How to Price Restaurant Menu Items
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- Опубліковано 15 лип 2024
- Restaurant Owners... In the industry there's really only two ways to set prices on your menu and most restaurants are doing it wrong. Watch the video as I explain what these pricing models are and choosing which one is the best and tips on how to implement it.
If you want to dive deeper into this topic, check out the latest episode of Restaurant Rewind. / 833169520544987
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Thank you,
Ryan Gromfin
The Restaurant Boss
TheRestaurantBoss.com
When was the last time you raised prices on your menu?
Honestly after this video lol. I realized i was basically giving away food because i was trying to appease the customers by having affordable and good quality food
@@chefnuk5872 How have the changes worked for you?
@@Therestaurantboss they were working and finally providing sum profit and return for me but due to covid I'm slow on business as I do personal chef services.
My dream is to own & operate my own food truck and this video here is exactly what I was looking for. Thanks
Glad I could help and best of luck to you!
I think i take both methods into consideration. But this is really good stuff. Thank you.
You're very welcome!
best advice ever...opening a new cocktail tapas bar in thailand in 1 month and this has helped so much!
Glad to hear that! Let us know how the opening goes :)
- Dawn, Team TRB
Thank you so much! I’ve been in the culinary industry for years and am just now starting to venture out on my own. Your market minus model makes so much sense... I almost feel so silly having always done it the other way. Again... thank you for your videos. Makes the ominous tasks of opening a restaurant of my own a little less scary!
Wow, Elizabeth! So glad that my videos are helping you along the way. Keep it up and stay steadfast on your path.
Starting a food truck South Africa. What you said made a lot of sense. Was struggling because I used the first method. Second one.. Market- is like a breakthrough. Unspeakably greatfull
Awesome, so glad the video helped you out!! Good luck with your food truck.
Just Wana say thank you mate. Ive just started a chefs apprenticeship.. the first task I've been given is creating a simple 3 item bar menu for this establishment I'm working at. So this video is a huge help.
Hi Ryan, amazing videos great job! You help me a lot with my interviews as well for my applications! Thanks and greetings from London UK!
You are the biggest help bro… swear you’re the best
Thank you so much for all. And I asked a question about pricing earlier, and you answered me. engaging your audience makes difference, thank you again
You are so welcome!
Excellent tips. I never thought of it that way
This information has certainly opened my eyes, as I am starting a new business. I was lead to your videos and I'm very glad that I was!
Wow - thank you so much! Good luck with new venture.
Thank you for your advice !!
Short, thorough, and excellent explanation. Thank you!
Thank you so much!! We have a food truck and are really working for a banner year this year!!
Really enjoyed the video, I appreciate that you got right to the point with a couple of examples.
Glad you enjoyed it and thank you for the feedback!
Totally AGREE !!! Great video and very well explained ! 👍 Thank You sir.
Thank you!
Awesome video! Thank you so much!
You are so welcome!
Love your videos
I am totally loving your videos ♡
Glad you like them!
I dont usually comment on videos, but, this was awesome, thanks Boss !!!
Glad you liked it and took the time to comment!
Very positive notes...Thank you so much
You are welcome!
Thanks Ryan I really learned a lot from this video. I’m looking into starting a restaurant my self
Glad it was helpful! I wish you much success. If you need any coaching to help make the process smoother and the restaurant a success, consider joining our Membership program. therestaurantboss.com/membership
Love the video man. Very interesting concept.
I am looking at starting a small restaurant and looking forward to visiting your website
Make sure you sign up for free access to the Restaurant Owners Toolkit. There's a Concept Development workbook in there that would help you out! Dawn - Team TRB
Great topic
Perfect!
I love your videos.... I want to know more about your program! I am a start non-profit food trailer with a $60k trailer that is already paid for. I love your tips!
great tip
Very informative videos thank you much for sharing your expertise
You're so welcome Dale :)
Dawn - Team TRB
Thank you…market minus pricing method is realistic, practical and more sustainable.
I've watched almost all videos
Those are great
I'm owner of two restaurant and your videos provide me more knowledge about my business
Keep going
Greetings from india 🙏
Thank you for the comments, I hope you keep watching every week.
