In sales, it is the simple actions that generate the greatest results. If your desire is to increase sales, then take some time to crunch your key sales numbers. Taking this action allows you to work smarter not harder. So what are those key sales number?

I am continually amazed at the number of small business owners or sales professionals be them manufacturers, retailers, distributors realtors, mortgage brokers, insurance agents, financial advisers, lawyers, accountants, information technology consultants and even business coaches who do not now their numbers. No wonder they are working harder not smarter.

Here are some critical key numbers that every sales professional should know to be able to efficiently and effectively increase sales:

• Total Sales for the last 12 months
• Average sale value for the last 12 months
• Number of active clients (those conducting business within the last 12 months)
• Number of sales transactions for the last 12 months
• Historical sales growth for the last 5 years
• Average profit per average sale for the last 12 months

Let’s say that you currently generate $240,000 in sales. Breaking this down further means on average that you receive:

• $20,000 in sales per month
• $5,000 in sales per week
• $1,000 in sales per day

Now you determine that your average sale is $100 and this means that you must have 10 orders per day to make your current sales levels. You want to increase your sales from the historic growth of 7%-9% to at least 15% which is almost double your historical growth and starts to make you feel somewhat uncomfortable. Yet, you know that your marketplace is growing, more and more competitors are hanging up their signs so you believe that this is possible. Sales Coaching Tip: To be competitive means you must leave your comfort zone and that will make you uncomfortable.

To reach your new growth goal means an additional $36,000 in new sales or $3,000 more a month. This translates to 30 more transactions per month (average sales value is $100) or 1.5 more new sales per day. When you begin to crunch the numbers, securing another 1.5 sales does not seem that impossible.

Now you further realize that your existing customer base of 100 active clients make on average of 2 purchases a month. By doing the math, you quickly determine that by increasing monthly purchases to 3 for 10% of your customers, you can easily pick up another $12,000 in sales. Sales Coaching Tip: Look for the low hanging fruit that is probably there, but you ran by it because you just did not see it.

In reviewing your inactive clients of 300, you notice that some of them buy once a year. If you make sure that just half of them buy twice a year, instead of just one time, you can add another $15,000 to your total sales. Sales Coaching Tip: Working with existing client is much more cost effective than trying to find new customers.

Finally, in your historical growth you receive an average of 10 new customers per year. Your research suggests that only one third of them will buy twice a month and the rest will purchase only one time. This results in another $12,000.

Your projections look something like this:

• $12,000 from additional monthly purchases for 10 existing customers
• $15,000 from one additional purchase from 50% of inactive customers
• $12,000 from historical growth of 10 new customers
• $39,000 in total projected new sales by focusing on just 3 sales areas

All of a sudden you see that you can achieve your sales goal and with some additional sales to spare. This activity is much like answering the question: How do you eat an elephant? Answer: One bite at a time. By taking small bites in specific areas, you can increase sales.

Now you understand the importance of knowing your sales numbers. So get the #2 pencil out or the Excel spread sheet and start crunching those numbers!

Author: Leanne Hoagland-Smith
Article Source: EzineArticles.com
Provided by: Benefits of electric pressure cooker

Maintaining accounts is a daunting task, as it involves lots of concentration as well as time. Well, these days various organizations and other multinational companies are opting for accounting services that are offered by numerous firms that manages the accounting records. Lately, accounting outsourcing is one such solution that is catching up with various companies who are unable to manage their financial accounts themselves and hire accounting outsourcing executive to complete the task. Accounting outsourcing has in fact, become the order of the day for many.

Therefore, keep all your worries aside, as accounting outsourcing is here to provide you with relief. Accounting outsourcing services can be hired by small-, medium- and large enterprises without any hassle. Its sole purpose is to establish and provide a gamut of management services that focuses on accounting, taxation and other related legal outsourcing services. Accounting outsourcing services comprises of a range of strategies that incorporate a simple, yet practical and collaborative solutions for the benefit of its clients. And further utilizes resource orientation, as well as optimization approach for clients’ various business requirements. Its various strategies are structured to capture the strength and advantage of core competence at various levels. Well, it is a known fact that dealing with numerous numbers can be quite cumbersome and tiresome as well. Yet, one has to deal with numbers because they are an essential and integral part of any small or big business.

As these numbers grow and add up to the profit earned or for that matter expense incurred, the rule of the any business at any point given is to succeed while minimizing expenses and losses. Here, accounting outsourcing services plays a significant role as it provides a helping hand to the organization’s accounts department. However, maintaining these never ending numbers is not an easy task and needs that exceptional thing that can keep their numbers intact as well as running towards the success ladder. And perhaps that’s the reason that many companies hire certified accountants to deal with their earned profits. Accounting outsourcing solutions further enable the accountants to maintain and manage regular accounts on daily basis, as it helps both the owner and the employee to know the financial strata of their business on any given day.

In fact, with the businesses growing and increase in the competition, calls for multitasking but due to the lack of time, it becomes impossible to keep a track of one’s financial records on daily basis. Hence, accounting services helps in keeping a track of every transaction properly as well as accurately within a short span of time. The accounting outsourcing consultancy offers accounting reports that enables the owner or the management to carefully weigh the financial status of the company before deciding on strategies and future plan of action. In fact, through accounting outsourcing a business is able to gage the knowledge on current financial trends and areas of profit or loss. Hence, accounting outsourcing has become a soul for various industrialists and their business for profitable reasons.

Author: Alvis Brazma
Article Source: EzineArticles.com
Provided by: Programmable Multi-cooker

Several of our previous restaurant cost control articles have been dedicated to the topic of recipe cost and menu development. This article will continue on that trend by examining the principles of menu engineering and how they can help improve restaurant profitability and food cost control. Today’s concept of menu engineering is a product of Michigan State University’s School of Hospitality, and the goal of the exercise is to comparatively rank your menu items according to both profitability and popularity and to then graph these results using the BCG Matrix. This matrix utilizes four quadrants, and though the names have changed a bit during their application to the hospitality industry, their meaning has remained generally consistent.

Quadrant Definitions:

“Stars” are those menu items that are both the most popular and the most profitable. These are often house specialties and are the menu items that you want to sell most frequently due to their high contribution margin.

“Plowhorses” are menu items that are above average in popularity, but not in profitability. Overall, these items produce consistent profit for the business, but are not stars because their contribution margin is below average.

“Challenges” are the converse of plowhorses. They are highly profitable menu items, but not very popular.

Finally, “Dogs” are those items that are neither popular nor profitable, in comparison to your other menu items. Serious consideration should be given to eliminating these items from the menu.

