Monthly Archives: March 2011

How to roll out a new restaurant menu

One of the scariest things to do for a restaurant owner is to change their menu. There is nearly always a fear that taking one wrong item off the menu will result in all a restaurant’s business slowly dwindling away. There’s a fear that raising prices will chase off all the customers, that EVERYONE will see all the changes and rebel!

In years of working with restaurant owners, private clubs, colleges and concessions with menu changes, I have yet to see any of these fears materialize. In reality, the fear itself ends up causing more problems than the changes do. After a menu change, owners are relieved they took the leap and thankful for the extra revenue. While most changes go unnoticed, the longer a restaurant waits to change their menu and raise prices, the higher the price increases have to be and the more likely they will be noticed. Price increases are much less likely to be noticed when they are done more often in smaller increments.

Instead of waiting a year and raising a price $1, you should raise it $.25 every three months. These smaller, more frequent changes also result in higher cash flow during the year. Here’s an example of how much this method can increase your cash flow. I suggest changing your menu at least every 3 months. This allows an opportunity both to keep the menu new and exciting, and to make the more frequent and smaller price increases I mentioned.

Realizing that it is better to change your menu and increase prices more frequently is one thing, but doing it could be quite another issue altogether. Without the right process, changing your menu can be a big project. With a good process however, it doesn’t have to be.

To help you through the process of changing your menu, we’ve created this list to help walk you through each step. Here it is.

 

Steps to rolling out a new restaurant menu

Set parameters to make your menu “manageable”

– Before you just start writing down all your favorite items to cooks, you need to set some rules for your menu. Chances are, you have a lot more great recipes than should really be on one menu. It’s okay not to squeeze everything on one menu. Save some of those great recipes for your next menu change or for chef features.

As a “rule of thumb”, I suggest to restaurant owners and chefs to keep their menus small. In most cases, 10 starters (appetizers, soups, salads), 10 main dishes (entrees and sandwiches), and 5 desserts are plenty. This provides your guests with plenty to choose from while leaving you with room on the menu to write great descriptions that sell the food. This small menu also allows you the time to create great nightly or weekly chef features. By not making your menu overly large, you can focus on making items from scratch and having fast production speeds.

Another “rule” I have is to require that every single ingredient in your menu items be used on at least two dishes. This helps increase inventory turnover and reduce the chance of product going bad before it is used up.

You should also have a plan, and even menu items, for making use of product that you have to over produce. For example, if you have a roasted chicken dish on your menu that has to be prepared before service but cannot be reused the next service, you need to have another dish to use the leftover chicken for, such as a chicken salad  sandwich or wrap. Having a plan for extra prepared food will do a lot to reduce your food costs. If you utilize nightly or weekly features, these can also be an outlet for this food.

Perform a menu engineering analysis

– There are many tools for doing this, but you don’t really have to have the same type tool we use to perform a menu analysis. You simply need to determine which menu items are making you money and which ones aren’t. There are four classifications for menu items; dogs, workhorses, stars and challenges.

      • Dogs are menu items that have a low profit contribution margin and low popularity.
      • Workhorses are menu items that have a low profit contribution margin and high popularity.
      • Stars are menu items that have a high profit contribution margin and high popularity.
      • Challenges are menu items that have a high profit contribution margin and low popularity.

It’s usually a good idea to remove the “Dogs” from your menu, keep the “Stars” and “Workhorses”, and change the “Challenges” to try and turn them into “Stars” or “Workhorses”. You may also wish to remove the “Challenges” in favor of new menu ideas you have.

Choose menu items

– Once you have your menu items categorized based on their profit contribution margin and popularity, you have to decide which items should stay on the menu, which should come off and which ones need tweaked. If you are a new restaurant, your biggest challenge will be resisting the urge to put everything you want, or everything you have the ability or product to make, on the menu.

Smaller menus are more efficient and more profitable. They usually result in shorter ticket times, lowered labor hours and increased sales and profitability. Not to mention, it’s a lot easier to change and roll out a small menu than a large one. For existing restaurants, the hard part is following through with removing slower moving menu items instead of just adding new ones to the list. If you run features, you have a great tool to identify menu items that could be popular on your new regular menu.

Write recipes and descriptions

– Using recipes keeps your cooks consistent. You need your customers to receive their favorite dishes tasting exactly the same no matter who cooks them if you want to keep them coming back. Recipes also help you price out your menu so you know what everything costs. Without knowing the cost of a menu item, you can’t know what you must price it to make a profit.

Descriptions serve a dual purpose. They both describe the dish on the recipe sheet to the cook, and they describe the dish to the servers. Restaurants often make the mistake of not sharing a detailed enough description with the servers for training purposes. They should be able to visualize the dish being made from your description.