How to speed up cooking and delivery especially for delivery only model and main course? Appreciate if u can explain with example.
@@bhavikatailor6198 :(((
YES!
Great information thanks Ryan
You're welcome!
hi Ryan,
Thank you for sharing excellent material with me, Indeed it is of grt help and support.
Your videos has all flavors what we need. Thx men Stay Bless
Regards
Taimoor
Love from Pakistan
Your welcome.
Thanks for the good info!
Glad it was helpful!
-Dawn, Team TRB
Hi Rayan, I am starting out with food which are new in our target area and there is no competition. so it is very difficult to understand the market price of the target area. We have done survey of the budget they are going to spend on good food..and i think i will be the one to set a new market standard of the products. And i dont multiply by 3 or 4..what i do is take the food cost and add the calculation of fixed costs and variable costs plus the % profit that is required.
Thank you so much sir... You are awesome 😊
Thank YOU! So glad the videos are helpful.
Great info... really helpful
You're welcome!
This is a project I'm working on for my work, the first price my boss will see is my labor price going up.
I already intuitively understood this but I think so many business owners have zero idea.
Thanks so much wooooo
Good advice
Glad it was helpful!
I like you boss.. iam interested to learn in
Thank uuuuuuuu u saved my life in a business plan assignment
Hi Salma! So glad I could help.
Seems like a way of depending on others that do the actual work . Interesting at best
Hi Ryan, thank you so much for making this video! My family and i are opening a food truck very soon and this helped me understand a lot more of menu pricing. Is there by any chance a way to contact you for some help on our Menu? Thanks again!
Hi Josue! Thank you for your comment. You might consider setting a strategy session with me. You can learn more here: therestaurantboss.com/start-here/#needhelp
very enlighting. i am running a food busness from the boot of my car and knowing how much i ma spending and how much profit i make has always been a problem.
You should check out our software, BACON. It was designed to help restaurant owners know exactly what is being spent and where so you can control costs. clickbacon.com
What are some ways to find the market cost? THANK YOU FOR YOUR TIME
Look for the businesses you are trying to emulate. Take the most successful and the least successful and average it out. Market costs vary from day to day... tricky stuff. Find out if the customers are local, seasonal, or coming from other areas. Find out the cost threshold these customers will tolerate. Wish you luck.
Very informative
Glad you think so!
I was sitting in a breakfast establishment in the Phoenix metro area and found myself adding my environment/expensive into the equation. I was sat in what felt like a walkway that should have been cleared but instead to maximize space my comfort was compromised which changed my perspective on cost. All of a sudden my $12 breakfast felt like a $4 breakfast and yet I still had to pay full price. It really made me not want to go back even though I understand trying to maximize your profit some things can't be figured out with just a math equation.
Absolutely! Restaurant's aren't black and white. Guest experience is a huge part of your success factor. One of my team members left ar restaurant for this exact reason. So even if your menu items are priced correctly and costs are under control, if you don't exceed guest expectation then you won't have anybody to serve.
thank
Keep it going bro
Will do!
I'm watching your videos a lot these days in the light that soon I'm going to work as a KFC food service supervisor in Canada. Are these videos of your enough or would you like to suggest something more because I know it's different in KFC from any hotel ? Thank you sir !
Congratulations on the promotion. If you are looking for managerial tips, I suggest watching all of the videos this month (March). Was there a specific topic you were interested in?
I love u boss
Thanks Benard! Glad the videos are helping you out. -Dawn, Team TRB
also pls give an example for price a menu item
I'm impressed.Trying to help my friend get started in being a Personal Chef.doing events of 10 people to start with.liked the approach of figuring out what the market will bear.Will keep listening to you.mike RiverRain
Glad we could help!
Hi Ryan, love the channel altough I followed your instructions and it didn't work, any chance you could help? Many thanks and well done again
Hi Luke! If you jump over to therestaurantboss.com/hire-me and grab a One Thing call, we can chat quickly about it. There is a small fee for the call but I promise it will be worth it!
