Its no secret that I’m obsessed with Profits.
Always have been since running my restaurants and now, I’m just as obsessed for my clients and other restaurant’s profit.
The alarming fact is, so many restaurants DON'T have a Profitable Menu. Some items may contribute a decent profit, but as it turns out, far less profitable menu items are bigger sellers that are stealing sales from the More Profitable Items. When this happens, the restaurant is just spinning wheels working just as hard for Less Profit. That’s why I say, you can have a busy restaurant and still not be making any money.
Why, when there’s a simple solution?
Listen to today’s episode.
It will not only give you the step by step detail on finding out the profitability of your menu, but what to do about it if its Not!
Don’t make the same mistakes so many restaurants are making with their current menu or new menus, as often as they change. Now’s the time to become obsessed with profit and your own restaurant menu.
By the way, if you enjoy the podcast please subscribe on iTunes and if you find the content helpful, please leave a review.
Now go out there and Rock Your Restaurant!
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EPISODE #90 TRANSCRIPTION
[Start of Transcript]
You’re tuned in to the Restaurant Rockstars Podcast. Powerful ideas to rock your restaurant, here's your Host Roger Beaudoin.
Hey there! It's Roger from Restaurant Rockstars; if you're listening to this you're either owning, managing or developing restaurants. If so, I've got to tell you that far too many people in this business confuse the business they're in, they think they're in the restaurant business selling food and drinks.
But the reality is they're in the business of running a business and the bottom line is PROFIT. You heard that right there are thousands of ways to lose money in this business the restaurant business is probably the most challenging business I know and if it's not approached as a business first, you're in for lots of headaches and pain.
That's where the subject of profit comes in; this episode is all about maximizing profit in your operation most of which comes from your menu, there is a right and a wrong way to approach your menu from first design, to ingredients and item preparation to appeal and variety to the customer. All these things are important but the most important thing is, does this menu make your restaurant as much money as possible? Listen to this episode and find out.
You know I've always been profit minded and I believe so strongly that this is the only way to approach the restaurant business. Really it's the only way to approach any business. I've worked with several clients lately and quickly discovered that their menus were just not profitable yes, they did have a few items that contributed a decent profit and yes certain items by category were the most profitable in that category. But the bottom line here is in each case, there were several far less profitable items that were bigger and more popular sellers. I've come to the conclusion because I've seen it far too often that restaurants are approaching menu design the wrong way.
I've seen restaurants copy items from other restaurants, even close competitors and price the items exactly as they saw on their menu without actually costing out each ingredient in those dishes. I've seen items added to menus because the owner or managers like to eat those dishes. I can go on and on here the point is there is really only one way to maximize profits from your menu that is costing out each dish right down to the garnish, if it goes on the plate and costs you money, you should be costing it out.
Once you've done this, you should run a Product-mix report. Any point of sale system has a Product-mix function; all you do is plug in a date range. I recommend the last six months to get a lot of data but the last three months will work if you had a menu change around that time.
The P-mix report is going to show you every single food, drink and retail item you sold over that date range. It's going to show you the total dollar amount of sales for each item. The price you charge the customer for that item and most importantly the total number of those items sold. This is really valuable information because it's going to show you which items are your biggest and slowest sellers.
Armed with this information you can easily compare popularity with profits item by item. Now you know if you're making as much money as possible in your restaurant or spinning your wheels were just as hard serving low profit items as maximum profit items simple idea right? If you find out you're losing a good amount of money on your menu, you can have a few choices. You can selectively raise prices on the more popular less profitable items. You can try changing the recipes or using different less expensive ingredients those items or more closely monitor portion controls of those items. As I've also found many in consistencies in portion sizes when many different people in restaurants are making the same dish.
But here is my best recommendation, start over with a whole new profit minded approach, design a new menu where every item category by category contributes a very similar if not equal profit. It's realistic and it's possible I know because I've done it with many menus over the years in my own restaurants.
Do this and you won't care what your restaurant is selling as long as it's all selling and you're moving the inventory without waste or spoilage if this episode caught your attention, I have a simple turnkey solution it's all in my Book, Rock Your Restaurant available in a PDF if you like to read or an audio version if you like to listen. Both versions offer simple to understand audio tutorials that teach you all the critical numbers you need to know to maximize profits in your restaurant and turnkey automated spreadsheets that do the math calculations for you. It couldn't be simpler. I hope this Podcast give you food for thought and your gears are now turning on how to really rock your restaurant.
Thanks for listening to The Restaurant's Rockstars Podcast. For lots of great resources, head over to restaurantrockstars.com and while you're there, download a copy of the book, ‘Rock Your Restaurant’ it’s a game changer, See you next time!
[End of Transcript]