Perform a menu matrix analysis

– A menu matrix analysis is done to make sure the production of your new menu is balanced out across your restaurant equipment so no one piece of equipment or station is overloaded. To perform this analysis, simply create empty boxes on a sheet of paper that represent each piece of restaurant equipment in your kitchen, including steam wells and make stations. If you have multiple fryers or other pieces of equipment, create multiple boxes for each piece. Go through your menu item by item and list every component from every menu item inside the box representing the piece of equipment it is prepared on or served from during production. You do not need to list items that were already listed for another piece of equipment. When all components are listed, your equipment should have an “equal” (or close to it) number of items under each piece. This helps spread the menu workload across the whole kitchen line.

Create a menu training packet

– This is simply a list of all your menu items in the order they appear on the menu, complete with the detailed descriptions from the recipe worksheets.

All menu items are included on the list whether they are new or not. The training packet should contain a glossary at the end with definitions of any culinary terms used in the descriptions. Remember, servers don’t often go to culinary school. They need taught what these terms mean. At the end of the training packet should be a list of the items that have been removed from the menu. If they are to go into rotation as Features, that should also be shared so servers can alert any customers who may have had those items as a favorite.

Create a menu training test

– This does not have to be a daunting task. It can be as simple as taking your training packet and removing words from descriptions and replacing them with “___________” spaces for servers and cooks to fill the spaces in with the missing term or ingredient. An alternative would be to create 2 to 3 questions about the preparation of every menu item for the servers and cooks to answer without the benefit of having the description in front of them. The point isn’t to make the test really hard, but to force servers and cooks to study the new menu. Servers should not be allowed to work with the new menu in place until they achieve a 95% or better score on your menu test. Cooks should have the advantage of having a recipe manual on the line to reference as needed. There should still be great encouragement to learn the new menu though.

Create a recipe manual

– Every menu should have a recipe book that serves both as a reference when starting a new menu and a training guide for new cooks. A recipe book is simply organized for quick reference. There should be tabs for each section of the menu, and the recipes in that section of the menu should be put into the recipe book in the same order they appear on the menu. Each recipe should also have a printed picture of how the plate should look when properly made placed directly after it in the book. The pages will appear as “recipe”, “picture”, “recipe”, “picture”, etc. Some other things you may want to add to the back of your recipe manual as a training tool would be pictures of properly prepped menu ingredients.

Create a prep list

– A prep list is a standardized tool that allows a chef, sous chef or line supervisor to plan the prep for the day. There should be a separate list for every station unless your prep is small enough to fit all on one page. If it is small enough, items should still be separated by station. This list should have a line for every item to be prepped in each station and columns where you can put how much is to be prepped for a regular shift, how much should be added or taken away from that amount for the current shift,  how the item should be cut, cooked or otherwise, what size of container each item should be put in, what type of portioning utensil should be used for each item, and lastly, a column to record how much of the prepped item is left from the shift. This will help the supervisor adjust prep levels and control waste.

Create a line setup diagram

– A line setup diagram is a basic layout of how prepped items are placed into cold stations, steam wells, bain marie’s, etc, and where extra prepped items should be stored inside of refrigerated units. The chef or sous chef will know better where to place prepped items to maximize production speed. It is important they are telling the cooks where to place these items and not the other way around. Don’t ignore a cook’s input if they have a suggestion though.

Design the menu

– Designing a menu isn’t as simple as making a list of everything you want to sell and adding a price. There are certain things that make a menu more effective and increase your sales. Not all parts of the menu real estate are equal. Typically, people remember the first and last things that they read whether its a menu, an article or a book. The details in the middle fade the fastest. This means the most valuable menu real estate are the first and the last places on the menu the customer looks. Items with the highest dollar markup should be placed in these ares of the menu to increase their opportunity to be seen. Ideally, your highest profit menu item goes right in the center of the menu. That is the first and last place a customer sees on your menu. Other psychological selling tactics used in menu design include: never putting prices in a straight column so as to allow customers to shop for the cheapest items easily; not using “$” signs or “………….” to lead customers to the prices; never putting the price in a larger or bold font to make it stick out; using highlighting, boxing, icons, color and pictures to lead people to high profit items; and rounding items to an even number or to the closest “.09” instead of “.o5”, effectively gaining $.04 on every sale. The front of the menu should include all contact information and a description, landmark or map of how to find the restaurant if it is difficult to find, in addition to the name, logo, website, Facebook and Twitter info. The back can be used for desserts, beverages or to market special events. Daily Features should appear on an insert placed in the menu and/or be described to every table by the server directly.

Practice the new items

– For weeks prior to rolling out a new menu, new items should be run as specials to get both the kitchen and the service staff familiar with those items. Both cooks and servers should be allowed to taste the new items. Practicing serves both as a good training exercise and as an opportunity to get feedback on new menu items and tweak them before you roll them out.

Promote the new menu

– Promotions to hype a new menu should start at least one month before rolling out the new menu. It’s hard to build hype for anything in less than a month. If you know some of the new menu items you have planned, share them with the service staff so they can talk them up to customers who are curious. If you have an email list, hype the new items via email. Talk about them on Twitter and Facebook. Mention them on your website. Create a poster for your entryway. Put an insert in your existing menu. Put table tents up to promote them.