The Mechanics of Menu Engineering:

To determine the correct quadrant for each menu item, menu engineering looks at both the average popularity and contribution margin of your menu items. Based on the results, each menu item is plotted on a graph, using the average profitability and popularity as the x and y axes. Each quadrant corresponds to a particular menu engineering label, as illustrated below. While menu engineering labels can be assigned to menu items without actually completing a graphical representation, we do not recommend this. Completing a graphical menu analysis in addition to simply labeling each menu item with the appropriate quadrant tag will provide a more exact and complete picture into how each menu item ranks in comparison to others. A plotted menu item that is on the border of another quadrant may require a different approach than one that is firmly situated in a specific quadrant–a subtlety that is only noticeable when menu items are actually plotted on the graph. While this may seem complicated, it can actually be quite simple once you become familiar with the process. Further, by downloading our free menu engineering spreadsheet you will be able to execute many of these functions and graphs automatically.

Popularity

Determining the average popularity is relatively simple, just take the reciprocal of the total number of menu items, expressed as a percent. For example, if you have twenty menu items, the average popularity would be 5% (1/20). Any menu item that represented more than 5% of the overall product mix sold would be considered a popular item, making the item either a star or a plowhorse, depending on the contribution margin of the item. To keep things simple, both popularity and profitability are automatically calculated in our free menu engineering spreadsheet.

Profitability

Menu engineering uses contribution margin as the metric for defining profitability. To calculate the contribution margin of each item, one simply needs to deduct the ideal food cost from the menu price for each menu item. For example:

Menu Item Contribution Margin

Once the contribution margin is calculated for each menu item, the average can be easily calculated–divide the sum of each menu item’s contribution profit by the total number of menu items. Any menu item that has a contribution margin above this average would be considered “profitable,” making it either a challenge or a star, depending on the popularity of the item. Some schools of thought advocate the use of prime costs in contribution margin calculations, including incremental labor costs into the food cost figure, but unless this is a typical internal cost accounting practice for your operation, we do not recommend it.

Once you have determined the comparative popularity and profitability of each item, you can then graph the results using the specific calculations into a four quadrant graph and identify each item with the corresponding matrix label, as discussed previously. Again, to assist with executing the above steps, we recommend that you download our free menu engineering spreadsheet that will do these calculations for you. You can also develop your own restaurant spreadsheet with a little work or purchase one from various restaurant consultant agencies. Once this process is complete, however, the real work begins.

Analyzing the Results of Your Menu Analysis

The primary benefit of using menu engineering as your menu analysis tool is that after only a little preliminary work and calculation, you are able to get an in depth picture into how well your menu items perform in comparison to each other. With this information in hand, it becomes much easier to make strategic menu decisions aimed at improving restaurant profitability. Further, the repetitive use of menu engineering over a period of time will help you gauge the effectiveness of past menu decisions, such as price changes, re-formats, deletions & additions, position changes, etc.

Challenges: A Few Suggestions & Solutions

As we discussed before, challenges are those items that have a high profit margin, but don’t sell very well. Because of their high contribution margin, the “challenge” for these items is to think of ways that profit margins can be maintained, while making the item more appealing to customers.

What do your guests think?

If you are trying to figure out why an item is not selling, start with those that are not buying. Guest feedback is typically the most accurate method in collecting information on why particular menu items are not popular. Based on this guest feedback, changes can be made to improve the popularity of items. Collecting guest feedback doesn’t mean holding hospitality focus groups sessions, of course, it just means doing restaurant table visits and talking to guests–paying particular attention to repeat, loyal guests that may be able and willing to provide valuable insight into some of their least favorite menu items.

Is the profit margin driven mainly by a center of the plate item?

If so, maybe the answer is maintaining the center of the plate menu item and portion size, but changing the preparation method. For example, chicken saltimbocca may not be a very popular dish on your menu, but by changing the preparation to chicken marsala, you may be able to create a dish that has the same profit margin as the previous dish, but is now more popular. This flexibility is very common among pasta, veal and seafood dishes, as well.

Is there a minor problem with the recipe that may need adjusting?

This issue is similar to the previous example, except that it does not call for a re-working and re-naming of the entire menu item, but rather just a tweaking of the recipe. This is an issue that is often times brought to an operator’s attention through guest feedback. Typical examples of this issue are food being too spicy or bland, too tough, inconsistent in quality, inadequate portion size, etc. These are important issues to identify to ensure a consistent guest experience and satisfaction level. Once identified, operational systems and changes can be put in place to correct the recipe or preparation deficiency.

A final note on this subject is that we recommend that a log be kept of all guest feedback. Using this log will enable you to look back over a period of time and identify any menu item comment trends that may not have been apparent during each individual guest comment. Many times, these mistakes are caught only after the repeat “comping” or voiding of items off checks, but the use of a log should help identify these trends prior to this happening–saving both money and guests.

Are people aware of the item, or is it buried in the menu? Is the menu description appealing?

Putting menu items in the “sweet spots” of menus, or highlighting them with bold font or boxes, can help drive attention to those items and increase sales. Further, using your staff to suggest a dish as a favorite or feature can go a long way in getting a profitable challenge item sold. Also, attempts at promoting an item through improved menu placement, staff recommendations or re-worked menu item names or descriptions will help identify whether the menu item has a marketing or culinary problem. If it is only a marketing issue, then these solutions may be sufficient to move a profitable menu item into the star quadrant.

Is the quality specification for the menu item ingredients appropriate?

Sometimes, operators can create overly restrictive quality specifications that result in higher menu prices than guests are willing to pay. In other words, guests do not perceive enough value in the higher quality specification of a product ingredient to pay more for the menu item because of it. Think of all the quality identifiers that we see on menus: line caught, wild, choice, organic, certified angus beef, imported, free range, grass fed, kobe, sushi-grade, etc. The decision regarding when it is best to opt for a higher quality, and more expensive, product is not always an easy decision. While we never advocate lowering quality simply as a way to increase profit, the quality specification of menu item ingredients needs to consider whether the clientèle values this identifier and whether the quality level is appropriate for the menu item use. Choice strip loin, for example, may be the best product for your NY Strip, but may not be the best product for your burgers. Trying to persuade your guests to pay three dollars more for their burger because it is made with choice meat may, or may not, work. It is always nice to serve the finest available ingredients, but the necessary increase in the menu item price means that the guest must value the quality enough to pay more, as well. In short, overly restrictive product specifications for menu ingredients can sometimes create higher prices for menu items, thereby turning a potential star into a challenge due to guest price sensitivity. It is always a best practice to look at the specifications for your menu item ingredients to ensure that your are purchasing the products best suited for their use.

Is the price too high?

Recalculate your ideal food cost for challenge menu items to make sure they seem reasonable. Further, we recommend doing market research to find out what other restaurants are charging for similar menu items. It is possible that what you perceive as a reasonable ideal food cost for a particular menu item actually leaves the item priced significantly above market competition.

If your ideal food cost for a challenge menu item looks a little too good, or if competitors consistently offer a comparable product at a lower price, you may want to consider lowering the price a bit to kick start sales. Remember, your price may be higher than competitors because of either your portion sizes or quality specs. As mentioned previously, this should be examined if guests seem to be favoring competitor products at lower prices, despite a reduction in the quality or portions. Tweaking the menu item a bit and then lowering the price may put the item back in line with market competition, thus improving sales while maintaining margins.

