you truly excel at creating and that your customers love, but also the ones that are high profit and high popularity. The dishes that are popular and also highly profitable for your business are the real stars of the show - these are the products you need to be focusing on.

In short, having a simplified menu means your restaurant can provide dishes of exceptional quality that your guests keep coming back for, you are able to reduce your inventory and save significant amounts of money, and you can focus on high-profit items that push your revenues up.

Things to consider when simplifying your menu

To truly access the benefits of optimized profits and improved guest satisfaction from a simplified menu, it’s not as easy as just keeping the dishes that you think customers like and deleting the rest.

Your restaurant or bar is going to have to put some real thought into it, using data to analyze which dishes are popular and which ones bring in the highest profits. Here are some tips to help you simplify your menu in a strategic manner.

Choose your dishes wisely: There are a few things you will have to keep in mind when choosing which dishes will be on your new menu: sales data, profit data and guest feedback. It’s a mistake to just choose the dishes that you ‘think’ perform best. Evaluate your past sales data and receive feedback from customers to learn what your restaurant’s most loved dishes are, and which dishes your customers would like to see introduced in the future.

Analyze your inventory costs and your new restaurant pricing: Making sure your kitchen is efficient and your business is profitable is key to running a successful restaurant or bar. Use inventory management software to work out how much each dish costs to create, and then use that data as a guide for how much you should be pricing the new dishes on your menu.

Design your new menu in a way that increases profitability: Did you know that the design of your menu should be profit-focused? Aspects of your menu such as the layout, descriptions and item placements can all impact profitability. Our best advice is to ensure that you draw attention to your most profitable dishes, and take extra care writing dish descriptions that entice customers. Research by Dr. Wansink (as published in this New York Times article) increased sales by as much as 27 percent.

Interested in more information on how to simplify your menu for improved restaurant profits, or want to enquire about how Sculpture’s innovative inventory management solution can help you control costs? Contact us today. Our team of locally-based industry experts would love to help.

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