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Pricing – other considerations

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By now you have put together costs for each item on your menu. You have probably got a feel for what margins you want from your menu overall. So it’s time to start thinking about how you want to price each dish. There are no hard and fast rules here, pricing is an art. There are three considerations that you need to make.

1 Are the prices balanced?

If you charge 2.95 for a soup and 150 for wagyu beef and lobster, then the prices seem out of line. A risk is that you have taken your margins too literally.

Think cash margins and percentage margins. The soup can safely be hiked for a higher percentage whilst the surf and turf can be reduced at the same time preserving a decent cash margin.

2 Do the price reflect your place?

How do you peg the level of your restaurant? Prices matches the dish on offer and that should match what you do. Running a fine dining establishment will dictate a completely different menu range than a fast food restaurant.

3 The most important question of all?

What does your competition charge? If you are have not got your own specific hold in the local market there will be at least one venue that you consider to be competition. Don’t think they are not going to do this to you.

Most competitors will play fair but they should be checking you out. Unless you have a clearly differentiated dish, see what is being charged elsewhere for comparison. One of the best tools you can own is a set of everyone elses’ current menus. It is very difficult to live in isolation in the hospitality industry especially when your customers will know what is acceptable in the market.

101 Restaurant Secrets

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