How to Set Prices for Restaurant Specials - Restaurant Business Tip #restaurantsystems

Have you ever wondered how you should price your menu specials? Do you think you might be losing money on those specials? If you're like most restaurant owners and chefs, you're making the same mistake over and over again. Watch this video to learn what you're doing wrong and how to fix it.

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About David Scott Peters: a restaurant management expert and founder of TheRestaurantExpert.com. He offers independent restaurant owners restaurant management tips, coaching and a software that will revolutionize their business operations and their profits.

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About Pricing Restaurant Menu Specials Accurately

Here is what usually happens in a restaurant. The owner or general manager asks the chef or kitchen to come up with something creative as a special menu item. There isn't any real direction provided, just the order that it be something creative. So the chef or other kitchen staff member whips something up and puts a dish together for everyone to taste. It gets a big thumbs up from everyone and gets put on display. Sally the server comes in - because she has the best chalkboard penmanship - and she writes it up so beautifully and then calls out to Chef, "How much should I price this menu special?" Chef looks at it and calls out, "$12.95" The menu price is based on nothing except which way the wind blew! No other business could price their inventory in this manner. Why do restaurants think they should wing it?

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These videos cover ways to take action in the restaurant today to be more efficient and profitable. Whether you’re looking for ways to cut and control food costs, trying to stabilize your labor costs, or you’re interested in building a management team that actually manages, these tips will help you.

David teaches real solutions to the biggest – and smallest – challenges in independent restaurants. Watch this video and then take action!

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Video Notes on How Set Pricing for Menu Specials:

First, you should never set a price on any menu item without knowing exactly what that menu item costs to make and how they're all selling. That is where recipe costing cards come in.

One of the things you have to do is get up-to-date recipe costing cards, what you sell the product for along with how many items you sell of everything (reports in your POS system). This will tell you what your food cost should be if you had no waste, no theft, no spoilage — a perfect restaurant, which does not exist. But this gives you the ideal food cost and the extra point or so for your chef. With this information you can measure success.

Now you can price your menu properly based on your mix – some items you sell the heck out of and you can charge more for a low food cost. Some items don’t sell a lot and could have a high food cost or a good cash contribution, but it doesn’t have too much of an impact.

All of these reports and data help you make the decisions. You’re not guessing – you are using data based on your restaurant to figure out how to set restaurant menu prices.

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The reality is most independent restaurant owners don’t even know what each dish they put on a plate costs to serve, forget about the side dishes and sauces.

I’m not exaggerating.

Why is this a huge mistake? Recipe costing cards tell you if your menu items are going to bring in any money – the lifeblood to any business.

If you’re a restaurant owner who doesn’t have recipe costing cards, you may say, “I’ve got all the costs in my head.”

You might not feel like you have to put them on paper because you inventory and place the order for every food item needed to produce the menu, so you think you’ve got a good idea of what things cost.

This can kill your restaurant. Because what you think the costs are and what they really are is usually very different.

I guarantee if you put recipe costing cards in place right now, you’ll cut your food and pour costs, positioning yourself to better ride this economic dip.

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