Plowhorses: A Few Suggestions & Solutions

With plowhorses, the problem is not popularity, but profitability. The goal with these menu items, therefore, is to find ways to improve upon the profitability of an item, without sacrificing its popularity.

Is the item so popular because it is priced too low?

If so, tweaking the price a bit might improve profitability without significantly impacting the popularity of the menu item. Again, executing some basic market research will help indicate the price range and market “white space” available when deciding on a menu item pricing strategy. If a menu item is significantly priced under market standards, and is struggling with profitability, then an operator probably has some room to raise the price without seriously impacting popularity.

Is the portion size too big?

While it is important to ensure that guest loyalty is not compromised by reducing portion sizes on popular items, it is possible that too much food is being served on particular plowhorse menu items. The best place to learn whether this is the case is in the dishroom. By watching how much leftover food is being wasted, operators can quickly determine if the portion size they are serving is more than expected by guests. In this case, making an adjustment will improve profitability, without impacting the popularity of an item.

Are the right ingredients being used to produce the item?

This, again, is a question about using the right quality specification for menu item ingredients. For plowhorse items, quality and specification issues are a factor when operators use higher quality ingredients without adequately charging for the increased cost of these items. Often times, this is because they realize that guests won’t pay the additional cost for a higher quality product ingredient in certain scenarios. Rather than using a different specification, however, operators use the higher quality product, but just fail to charge for it. While this is admirable, it can have serious implications on profitability. Using high quality ingredients is always a recipe for success, however, guests must pay for this added quality. So, the real goal is to use the highest quality ingredients that your guests value and are willing to pay for.

Can the preparation be tweaked to improve the profit margin?

In some cases, a popular item can be redesigned so that the price can be raised, creating a higher contribution margin. One example of this has been the increased focus on sandwiches and bistro salads as menu items. Realizing that guests desired having sandwich and salad options on the menu, and realizing that these items often times had low price points and relative small contribution margins, operators began designing large bistro salads and signature burgers/sandwiches. The end result was taking popular menu items and re-designing them so that they could fetch a higher price.

Dogs: A Few Suggestions & Solutions

Typically, our recommendation with dogs is to remove them from the menu. There is no point wasting inventory dollars on items that are neither profitable nor popular. These items just confuse the menu, drawing attention away from those items that you are trying to sell. Further, these items increase product spoilage, kitchen training and labor costs, as well as creating an overall decrease in kitchen productivity due to a more complex menu.

Stars: A Few Suggestions & Solutions

Keep selling these items! Make sure that these items stay well positioned on the menu and that you stay on top of your operational systems to ensure that these items remain consistent. Dropping the ball during execution of these items can be very dangerous, as increased inconsistency on star menu items can lead to a decline in popularity–which can have very negative effects on profitability.

In conclusion, nine out of ten times, each dollar of profit is generated from an order off the menu. Whether you are a quick service operation with menu boards and combo meals, or a five-star, relais gourmand restaurant with tasting and pre fixe menus, the choice of what menu items make the lineup, what their price will be and how they are positioned and delivered to your guests will determine how well your menu is able to drive revenue through to your bottom line. The right menu lineup, like the right sports team starting lineup, is what creates the potential for success and profitability. It all begins with the right menu items, at the right price, delivered in a manner that makes them attractive to your customers. The fundamentals of our game–pricing, cost control systems, etc.–are there to protect and support this potential success and natural menu “talent” by ensuring that the hard work of the menu items is not lost to simple execution errors. Without the right menu, however, the best pricing and food cost control systems in the world will not be able to make a profitable restaurant.

Author: Stuart Amoriell
Article Source: EzineArticles.com
Provided by: Electric Pressure Cooker

Small business grants are closer than you think. They can also be the ideal way to fulfill your dreams of becoming a business owner. It is often a hot topic among entrepreneurs with limited funds and access to capital. They are given to those people who want to start their own small business as a means of supporting themselves while at the same time contributing to the US economy. Business grants are also provided by the US government. Remember, Small Business Grants are not loans and that’s why many people refer to them as Free Grant Money!

Business Grant or Business Loan…?

Grant programs don’t require credit checks, collateral, security deposits or co-signers. In some cases recipients are required to submit periodic progress reports to demonstrate that the grant funds are being utilized properly and goals are being achieved as projected in the application. Grants differ from loans in that they are not repayable. We all know what it takes to get a common loan…like auto loans, home loans, cash loans, etc. Why not try a free grant program that writes the grant for you and also addresses every issue you’ll need to cover before submitting it to the proper agency.

Business Grants Do What?

Business grants are one way that women can run successful businesses whether they have a home-based business or a business outside of the home. They are available to start a new or expand an existing business, equipment financing, acquisition of a new or existing business, rent, salaries, office expenses and overhead. Given to women who are small business owners to encourage and promote economic growth as well. Grants are available to anyone over 18 years of age. In fact, the small business grant you need to start or expand your business may be available right in your own home state.

The Purpose of Grants

A grant supports the business idea and turns the dreams of an entrepreneur in to reality. There are many types of grants offered by the government that include individual grants for personal necessities, business grants for starting new business, housing grants, ,education grants for funding education and many more.

Business Grants & Women

Grants are also available for women who want to buy an existing business. They are also available for women who want to attend business school so that they gain the knowledge they need to start their own business. They are also awarded to women who excel in their respective fields. The best part about business grants is that they are free in the sense that you do not have to pay back the money to the funding agency or the government. Women can also get money to encourage advanced online education have a distinct advantage over any business that leaves advanced learning to chance. Businesses that fall into this arena often find they are eligible for small business grants.

There are Other Options…

Also remember that the federal government, through the SBA, does offer a fine array of very attractive loans to start or expand a small business. There are also low interest and no Interest Government loans available for you to take full advantage of. Most small business owners have to look to personal resources and loans to finance their small business. You may have looked into bank loans, asked friends and family for a loan or looked into getting a few credit cards to pay for you to set your business up.

Grants for Women

Women have the largest opportunity of any group to benefit from the generosity of the Government Grant Programs. Women are taking more initiative to work for themselves. Womens small business grants are available in many forms. Women continue to account for the majority of stay at home parents. Women interested in accessing small business grants to start or expand their own businesses should understand certain limitations inherent in small business grant funding. Women have a 75% greater chance of success in business ownership.

Grants for Education

Education is a priority for any government, and for this reason the government. Education grants are available from various sources and are generally funded by the government, although many are established and sponsored by private institutions. They can vary in the amount of the grant as well as the period the grant is made available to the student. Women are also much easier to qualify for and get than education grants. Scholarships are also available for a myriad of situations.

A Little Info about the SBA

SBA does not provide lower interest rates for small businesses. SBA is not related to granting any free government grants, but instead it provides counseling, technical trainings and assistance in areas which are required to run a small business management using its resourceful SBDC or Small Business Development Center at absolutely NO extra Cost to you, its totally FREE. SBA has offices in every state and worked with various non-profit, lending and educational and training organizations nationwide. SBA also runs programs that are intended to help women with training and technical assistance, access to credit and capital, government contracts and such. As far as individuals are concerned, SBA does not offer business grants to any entrepreneur but it does help the minority groups, the women entrepreneurs, economic development of underdeveloped regions, and numerous such activities.