Don’t forget the desserts

– It’s just as important to change your dessert menu as your regular menu. Dessert menus are usually smaller and require more frequent changing to keep them fresh and interesting. If you want to keep your dessert sales up, keep things exciting on your dessert menu without making a huge, burdensome dessert menu that slows down production.

Roll it out

– Make sure to meet your own time goals for rolling out the new menu. There is very little more annoying to a customer than to have something hyped to them for a solid month, then not delivered on the day you promised. If you are following all my steps, the real work is going to be done long before the roll out date and you shouldn’t have any problem meeting your deadline.

Don’t be intimidated by all the steps and details of rolling out a new menu properly. Sure, it’s a big project the first time, but the second time you roll out a new menu, most the work will already be done for you. It gets easier every time. Within a year, you’ll be a pro. Your staff will be more knowledgeable, your production line will be faster, your food will be more consistent and your customers will be happier. All that works to earn you more profit for your restaurant, and isn’t that what owning a business is all about?

Brandon O’Dell
O’Dell Restaurant Consulting
www.bodellconsulting.com
blog.bodellconsulting.com
(888) 571-9068

Brandon O’Dell is an independent restaurant consultant that offers operating, marketing and strategic planning advice for restaurants and other food services. O’Dell Restaurant Consulting is based out of Kansas City, KS and offers assistance anywhere in the U.S.

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Certificates and charities

Gift certificates are one of my favorite ways to build sales and market a restaurant. While lot’s of restaurants use gift certificates in-house to build sales during holidays, I would like to share with you a great way to use gift certificate all year round to build sales, and improve public relations.

 

Gift Certificates and Charities

This is a very simple program, and doesn’t require a lot of work, so it won’t take long to explain it to you. It involves using charitable organizations to sell your gift certificates while raising funds for themselves. With this program, you can offer these organizations a larger contribution than their traditional fund raising methods, while you benefit from increased sales. You also don’t have to worry about ruining the perceived value of your product by discounting it, as you do with coupons, because these charities will be offering your coupons at full price. The discount that you would normally be giving the customer instead goes to the charity. Organizations such as schools, churches, the Boy Scouts and the Girl Scouts have children sell their fund raising goods, and they are much more effective than most adults. How hard is it to say no to a child who is offering gift certificates that contribute such a large amount to their cause?

 

How large an amount you ask? I suggest offering the charity 20% of gift certificate sales, and only offering certificates in either $20 or $50 denominations. Here’s how it works. You sell numbered gift certificate books to the charity at a 20% discount. The certificates should be signed and ready to be used. They sell the certificates at full price, while telling customers what a large portion you are contributing to their cause. Any remaining gift certificates they do not sell are sold back to you at the price you sold to them. This way, they have no wasted product, and only pay for what they sell.

 

Here’s how you make money on it. On the average nationally, 15% of gift certificates sold are never redeemed. This already brings your discount down to 5%. You’ll have to pay for printing certificate booklets, but by the time you figure in your tax write-off for a charitable contribution, and the normal percentage of your sales you direct toward marketing expense, the cost could be a wash. By keeping the certificates in larger denominations, you also increase the chance of the certificate holder bringing in friends, with everyone dining at full price so they see what a great value your restaurant is on an everyday basis. You’ll avoid the “coupon clippers” who just dine when they have coupons, and you’ll have a great way to build sales and gain new customers for your database!

 

Brandon O’Dell is an independent foodservice consultant who specializes in teaching owners and managers how to use emotion marketing and price by gross profit. He can be reached on the web at www.bodellconsulting.com.

 

A Groupon nightmare

“Is advertising through Groupon worth the money?”

One of the most popular questions for a restaurant owner to ask themselves nowadays.

I would like to share a blog post with you from a restaurant who used Groupon. I warn any restaurants I can from using Groupon, or coupons in general. There is no more expensive way than Groupon to advertise for a restaurant because you lose money on every deal you sell. No restaurant should ever make an offer that loses them money. That is counter-productive.

Please read this one restaurant’s experience using Groupon. There are over 125 comments to their blog post that you should also read.

Here is the blog post from Posie’s Cafe Blog:
http://posiescafe.com/wp/?p=316

There are many other restaurant owner personal accounts of their troubles with Groupon. If you have one of your own or know of someone else’s, please share it here.

Brandon O’Dell
O’Dell Restaurant Consulting
www.bodellconsulting.com
blog.bodellconsulting.com
brandon@bodellconsulting.com
(888) 571-9068

New study says creating emotional ties with consumers is a successful strategy | RetailCustomerExperience.com

New study says creating emotional ties with consumers is a successful strategy | RetailCustomerExperience.com.

Leading Fast Casual Restaurant Chains Not Only Weathered the Economic Storm, They Prospered, Reports NPD

Leading Fast Casual Restaurant Chains Not Only Weathered the Economic Storm, They Prospered, Reports NPD.

When bad websites happen to good restaurants – The Boston Globe

Here’s a great article on Boston.com that Dave from www.Foodservice.com shared. It’s funny and very topical. Give it a read.

When bad websites happen to good restaurants – The Boston Globe.

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