Hello Ryan, I enjoyed your video. I am a subscriber to your channel already. However, I do have a question for you to answer. Do you think it is possible for the food and beverage industry to adopt the "Market Minus Pricing" Method? Approved by: Mr Nelson
It is not about the industry adopting it, it is about you adopting it as your method for setting prices.
How does market minus apply in a Michelin-level tasting menu? Ideally you charge for the whole menu but how do you create that ultimate price?
Hey, I need to set frame works.
What about when it comes to pricing for instance Wine by the Glass (175ml, 250ml) etc .... is there a formula, obviously understanding it works out better for the customer to buy the bottle, but what is a good formula to work out by the glass sales against bottles?
There is none that I have created or am aware of. Generally speaking I want to make my money back on the bottle by the second glass. But that also depends on your style of restaurant and how quickly you move wine. Also if you are pouring 4,5 or 6 glasses per bottle.
Good morning, I run an Indian restaurant, should I compare prices with Indian restaurants in my area or with all the different cuisine restaurants
Thank you for your wonderful videos.
We'll do an updated video later this summer on competition, but this is a good video to start with: therestaurantboss.com/identify-10-restaurant-competitors
Your competition isn't just other Indian restaurants, it's anywhere your customers are spending their dollars.
-Dawn, Team TRB
Hi I like this I guess you are located in the US, would this apply to Canada?
why would it be different anywhere else in the world?
Does anyone show me the formula
Price it please thanks for advice
Hi Ryan, cheers from São Paulo, I run a restaurant based on fried chicken, can you help me with a question? How could I split the cost of cooking oil, energy, and transportation cost (fuel mainly?) to add in final menu price. Thank you.
You don't... it is NOT part of your food cost. Please see this video: therestaurantboss.com/labor-utilities-plate-cost/
Hi . We have a fancy Mediterranean restaurant. We want to change the menu. Do u suggest to write the price with cents or not ? Ex 19 or 18.95?
For higher prices I think the cents look cheap. Sometimes I have 1/2 for example 19 1/2 for 19.5 but that is about it.
Great great tip! They should teach students in culinary school. Your method of thinking. A lot of people go about this topic all wrong. I know this video was three years ago but do you still offer the 90-day plan for free?
Hi Kenya! I am glad the information was so helpful. You can download the 90-day plan here: therestaurantboss.com/boost-your-restaurant-in-90-days/
@@Therestaurantboss Ok.Thank you
thanks, this is helpful. One thing i have found with the cost plus model is that it is difficult to price labour into each menu item so that you easily work out how much it costs to produce but i think the same thing would apply to the market minus. how do you price labour into each item so that you can manage the costs as a whole or is this not possible at all?
You are not supposed to cost labor into a menu item.
@@Therestaurantboss so how am i meant to work it out so that we are able to cover overheads?
@@thembelihlebulube6964 Labor is NOT included in CoGS. Labor is a separate calculation. Labor / Sales = Labor cost. YOU DO NOT USE IT IN FIGURING OUR FOOD.
@@ryangromfin1690 thanks, I think i am more looking at figuring out how to cost labour in order to see a profit after all is said and done. right now i am finding that before labour costs i am making a slight profit but then that equals or is just a little bit more than the labour cost...i am needing help to figure out just how to calculate to ensure that i do manage to pay bills at the end of each month...(i think thats why i keep asking how to price food that it already factors in the labour cost). will read up some more on this though. thanks again
I like that but give us product pricing way to look up what they should, just saying this because I have a food truck and things are the same while not the same, I need my burner cooking food continuously or I break even. A food truck is not like a stable place but it's a start. Nonetheless, I have to find a way to undercut the normal market price or be showcased on TV somewhere like the Taco Bus in my area.
I suggest you use visuals
Thank you for the feedback. Some videos have more visuals than others.
Not crazy about changing my unique products to conform to the market. This maybe good for sides or somethings basic.
Can you please explain more, I am not sure where I mentioned or have ever expected anybody to change their unique products to match the market. I would never teach not ask anybody to change something that is unique and something that make your restaurant stand out, I encourage that.
if your products are unique, then none of your competitors are selling them, so there's no way to determine what the market will pay for them..