Author: J Pickett
Article Source: EzineArticles.com
Provided by: How Electric Pressure Cookers Work

In sales, it is the simple actions that generate the greatest results. If your desire is to increase sales, then take some time to crunch your key sales numbers. Taking this action allows you to work smarter not harder. So what are those key sales number?

I am continually amazed at the number of small business owners or sales professionals be them manufacturers, retailers, distributors realtors, mortgage brokers, insurance agents, financial advisers, lawyers, accountants, information technology consultants and even business coaches who do not now their numbers. No wonder they are working harder not smarter.

Here are some critical key numbers that every sales professional should know to be able to efficiently and effectively increase sales:

• Total Sales for the last 12 months
• Average sale value for the last 12 months
• Number of active clients (those conducting business within the last 12 months)
• Number of sales transactions for the last 12 months
• Historical sales growth for the last 5 years
• Average profit per average sale for the last 12 months

Let’s say that you currently generate $240,000 in sales. Breaking this down further means on average that you receive:

• $20,000 in sales per month
• $5,000 in sales per week
• $1,000 in sales per day

Now you determine that your average sale is $100 and this means that you must have 10 orders per day to make your current sales levels. You want to increase your sales from the historic growth of 7%-9% to at least 15% which is almost double your historical growth and starts to make you feel somewhat uncomfortable. Yet, you know that your marketplace is growing, more and more competitors are hanging up their signs so you believe that this is possible. Sales Coaching Tip: To be competitive means you must leave your comfort zone and that will make you uncomfortable.

To reach your new growth goal means an additional $36,000 in new sales or $3,000 more a month. This translates to 30 more transactions per month (average sales value is $100) or 1.5 more new sales per day. When you begin to crunch the numbers, securing another 1.5 sales does not seem that impossible.

Now you further realize that your existing customer base of 100 active clients make on average of 2 purchases a month. By doing the math, you quickly determine that by increasing monthly purchases to 3 for 10% of your customers, you can easily pick up another $12,000 in sales. Sales Coaching Tip: Look for the low hanging fruit that is probably there, but you ran by it because you just did not see it.

In reviewing your inactive clients of 300, you notice that some of them buy once a year. If you make sure that just half of them buy twice a year, instead of just one time, you can add another $15,000 to your total sales. Sales Coaching Tip: Working with existing client is much more cost effective than trying to find new customers.

Finally, in your historical growth you receive an average of 10 new customers per year. Your research suggests that only one third of them will buy twice a month and the rest will purchase only one time. This results in another $12,000.

Your projections look something like this:

• $12,000 from additional monthly purchases for 10 existing customers
• $15,000 from one additional purchase from 50% of inactive customers
• $12,000 from historical growth of 10 new customers
• $39,000 in total projected new sales by focusing on just 3 sales areas

All of a sudden you see that you can achieve your sales goal and with some additional sales to spare. This activity is much like answering the question: How do you eat an elephant? Answer: One bite at a time. By taking small bites in specific areas, you can increase sales.

Now you understand the importance of knowing your sales numbers. So get the #2 pencil out or the Excel spread sheet and start crunching those numbers!

Author: Leanne Hoagland-Smith
Article Source: EzineArticles.com
Provided by: Programmable pressure cooker

It is a well-known fact that the financial department of any organization, whether large, medium or small needs a good bookkeeper or an accountant who can execute accounting services efficiently. One is always searching for a person who can handle these enormous as well as never-ending records perfectly. With Accountant New York, this task can be achieved easily. As accounting demands a great deal of responsibility and maintenance one has to make sure that he hires the best accounting professional for his firm.

With the assistance of an accountant New York, the company’s records are kept confidential and maintained on a regular basis. In fact, an accountant helps in accelerating the company’s profit and reduces losses. In addition, when a question of maintenance of accounting records arises, then one does not have to look around for help instead! Simply hire an accountant New York professional who can offer the best and most accurate services for keeping accounts. In fact, accountant New York assists the organization in avoiding goof ups and unwanted problems that are usually witnessed during the period of financial year. It further helps you to relax, while they are at work of the organization. In fact, these chartered accountants have loads of experience to their credit and they are very well aware of the fact that they cannot commit mistakes in relation to financial records as it can lead to various problems for their clients in the future especially during tax planning and execution period.

A good accountant New York additionally helps in reducing both financial and work force resources of the company that he or she is serving. As it is the responsibility of an accountant to do things accurately and within the short span of time. However, there are several accounting firms and vendors providing accounting services on a large and small-scale but once you have hired accountant New York professional then worry no more. To make accountant New York work properly, all you need to do is to provide the assigned accountant with financial records and other related information about your organization. As accounting is all about making impossible possible by creating fact full and accurate invoice generations, payment records, billing statements, trail balance profit and loss account, balance sheet and debit and credit reports in real-time.

An accountant New York professional in addition, offers a variety of accountancy software that helps the organization to maintain and keep financial reports easily accessible and without any hassle. The software is specially designed in a way that is easy to use and handle, as well as stores numerous data for its clients. It additionally enables to store data related to the transactions that have taken place throughout the financial year and is easy to find at a click of a button or a mouse rather going through various accounting books. Hence, an accountant New York is a best bet you can have to handle various accounts and financial records. In fact, it offers a best support your business and also helps business to elevate. Moreover, it further helps in shedding the overload of the people involved in maintaining the records page by page. Therefore, with the accountant New York you can take a chill pill.

Author: Peter Terry
Article Source: EzineArticles.com
Provided by: PCB Prototype & Manufacturing

Several of our previous restaurant cost control articles have been dedicated to the topic of recipe cost and menu development. This article will continue on that trend by examining the principles of menu engineering and how they can help improve restaurant profitability and food cost control. Today’s concept of menu engineering is a product of Michigan State University’s School of Hospitality, and the goal of the exercise is to comparatively rank your menu items according to both profitability and popularity and to then graph these results using the BCG Matrix. This matrix utilizes four quadrants, and though the names have changed a bit during their application to the hospitality industry, their meaning has remained generally consistent.

Quadrant Definitions:

“Stars” are those menu items that are both the most popular and the most profitable. These are often house specialties and are the menu items that you want to sell most frequently due to their high contribution margin.

“Plowhorses” are menu items that are above average in popularity, but not in profitability. Overall, these items produce consistent profit for the business, but are not stars because their contribution margin is below average.

“Challenges” are the converse of plowhorses. They are highly profitable menu items, but not very popular.

Finally, “Dogs” are those items that are neither popular nor profitable, in comparison to your other menu items. Serious consideration should be given to eliminating these items from the menu.

