Menu engineering basics

Two numbers per dish

For each dish on your menu you need two numbers, for the same period (a month is a good start):

• How many sold. From your sales report.
• What it earns per plate — its contribution margin: selling price before tax, minus the cost of its ingredients and packaging.

Food cost percentage alone can mislead. A steak with a 40% food cost may earn far more per plate than a salad with a 20% food cost. Menu engineering looks at the cash each plate leaves you, because that is what pays the rent.

A worked example

Say a small menu sold, in a month:

• Burger — 600 sold; price 10.00, cost 3.50; earns 6.50 a plate.
• Grilled fish — 150 sold; price 16.00, cost 6.00; earns 10.00.
• Pasta — 500 sold; price 9.00, cost 2.00; earns 7.00.
• Salad — 120 sold; price 8.00, cost 3.00; earns 5.00.

Work out two averages:

• Average sold per dish: (600 + 150 + 500 + 120) ÷ 4 = 342.5.
• Average earned per plate, weighted by what sold: total earned ÷ total plates = (3,900 + 1,500 + 3,500 + 600) ÷ 1,370 = 6.93.

Now sort each dish into one of four groups:

• Popular and earns above average — a "star". Pasta: 500 sold, 7.00 a plate.
• Popular, earns below average — a "workhorse". Burger: 600 sold, 6.50 a plate.
• Not popular, earns above average — a "puzzle". Grilled fish: 150 sold, 10.00 a plate.
• Not popular, earns below average — a "dog". Salad: 120 sold, 5.00 a plate.

What to do with each group

Stars: protect them

Keep the recipe and the portion steady, keep them easy to find on the menu, and make sure the kitchen never runs out. Raise the price only carefully — they already work.

Workhorses: make them earn a little more

Guests like them, so don't take them away. Look for ways to raise what each plate earns: a small price rise, a cheaper ingredient that guests won't notice, a smaller garnish, or a combo that pairs them with a high-earning side or drink.

Puzzles: help guests find them

They earn well but few people order them. Move them to a better place on the menu, give them a clearer name or description, ask staff to recommend them, or try a slightly lower price. If nothing works after a month or two, consider whether they belong.

Dogs: fix or remove

They sell little and earn little, and often bring their own ingredients that go to waste. Re-work the dish so it earns more, fold it into another dish, or take it off. A shorter menu is faster to cook and easier to stock.

Things to watch

• Use the same period for sales and costs, and avoid odd weeks (a holiday, a closure).
• Compare within a category. Compare mains with mains and desserts with desserts; a coffee will never earn like a main.
• Count discounts and complimentary dishes. A dish that only sells on discount is not as popular as it looks.
• Update costs. Ingredient prices move; re-cost your top dishes when your supplier's prices change.
• Change one thing at a time, then measure again a month later, so you know what worked.
• Ask the kitchen. A dish that earns well on paper but slows the line on a busy night may cost more than it shows. Your cooks know which dishes those are.

How BillDine gives you the numbers

• How many sold. Reports → Menu (Menu & Product Performance) shows, for any period, each item's Qty sold, Gross sales, Discounts & comps, Net sales and Avg price, plus Category Performance, the Top seller and the Least ordered. On the menu, not sold in this period lists dishes with no sale at all. You can compare with the previous period, and export to CSV.
• What a plate costs. While you write a recipe, BillDine shows the cost per portion and the food cost as a share of the price, from the average cost of your stock. Prepared items — sauces, doughs — have recipes of their own.
• Profit overall. The profitability report shows gross and net profit when your dishes have recipe costs, and says which dishes are left out until they do.
• Acting on it. Combos give items already on your menu one price; modifiers add paid extras; and a dish can be taken off the menu without losing its sales history — the menu report marks it Off the menu now.

Put the menu report's quantities and your recipes' costs side by side in a spreadsheet, and the four groups take ten minutes. See reports in depth and inventory in depth for which plans include them.

A monthly routine

1. Export last month's menu report.
2. Add each dish's cost per portion from its recipe.
3. Work out what each dish earns per plate, and the two averages, within each category.
4. Sort into stars, workhorses, puzzles and dogs.
5. Change one or two things — a price, a position, a recipe — and check again next month.