I’m struggling putting together a menu for food truck. I could use anyone's help on this
I have a lot of training videos on menu engineering. Just enter "menu" in the search box.
What if the product is new and there is no competition
You do both, it's called Fair Market Pricing. Since it's a new product, inducing for trial is your most important objective. Once you've created a demand, then you may carefully increase your prices.
How could I talk to you one-on-one through a forum? Getting started in a food trailer for the first time been in the restaurant business for somebody else for 30 years just not sure and pricing out the cost of food right and then know how to charge accordingly
Hey Geoff!
2 ways to talk with Ryan one-on-one.
90-minute Strategy Session: www.therestaurantboss.com/coaching
TRB Membership: www.therestaurantboss.com/membership
- Dawn, Team TRB
I've looked at websites of restaurants in my area.
All these websites say: Prices Updated For 2023..and all of it is completely false.
I think they're doing this on purpose to get people to go to there restaurant because they're all doing it.
I found out that it costs 2 to 3 times more than the prices they have listed on their website.
I went to a restaurant thinking it was going to cost me about $13 but it cost me close to $30
Same thing happened at other restaurants including fast food.
It seems that we cant look up the prices on websites anymore.
Is there a video to show you how to actually calculate what your menu prices should be. I am looking for a good video to show to others that want to learn how to price menu items that can possibly explain it better than I can. Thanks!
Hi Jennifer! Thank you for your question. I hope this video is what you were looking for: therestaurantboss.com/how-to-set-prices-on-your-restaurant-menu/
@@Therestaurantboss i did find that video, but it's not explaining how to actually cost out a recipe. I love the explanation you gave in this video because I never knew how to explain the two different ways people do costing. I've always been taught to divide by .30. Thanks for the video, but I need one that actually shows the steps on how to cost out a recipe.
Hi Jennifer! I have added that topic to my June videos. Keep your eye out!
@@Therestaurantboss thank you so much! I really appreciate this!
@@Therestaurantboss can you direct me to the video?
Cost "Pless" Pricing
That's what I hear too. Lol
What's the reason behind dividing by 3 or 4?
Nothing magical about that number. Generally speaking, if you multiply your cost by 3 or 4 it's going to get you into the 25% - 33% cost of goods sold range. -Dawn, Team TRB
I’m over here still mad McDonald’s raised the dollar cheeseburger by 30 cents
Greetings! My new business partner and I are working on restarting a tavern & grill / restaurant that has been closed for almost two years. (The next BIG hurdle is the city council at the Oct 2 meeting - convincing them to take a chance on us when the former operators had many noise complaints from the neighbors because the bands were playing too loud on Saturday nights.)
We are now putting our menu items together and are working on giving the best quality and quantity for the best price.
We will be going over many of your educational videos, along with many others, in hopes that we can get it right the first time.
This is our first venture into this field, although we have owned and operated a couple of businesses in different fields.
Management of the elements appear to work the same in all fields, but the fields all work differently. We now will have to learn the various fields in a tavern & grill environment. It will be interesting, to say the least...
Any anvice you can send our way will be greatly appreciated.
Many thanks!
Don't try to give the best quality at the best price...that is impossible. You can give the best quality for the price they are willing to pay, but the best quality comes with a price tag...small change in wording but MASSIVE shift in business planning and decision-making.
Hello... are you still active here?
Food Photographer
Why divide by 3 or 4? Is that an industry standard? So in Market Minus Pricing, if the market can bear more, then I make more, but if the market cannot, then I make what everybody else is making or less. Is that what I hear you saying?
Not completely, what I am saying is find out what the market wants then build the best possible X with Y amount of money to spend. So yes, dividing by 3 would give you a 33.3% food cost and by 4 would give you a 25% food cost. Those are good starting places for industry averages, but not set in stone by any means. Most restaurants will run a 10 or 15% FC on french fries, but a 50% FC on a burger with cheese, bacon and avocado. When you add up all the money spend on food by the sales at the end of a period, it is reasonable to shoot for between 25% and 33% as a general rule of thumb.