The Mechanics of Menu Engineering:

To determine the correct quadrant for each menu item, menu engineering looks at both the average popularity and contribution margin of your menu items. Based on the results, each menu item is plotted on a graph, using the average profitability and popularity as the x and y axes. Each quadrant corresponds to a particular menu engineering label, as illustrated below. While menu engineering labels can be assigned to menu items without actually completing a graphical representation, we do not recommend this. Completing a graphical menu analysis in addition to simply labeling each menu item with the appropriate quadrant tag will provide a more exact and complete picture into how each menu item ranks in comparison to others. A plotted menu item that is on the border of another quadrant may require a different approach than one that is firmly situated in a specific quadrant–a subtlety that is only noticeable when menu items are actually plotted on the graph. While this may seem complicated, it can actually be quite simple once you become familiar with the process. Further, by downloading our free menu engineering spreadsheet you will be able to execute many of these functions and graphs automatically.

Popularity

Determining the average popularity is relatively simple, just take the reciprocal of the total number of menu items, expressed as a percent. For example, if you have twenty menu items, the average popularity would be 5% (1/20). Any menu item that represented more than 5% of the overall product mix sold would be considered a popular item, making the item either a star or a plowhorse, depending on the contribution margin of the item. To keep things simple, both popularity and profitability are automatically calculated in our free menu engineering spreadsheet.

Profitability

Menu engineering uses contribution margin as the metric for defining profitability. To calculate the contribution margin of each item, one simply needs to deduct the ideal food cost from the menu price for each menu item. For example:

Menu Item Contribution Margin

Once the contribution margin is calculated for each menu item, the average can be easily calculated–divide the sum of each menu item’s contribution profit by the total number of menu items. Any menu item that has a contribution margin above this average would be considered “profitable,” making it either a challenge or a star, depending on the popularity of the item. Some schools of thought advocate the use of prime costs in contribution margin calculations, including incremental labor costs into the food cost figure, but unless this is a typical internal cost accounting practice for your operation, we do not recommend it.

Once you have determined the comparative popularity and profitability of each item, you can then graph the results using the specific calculations into a four quadrant graph and identify each item with the corresponding matrix label, as discussed previously. Again, to assist with executing the above steps, we recommend that you download our free menu engineering spreadsheet that will do these calculations for you. You can also develop your own restaurant spreadsheet with a little work or purchase one from various restaurant consultant agencies. Once this process is complete, however, the real work begins.

Analyzing the Results of Your Menu Analysis

The primary benefit of using menu engineering as your menu analysis tool is that after only a little preliminary work and calculation, you are able to get an in depth picture into how well your menu items perform in comparison to each other. With this information in hand, it becomes much easier to make strategic menu decisions aimed at improving restaurant profitability. Further, the repetitive use of menu engineering over a period of time will help you gauge the effectiveness of past menu decisions, such as price changes, re-formats, deletions & additions, position changes, etc.

Challenges: A Few Suggestions & Solutions

As we discussed before, challenges are those items that have a high profit margin, but don’t sell very well. Because of their high contribution margin, the “challenge” for these items is to think of ways that profit margins can be maintained, while making the item more appealing to customers.

What do your guests think?

If you are trying to figure out why an item is not selling, start with those that are not buying. Guest feedback is typically the most accurate method in collecting information on why particular menu items are not popular. Based on this guest feedback, changes can be made to improve the popularity of items. Collecting guest feedback doesn’t mean holding hospitality focus groups sessions, of course, it just means doing restaurant table visits and talking to guests–paying particular attention to repeat, loyal guests that may be able and willing to provide valuable insight into some of their least favorite menu items.

Is the profit margin driven mainly by a center of the plate item?

If so, maybe the answer is maintaining the center of the plate menu item and portion size, but changing the preparation method. For example, chicken saltimbocca may not be a very popular dish on your menu, but by changing the preparation to chicken marsala, you may be able to create a dish that has the same profit margin as the previous dish, but is now more popular. This flexibility is very common among pasta, veal and seafood dishes, as well.

Is there a minor problem with the recipe that may need adjusting?

This issue is similar to the previous example, except that it does not call for a re-working and re-naming of the entire menu item, but rather just a tweaking of the recipe. This is an issue that is often times brought to an operator’s attention through guest feedback. Typical examples of this issue are food being too spicy or bland, too tough, inconsistent in quality, inadequate portion size, etc. These are important issues to identify to ensure a consistent guest experience and satisfaction level. Once identified, operational systems and changes can be put in place to correct the recipe or preparation deficiency.

A final note on this subject is that we recommend that a log be kept of all guest feedback. Using this log will enable you to look back over a period of time and identify any menu item comment trends that may not have been apparent during each individual guest comment. Many times, these mistakes are caught only after the repeat “comping” or voiding of items off checks, but the use of a log should help identify these trends prior to this happening–saving both money and guests.

Are people aware of the item, or is it buried in the menu? Is the menu description appealing?

Putting menu items in the “sweet spots” of menus, or highlighting them with bold font or boxes, can help drive attention to those items and increase sales. Further, using your staff to suggest a dish as a favorite or feature can go a long way in getting a profitable challenge item sold. Also, attempts at promoting an item through improved menu placement, staff recommendations or re-worked menu item names or descriptions will help identify whether the menu item has a marketing or culinary problem. If it is only a marketing issue, then these solutions may be sufficient to move a profitable menu item into the star quadrant.

Is the quality specification for the menu item ingredients appropriate?

Sometimes, operators can create overly restrictive quality specifications that result in higher menu prices than guests are willing to pay. In other words, guests do not perceive enough value in the higher quality specification of a product ingredient to pay more for the menu item because of it. Think of all the quality identifiers that we see on menus: line caught, wild, choice, organic, certified angus beef, imported, free range, grass fed, kobe, sushi-grade, etc. The decision regarding when it is best to opt for a higher quality, and more expensive, product is not always an easy decision. While we never advocate lowering quality simply as a way to increase profit, the quality specification of menu item ingredients needs to consider whether the clientèle values this identifier and whether the quality level is appropriate for the menu item use. Choice strip loin, for example, may be the best product for your NY Strip, but may not be the best product for your burgers. Trying to persuade your guests to pay three dollars more for their burger because it is made with choice meat may, or may not, work. It is always nice to serve the finest available ingredients, but the necessary increase in the menu item price means that the guest must value the quality enough to pay more, as well. In short, overly restrictive product specifications for menu ingredients can sometimes create higher prices for menu items, thereby turning a potential star into a challenge due to guest price sensitivity. It is always a best practice to look at the specifications for your menu item ingredients to ensure that your are purchasing the products best suited for their use.

Is the price too high?

Recalculate your ideal food cost for challenge menu items to make sure they seem reasonable. Further, we recommend doing market research to find out what other restaurants are charging for similar menu items. It is possible that what you perceive as a reasonable ideal food cost for a particular menu item actually leaves the item priced significantly above market competition.

If your ideal food cost for a challenge menu item looks a little too good, or if competitors consistently offer a comparable product at a lower price, you may want to consider lowering the price a bit to kick start sales. Remember, your price may be higher than competitors because of either your portion sizes or quality specs. As mentioned previously, this should be examined if guests seem to be favoring competitor products at lower prices, despite a reduction in the quality or portions. Tweaking the menu item a bit and then lowering the price may put the item back in line with market competition, thus improving sales while maintaining margins.

