Teaching new probable chefs to use budgeted percentage to price food menus in order to arrive at the true cost of eating at a high end restaurant is one thing that culinary schools would not be forgiven for. The fact is that if you really ant to determine the true cost of eating at a high end restaurant, you need to understand your market price point or what your market regarded as a fair price for the food you will prepare and serve. Menu cost is another consideration and of course the required gross profit at the end of the day.
If you want to create prices in your high end restaurant that will ensure you have sufficient cash remaining after all expenses attributable to the food preparation, here is the true cost of eating at a high end restaurant.
Market Price Point
This is essential to knowing the true cost of eating in a high end restaurant; after all you cannot just throw prices out there, be it on gross profit or cost percentages, without thinking about what your market is already paying for those products somewhere else. You need to think about what other businesses are charging for similar type of food or the same dishes you are serving.
However, you must be able to justify your price with additional value, if you want to charge more than your competitor along the street. The additional value could be in form of better location, better, environment, live entertainment, more exotic ingredients, larger meal portions or something else. It could as well be the delivery and promise of an extraordinary selling strategy that your competition is lacking.
The important thing to note here is that, your prices must give value to your customers. Note the fact that you are in business because of your customer and you must consider them first in anything you do. Hence, you won’t have much of these customers if they don’t feel your food is worth the amount you are charging, no matter the pricing method you are using to calculate the true cost.
Menu Item Cost
Considering the fact that the cost of ingredients rises all the time, you must know how much each menu item cost you to make. The truth is that you cannot possibly arrive at prices that will make you money, if you don’t know precisely what a menu item costs you to make, and how many dollars you need to add to the price to pay for the ingredients.
- Tracking Recipe Costs – Making use of the Microsoft Excel spreadsheets is the best way to track your recipe costs. There are also inventory and food costing programs out there to help you in costing your items. Do not ever get lazy about tracking your recipe cost and be steadfast about it too.
Required Gross Profit
When setting menu prices, this is the vital consideration. Know how much your customers cost you to serve, so that you will know the amount of money you need from each of them to pay all your bills and make gain.