@@Therestaurantboss Thank you for responding. I understand completely. Excellent channel, keep up the great work.
Hey Ryan. I am in the process of opening up a restaurant in NE Florida. Can you give me the 90day planner and start-up assistance on how to open and be successful in my restaurant?
Hey Sonia! Here's the link to the 90 Day planner: therestaurantboss.com/boost-your-restaurant-in-90-days/
if you are in interested in my services, you can find options here: therestaurantboss.com/hire-me
I am also launching a new program in a few weeks that would be perfect for you! Check it out: scalemyrestaurant.com
pdf food menu and there price globally
Yes! It’s honestly basic logic…. Lol. I think.
What if you have zero competition?
Hi Jerry! How can you have zero competition?
CAN I CALL YOU JUST TO GET MORE INFO AND EXPLAIN MY DILEMMA??
Hi! Please go to therestaurantboss.com/hire-me and grab a One Thing call if you want to discuss your dilemma further.
I hate overpriced crap food, which is what you can find in almost every restaurant around mine. People say my prices are too low for the kind of food I serve, but I think my prices are fair. So, I am wrapped in this constant dilemma. If my own customers are willing to pay more, should I make some changes?
Remember price is about value to your customers. Ferrari's are expensive but that does not mean they are a rip off. You get an absolutely amazing car with incredible performance for the price. Some may say they are too expensive and others think they are cheap, just depends on what your expectations is and how well you deliver on that. Charge what is fair for the quality and distinction you provide. The more unique and distinct, the more you can usually charge. If your customers say your food is too cheap, likely you should be charging more. What is your food cost?
The Restaurant Boss I can produce above average quality, with fresh ingredients for a very, very low cost. I sell mexican/latin food, everything handmade, but as I said, very low cost.
The Restaurant Boss and I opened my place on a small island in Sweden, I am the only one in the area who sells this kind of food.
CarlosChip Morales i sell texmex/latin food
Please give an illustration including cost of a particular item like one quanitity of pizza with cos of ingredients, fuels and hire charges of the restaurants, salary of staff and other admin expenses to fix up the price which would yield profit. Otherwise this video is of no use for beginners.
Well none of that is included in your food cost, so to start, food cost is JUST the cost of the ingredients to create that item, NOTHING else. That is why it is called food cost. Then on average, you will want most items to be around 25% food cost, so you multiply the cost by 4 to get the menu price. BUT I suggest using the Market Minus method.
How to make party packages with prices
Hi! I am not really a caterer, but can talk about making combo packages and family meals for your menu. Would that work?
@@Therestaurantboss YES!
You dont say how to figure out he starting point of the minus point...no instruction on where or how to establish that.
Market minus is based on what you think your guest is willing to pay. There is no formula for that, it is based on your gut instinct, conversations with potential or current guests and competitive price analysis.
DO YOU HAVE A CONTACT EMAIL SO I CAN KNOW EXACTLY WHAT I NEED TO PAY FOR MY SPECIFIC BUSINESS PROBLEM??
Hi! You can schedule a One Thing call at therestaurantboss.com/hire-me and we can chat.
Cost PLESS⁉️ I see why “most people” are doing it wrong. They are doing the PLUS. They need to do the Cost PLESS Model. 😂
this is how ive done things for the past 16 years and my business is on the verge of bankruptcy. always do things rationally and never do anything just because your competition does it one way
The industry has definitely changed and what worked even a few years ago is no longer working now. Without knowing much about your business, it's hard to point you in the right direction but hopefully these will be a good start:
How to Maintain a Steady Stream of Customers for Your Restaurant:
therestaurantboss.com/restaurant-marketing-funnel-strategies
Fast and Free - A Bounce-Back Strategy You Can Implement in Your Restaurant Today:
therestaurantboss.com/restaurant-marketing-funnel-strategies
Why You Can’t Just Be Better Than Other Restaurants:
therestaurantboss.com/restaurant-competition-tips
I hope that helps!
- Dawn, Team TRB