Plowhorses: A Few Suggestions & Solutions

With plowhorses, the problem is not popularity, but profitability. The goal with these menu items, therefore, is to find ways to improve upon the profitability of an item, without sacrificing its popularity.

Is the item so popular because it is priced too low?

If so, tweaking the price a bit might improve profitability without significantly impacting the popularity of the menu item. Again, executing some basic market research will help indicate the price range and market “white space” available when deciding on a menu item pricing strategy. If a menu item is significantly priced under market standards, and is struggling with profitability, then an operator probably has some room to raise the price without seriously impacting popularity.

Is the portion size too big?

While it is important to ensure that guest loyalty is not compromised by reducing portion sizes on popular items, it is possible that too much food is being served on particular plowhorse menu items. The best place to learn whether this is the case is in the dishroom. By watching how much leftover food is being wasted, operators can quickly determine if the portion size they are serving is more than expected by guests. In this case, making an adjustment will improve profitability, without impacting the popularity of an item.

Are the right ingredients being used to produce the item?

This, again, is a question about using the right quality specification for menu item ingredients. For plowhorse items, quality and specification issues are a factor when operators use higher quality ingredients without adequately charging for the increased cost of these items. Often times, this is because they realize that guests won’t pay the additional cost for a higher quality product ingredient in certain scenarios. Rather than using a different specification, however, operators use the higher quality product, but just fail to charge for it. While this is admirable, it can have serious implications on profitability. Using high quality ingredients is always a recipe for success, however, guests must pay for this added quality. So, the real goal is to use the highest quality ingredients that your guests value and are willing to pay for.

Can the preparation be tweaked to improve the profit margin?

In some cases, a popular item can be redesigned so that the price can be raised, creating a higher contribution margin. One example of this has been the increased focus on sandwiches and bistro salads as menu items. Realizing that guests desired having sandwich and salad options on the menu, and realizing that these items often times had low price points and relative small contribution margins, operators began designing large bistro salads and signature burgers/sandwiches. The end result was taking popular menu items and re-designing them so that they could fetch a higher price.

Dogs: A Few Suggestions & Solutions

Typically, our recommendation with dogs is to remove them from the menu. There is no point wasting inventory dollars on items that are neither profitable nor popular. These items just confuse the menu, drawing attention away from those items that you are trying to sell. Further, these items increase product spoilage, kitchen training and labor costs, as well as creating an overall decrease in kitchen productivity due to a more complex menu.

Stars: A Few Suggestions & Solutions

Keep selling these items! Make sure that these items stay well positioned on the menu and that you stay on top of your operational systems to ensure that these items remain consistent. Dropping the ball during execution of these items can be very dangerous, as increased inconsistency on star menu items can lead to a decline in popularity–which can have very negative effects on profitability.

In conclusion, nine out of ten times, each dollar of profit is generated from an order off the menu. Whether you are a quick service operation with menu boards and combo meals, or a five-star, relais gourmand restaurant with tasting and pre fixe menus, the choice of what menu items make the lineup, what their price will be and how they are positioned and delivered to your guests will determine how well your menu is able to drive revenue through to your bottom line. The right menu lineup, like the right sports team starting lineup, is what creates the potential for success and profitability. It all begins with the right menu items, at the right price, delivered in a manner that makes them attractive to your customers. The fundamentals of our game–pricing, cost control systems, etc.–are there to protect and support this potential success and natural menu “talent” by ensuring that the hard work of the menu items is not lost to simple execution errors. Without the right menu, however, the best pricing and food cost control systems in the world will not be able to make a profitable restaurant.

Author: Stuart Amoriell
Article Source: EzineArticles.com
Provided by: Smart cooker

In sales, it is the simple actions that generate the greatest results. If your desire is to increase sales, then take some time to crunch your key sales numbers. Taking this action allows you to work smarter not harder. So what are those key sales number?

I am continually amazed at the number of small business owners or sales professionals be them manufacturers, retailers, distributors realtors, mortgage brokers, insurance agents, financial advisers, lawyers, accountants, information technology consultants and even business coaches who do not now their numbers. No wonder they are working harder not smarter.

Here are some critical key numbers that every sales professional should know to be able to efficiently and effectively increase sales:

• Total Sales for the last 12 months
• Average sale value for the last 12 months
• Number of active clients (those conducting business within the last 12 months)
• Number of sales transactions for the last 12 months
• Historical sales growth for the last 5 years
• Average profit per average sale for the last 12 months

Let’s say that you currently generate $240,000 in sales. Breaking this down further means on average that you receive:

• $20,000 in sales per month
• $5,000 in sales per week
• $1,000 in sales per day

Now you determine that your average sale is $100 and this means that you must have 10 orders per day to make your current sales levels. You want to increase your sales from the historic growth of 7%-9% to at least 15% which is almost double your historical growth and starts to make you feel somewhat uncomfortable. Yet, you know that your marketplace is growing, more and more competitors are hanging up their signs so you believe that this is possible. Sales Coaching Tip: To be competitive means you must leave your comfort zone and that will make you uncomfortable.

To reach your new growth goal means an additional $36,000 in new sales or $3,000 more a month. This translates to 30 more transactions per month (average sales value is $100) or 1.5 more new sales per day. When you begin to crunch the numbers, securing another 1.5 sales does not seem that impossible.

Now you further realize that your existing customer base of 100 active clients make on average of 2 purchases a month. By doing the math, you quickly determine that by increasing monthly purchases to 3 for 10% of your customers, you can easily pick up another $12,000 in sales. Sales Coaching Tip: Look for the low hanging fruit that is probably there, but you ran by it because you just did not see it.

In reviewing your inactive clients of 300, you notice that some of them buy once a year. If you make sure that just half of them buy twice a year, instead of just one time, you can add another $15,000 to your total sales. Sales Coaching Tip: Working with existing client is much more cost effective than trying to find new customers.

Finally, in your historical growth you receive an average of 10 new customers per year. Your research suggests that only one third of them will buy twice a month and the rest will purchase only one time. This results in another $12,000.

Your projections look something like this:

• $12,000 from additional monthly purchases for 10 existing customers
• $15,000 from one additional purchase from 50% of inactive customers
• $12,000 from historical growth of 10 new customers
• $39,000 in total projected new sales by focusing on just 3 sales areas

All of a sudden you see that you can achieve your sales goal and with some additional sales to spare. This activity is much like answering the question: How do you eat an elephant? Answer: One bite at a time. By taking small bites in specific areas, you can increase sales.

Now you understand the importance of knowing your sales numbers. So get the #2 pencil out or the Excel spread sheet and start crunching those numbers!

Author: Leanne Hoagland-Smith
Article Source: EzineArticles.com
Provided by: Pressure cooker

Accounting is the process of collecting, summarizing and analyzing the financial data of your business. Every business needs do keep on top of their accounts to ensure proper management of revenues and expenses. Failure to do so could cause your business to fail.

