A well-designed menu is the key to financial success

Developing a menu for your restaurant is a delicate balance between creativity and financial savvy. Executive chefs not only serve as the culinary captains of a restaurant but also hold the keys to profitability. Menu design is all about matching a proposed concept to the restaurant’s financial model.

The menu design process is usually managed by an opening chef. The opening chef can be a short-term consultant, paid to set up the restaurant’s operations, or he or she may be the full-time executive chef that will continue to manage the day-to-day business. An opening chef consultant will usually stay involved with a project for at least the first month of operations to train the cooking staff and make any menu tweaks based on real world sales.

But how does the opening chef create a menu?

Many chefs take a top down creative approach and a bottom up financial approach. To better illustrate the process, let’s use a fictional Italian restaurant in New York City.

First, the opening chef will start with a conversation with the owner. “The best chefs listen really well to what the owner wants to see on the menu of his or her restaurant,” said Bill Brasile, an AllDay consulting chef and former Executive Chef at Minetta Tavern. “Some owners will have a strict vision for their menu while others understand that initial concept can serve as a starting point,” said Bill.

Back to our example Italian restaurant, a chef can start with a few good probing questions.
Why does the owner want to open an Italian restaurant? Is it based off of memories of a trip to Italy? Is it an ode to family tradition? Or does the neighborhood lack this type of restaurant? An executive chef will translate this story to a new menu.

The chef will take into consideration the local competition and industry trends. Cacio e Pepe is a very popular dish at many Italian inspired restaurants throughout New York. Do all the other restaurants in the neighborhood have this dish? Will Cacio e Pepe help the restaurant stay relevant or will the dish just homogenize the local offerings?

From there, the menu creation gets more technical. “Chefs also need to discuss the financial outlook and long-term goals of the restaurant with the owner” said Bill. “What type of revenue target is the restaurant trying to hit?” Revenue goals will dictate the necessary average check size per customer, ultimately affecting the menu.

Chefs will begin with a rough number dishes, usually based on the size of the restaurant’s kitchen and ability to store raw ingredients as well as the mise en place.

One of the most important aspects of designing a menu is the costing of each dish. Bill will sketch out the initial menu template and start to cost each dish individually. Well organized chefs will keep spreadsheets of ingredients pricing, including yields of certain cooking preparations. For example, if Bill wants to put a spinach ravioli on our fictional Italian menu, he will need to cost the pasta dough, the spinach and cheese filling, as well as the final cream sauce. To cost out the filling, Bill knows exactly how many portions or yield of cooked spinach he can get from a single spinach delivery and the price of each portion. Bill also needs to take into consideration the labor involved in making the pasta. Homemade pasta is very inexpensive from a raw ingredient perspective but may increase the kitchen labor costs since handmade pasta is very time consuming.

Labor can impact the final menu price. A prep chef may have to come in earlier to get started on the pasta. Staffing is also dependent on how much of the menu can be prepped before service or during service. If a team of prep cooks can handle the mise en place before service, the number of chefs needed on the line during service can be lowered. Depending on the frequency of menu changes and overall preparation difficulty, an opening chef can set up a restaurant to be run by the kitchen staff without the need of hiring a permeant executive chef, saving substantial payroll costs.

A chef will try to keep the food cost mix of the entire menu around 26-28% of the dishes’ retail value. Some items may be above or below that 26-28% threshold but the menu should ultimately balance out, especially if the volume of higher margin items exceed lower margin items. A well-designed menu can keep the overall costs close to that margin threshold even if raw ingredient prices fluctuate. Finally, menu prices should be in line with the competition and the marketplace.

Once the menu is decided upon, an opening chef will create and test each recipe and ultimately train the staff. Most successful restaurants will continuously update their menu based on a combination of changing consumer tastes, seasonality, or customer feedback. Opening chefs can be held on retainer for menu updates or the menu design can be taken over by the executive chef. Regardless of the team’s structure, a well-designed menu will serve as an important piece of a restaurant’s financial success.

AllDay Industry has the experience and the network to help you develop your concept from any stage of development. From finding the perfect space, hiring the right executive chef, or developing your menu, our team will act as your primary consultant to connect you to some of the best talent in the hospitality industry. Contact us at 212.346.0606 or info@alldayindustry.com.

To learn more, reach out to Bill Brasile at wbrasile@gmail.com