There are two ways of keeping accounts for your business, one is enlist the help of an accountant and the other is to buy some accounting software and manage the accounts yourself.
Lots of people are worried about accounts and tax and would rather pay for an accountant to do all the work for them, however this might suit some people but not everyone. With hiring an accountant this will be quite costly and the cost will depend on the size of your business and the amount of financial data it generate. If you are just starting up a business you could collect all of the information and hire an accountant once a year. Most accountants work on an hourly basis so depending on how long it take them to work out your accounts will depend on how much you have to pay them. If you keep all receipts and invoices in date order this could keep your accountant fees to a minimum.

Another option is to invest in good accounting software. You do not need to have any knowledge about accounting as most good software is very easy to use with simple steps that anyone can follow. More and more business are using accounting software as the price of an Accountant can be quite steep whereas accounting software is a one of payment. There are lots of different types of accounting software for small and larger business and for lots of different types of businesses. Some accounting software can work for all size businesses with modules that you can add as your business grows and your accounting needs grow.

Some of the many benefits of having accounting software are:

Saves time

Saves money

100% Accuracy

Up to date accounts always available

Quick access to information

They are just a few of the reason why accounting software is best option for any business. Accounting software will make your business management much better, much more efficient and easier. You will be able to access the up to date data with a simple click of the mouse giving you the competitive edge that all business need to have in this day and age.

Choosing the right software is a very critical. You should always do your research before you buy any accounting software. With the internet it is not a problem as you can find reviews, websites and talk to users of software to find the best one for your particular business. I would talk to many different users and read many different reviews and then weigh up the benefits of each. Once you have chosen the right one then your business can grow and expand without any worries about finances. The software will free you time up so you can get on with your job.

Author: Carolyn Clayton
Article Source: EzineArticles.com
Provided by: Make PCB Assembly

Several of our previous restaurant cost control articles have been dedicated to the topic of recipe cost and menu development. This article will continue on that trend by examining the principles of menu engineering and how they can help improve restaurant profitability and food cost control. Today’s concept of menu engineering is a product of Michigan State University’s School of Hospitality, and the goal of the exercise is to comparatively rank your menu items according to both profitability and popularity and to then graph these results using the BCG Matrix. This matrix utilizes four quadrants, and though the names have changed a bit during their application to the hospitality industry, their meaning has remained generally consistent.

Quadrant Definitions:

“Stars” are those menu items that are both the most popular and the most profitable. These are often house specialties and are the menu items that you want to sell most frequently due to their high contribution margin.

“Plowhorses” are menu items that are above average in popularity, but not in profitability. Overall, these items produce consistent profit for the business, but are not stars because their contribution margin is below average.

“Challenges” are the converse of plowhorses. They are highly profitable menu items, but not very popular.

Finally, “Dogs” are those items that are neither popular nor profitable, in comparison to your other menu items. Serious consideration should be given to eliminating these items from the menu.

The Mechanics of Menu Engineering:

To determine the correct quadrant for each menu item, menu engineering looks at both the average popularity and contribution margin of your menu items. Based on the results, each menu item is plotted on a graph, using the average profitability and popularity as the x and y axes. Each quadrant corresponds to a particular menu engineering label, as illustrated below. While menu engineering labels can be assigned to menu items without actually completing a graphical representation, we do not recommend this. Completing a graphical menu analysis in addition to simply labeling each menu item with the appropriate quadrant tag will provide a more exact and complete picture into how each menu item ranks in comparison to others. A plotted menu item that is on the border of another quadrant may require a different approach than one that is firmly situated in a specific quadrant–a subtlety that is only noticeable when menu items are actually plotted on the graph. While this may seem complicated, it can actually be quite simple once you become familiar with the process. Further, by downloading our free menu engineering spreadsheet you will be able to execute many of these functions and graphs automatically.

Popularity

Determining the average popularity is relatively simple, just take the reciprocal of the total number of menu items, expressed as a percent. For example, if you have twenty menu items, the average popularity would be 5% (1/20). Any menu item that represented more than 5% of the overall product mix sold would be considered a popular item, making the item either a star or a plowhorse, depending on the contribution margin of the item. To keep things simple, both popularity and profitability are automatically calculated in our free menu engineering spreadsheet.

Profitability

Menu engineering uses contribution margin as the metric for defining profitability. To calculate the contribution margin of each item, one simply needs to deduct the ideal food cost from the menu price for each menu item. For example:

Menu Item Contribution Margin

Once the contribution margin is calculated for each menu item, the average can be easily calculated–divide the sum of each menu item’s contribution profit by the total number of menu items. Any menu item that has a contribution margin above this average would be considered “profitable,” making it either a challenge or a star, depending on the popularity of the item. Some schools of thought advocate the use of prime costs in contribution margin calculations, including incremental labor costs into the food cost figure, but unless this is a typical internal cost accounting practice for your operation, we do not recommend it.

Once you have determined the comparative popularity and profitability of each item, you can then graph the results using the specific calculations into a four quadrant graph and identify each item with the corresponding matrix label, as discussed previously. Again, to assist with executing the above steps, we recommend that you download our free menu engineering spreadsheet that will do these calculations for you. You can also develop your own restaurant spreadsheet with a little work or purchase one from various restaurant consultant agencies. Once this process is complete, however, the real work begins.

Analyzing the Results of Your Menu Analysis

The primary benefit of using menu engineering as your menu analysis tool is that after only a little preliminary work and calculation, you are able to get an in depth picture into how well your menu items perform in comparison to each other. With this information in hand, it becomes much easier to make strategic menu decisions aimed at improving restaurant profitability. Further, the repetitive use of menu engineering over a period of time will help you gauge the effectiveness of past menu decisions, such as price changes, re-formats, deletions & additions, position changes, etc.

Challenges: A Few Suggestions & Solutions

As we discussed before, challenges are those items that have a high profit margin, but don’t sell very well. Because of their high contribution margin, the “challenge” for these items is to think of ways that profit margins can be maintained, while making the item more appealing to customers.

What do your guests think?

If you are trying to figure out why an item is not selling, start with those that are not buying. Guest feedback is typically the most accurate method in collecting information on why particular menu items are not popular. Based on this guest feedback, changes can be made to improve the popularity of items. Collecting guest feedback doesn’t mean holding hospitality focus groups sessions, of course, it just means doing restaurant table visits and talking to guests–paying particular attention to repeat, loyal guests that may be able and willing to provide valuable insight into some of their least favorite menu items.

Is the profit margin driven mainly by a center of the plate item?

If so, maybe the answer is maintaining the center of the plate menu item and portion size, but changing the preparation method. For example, chicken saltimbocca may not be a very popular dish on your menu, but by changing the preparation to chicken marsala, you may be able to create a dish that has the same profit margin as the previous dish, but is now more popular. This flexibility is very common among pasta, veal and seafood dishes, as well.

Is there a minor problem with the recipe that may need adjusting?

This issue is similar to the previous example, except that it does not call for a re-working and re-naming of the entire menu item, but rather just a tweaking of the recipe. This is an issue that is often times brought to an operator’s attention through guest feedback. Typical examples of this issue are food being too spicy or bland, too tough, inconsistent in quality, inadequate portion size, etc. These are important issues to identify to ensure a consistent guest experience and satisfaction level. Once identified, operational systems and changes can be put in place to correct the recipe or preparation deficiency.

A final note on this subject is that we recommend that a log be kept of all guest feedback. Using this log will enable you to look back over a period of time and identify any menu item comment trends that may not have been apparent during each individual guest comment. Many times, these mistakes are caught only after the repeat “comping” or voiding of items off checks, but the use of a log should help identify these trends prior to this happening–saving both money and guests.

Are people aware of the item, or is it buried in the menu? Is the menu description appealing?

Putting menu items in the “sweet spots” of menus, or highlighting them with bold font or boxes, can help drive attention to those items and increase sales. Further, using your staff to suggest a dish as a favorite or feature can go a long way in getting a profitable challenge item sold. Also, attempts at promoting an item through improved menu placement, staff recommendations or re-worked menu item names or descriptions will help identify whether the menu item has a marketing or culinary problem. If it is only a marketing issue, then these solutions may be sufficient to move a profitable menu item into the star quadrant.

Is the quality specification for the menu item ingredients appropriate?

Sometimes, operators can create overly restrictive quality specifications that result in higher menu prices than guests are willing to pay. In other words, guests do not perceive enough value in the higher quality specification of a product ingredient to pay more for the menu item because of it. Think of all the quality identifiers that we see on menus: line caught, wild, choice, organic, certified angus beef, imported, free range, grass fed, kobe, sushi-grade, etc. The decision regarding when it is best to opt for a higher quality, and more expensive, product is not always an easy decision. While we never advocate lowering quality simply as a way to increase profit, the quality specification of menu item ingredients needs to consider whether the clientèle values this identifier and whether the quality level is appropriate for the menu item use. Choice strip loin, for example, may be the best product for your NY Strip, but may not be the best product for your burgers. Trying to persuade your guests to pay three dollars more for their burger because it is made with choice meat may, or may not, work. It is always nice to serve the finest available ingredients, but the necessary increase in the menu item price means that the guest must value the quality enough to pay more, as well. In short, overly restrictive product specifications for menu ingredients can sometimes create higher prices for menu items, thereby turning a potential star into a challenge due to guest price sensitivity. It is always a best practice to look at the specifications for your menu item ingredients to ensure that your are purchasing the products best suited for their use.

Is the price too high?

Recalculate your ideal food cost for challenge menu items to make sure they seem reasonable. Further, we recommend doing market research to find out what other restaurants are charging for similar menu items. It is possible that what you perceive as a reasonable ideal food cost for a particular menu item actually leaves the item priced significantly above market competition.

If your ideal food cost for a challenge menu item looks a little too good, or if competitors consistently offer a comparable product at a lower price, you may want to consider lowering the price a bit to kick start sales. Remember, your price may be higher than competitors because of either your portion sizes or quality specs. As mentioned previously, this should be examined if guests seem to be favoring competitor products at lower prices, despite a reduction in the quality or portions. Tweaking the menu item a bit and then lowering the price may put the item back in line with market competition, thus improving sales while maintaining margins.

Plowhorses: A Few Suggestions & Solutions

With plowhorses, the problem is not popularity, but profitability. The goal with these menu items, therefore, is to find ways to improve upon the profitability of an item, without sacrificing its popularity.

Is the item so popular because it is priced too low?

If so, tweaking the price a bit might improve profitability without significantly impacting the popularity of the menu item. Again, executing some basic market research will help indicate the price range and market “white space” available when deciding on a menu item pricing strategy. If a menu item is significantly priced under market standards, and is struggling with profitability, then an operator probably has some room to raise the price without seriously impacting popularity.

Is the portion size too big?

While it is important to ensure that guest loyalty is not compromised by reducing portion sizes on popular items, it is possible that too much food is being served on particular plowhorse menu items. The best place to learn whether this is the case is in the dishroom. By watching how much leftover food is being wasted, operators can quickly determine if the portion size they are serving is more than expected by guests. In this case, making an adjustment will improve profitability, without impacting the popularity of an item.

Are the right ingredients being used to produce the item?

This, again, is a question about using the right quality specification for menu item ingredients. For plowhorse items, quality and specification issues are a factor when operators use higher quality ingredients without adequately charging for the increased cost of these items. Often times, this is because they realize that guests won’t pay the additional cost for a higher quality product ingredient in certain scenarios. Rather than using a different specification, however, operators use the higher quality product, but just fail to charge for it. While this is admirable, it can have serious implications on profitability. Using high quality ingredients is always a recipe for success, however, guests must pay for this added quality. So, the real goal is to use the highest quality ingredients that your guests value and are willing to pay for.

Can the preparation be tweaked to improve the profit margin?

In some cases, a popular item can be redesigned so that the price can be raised, creating a higher contribution margin. One example of this has been the increased focus on sandwiches and bistro salads as menu items. Realizing that guests desired having sandwich and salad options on the menu, and realizing that these items often times had low price points and relative small contribution margins, operators began designing large bistro salads and signature burgers/sandwiches. The end result was taking popular menu items and re-designing them so that they could fetch a higher price.

Dogs: A Few Suggestions & Solutions

Typically, our recommendation with dogs is to remove them from the menu. There is no point wasting inventory dollars on items that are neither profitable nor popular. These items just confuse the menu, drawing attention away from those items that you are trying to sell. Further, these items increase product spoilage, kitchen training and labor costs, as well as creating an overall decrease in kitchen productivity due to a more complex menu.

Stars: A Few Suggestions & Solutions

Keep selling these items! Make sure that these items stay well positioned on the menu and that you stay on top of your operational systems to ensure that these items remain consistent. Dropping the ball during execution of these items can be very dangerous, as increased inconsistency on star menu items can lead to a decline in popularity–which can have very negative effects on profitability.

In conclusion, nine out of ten times, each dollar of profit is generated from an order off the menu. Whether you are a quick service operation with menu boards and combo meals, or a five-star, relais gourmand restaurant with tasting and pre fixe menus, the choice of what menu items make the lineup, what their price will be and how they are positioned and delivered to your guests will determine how well your menu is able to drive revenue through to your bottom line. The right menu lineup, like the right sports team starting lineup, is what creates the potential for success and profitability. It all begins with the right menu items, at the right price, delivered in a manner that makes them attractive to your customers. The fundamentals of our game–pricing, cost control systems, etc.–are there to protect and support this potential success and natural menu “talent” by ensuring that the hard work of the menu items is not lost to simple execution errors. Without the right menu, however, the best pricing and food cost control systems in the world will not be able to make a profitable restaurant.

Author: Stuart Amoriell
Article Source: EzineArticles.com
Provided by: Wordpress plugin Guest Blogger