View Full Version : Pricing
07-30-2012, 07:54 PM
I am opening small restraunt and trying to figure out some pricing. I'm in a small town trying figure out a reasonable price for brisket. Sandwich and platter with two sides and a drink
07-30-2012, 08:28 PM
I've personally been in the business for quite a few years and looked into opening my own place a few times here is my advice not knowing your background (trying to be helpful)
If you haven't figured it out yet, how are you going to be acquiring your product? I guess what I'm inquiring is do you know what your food costs are, especially what your yield is going to actually be? Keep in mind that what you pay (raw cost) before cooking is going to increase in cost/lb greatly (depending on the protein). So a packer brisket @ $2.32 lb. coming in the door raw may end up being upwards of $3.00 or more a lb. (your cost) after it comes off your pit.
That being said, your money will be in your sides and beverage sales. You can run a higher meat cost by absorbing it with cost effective (for you) sides and beverages.
I would shoot for an overall food cost of below 30% to be safe and try to hang your beverage cost between 15-20%. An example would be as follows:
Brisket/Bun/Sauce, your cost:$1.40
Menu Price: $5.00, your food cost 28%, you clear $3.60 profit to pay for utilities/labor/rent...you get the idea
I hope this helps you out a bit, definitely start with the food coming in the door and then work it out from a % stand point. Concerning where you may need to be price point wise, check into local cities. Look online or call around to get menu prices and that will let you know where you need to possibly be. Then you can start costing things out and compare to where you'll be versus where everyone else is. If you'd like for me to elaborate on anything further I wouldn't mind lending a hand.
07-30-2012, 08:36 PM
I appreciate that. I figured 5 per sandwich.
Butt Rubb'n BBQ
07-30-2012, 09:49 PM
You got some great advice from ardorx. I only have one thing to say about that, a 28% food cost is almost a unreachable number to obtain. I have been in the restaurant business my entire life and very few restaurants are hitting those numbers. I'm sure he speaks from experience and has reached those numbers so I'm not trying to knock him down at all and my hat is off to him being that successful. In reality 80% of new restaurants fail in the first year. Just remember that overhead is the killer. I noticed you said small that is great way to start and you can add on later. Man, I wish you the best and hope you have good fortune. I am jealous to say the least. Just one more thing before you open make sure you have food reps from someone like Sysco, US Foods etc fight for your business. They have several percentages to play with. Good luck!
07-30-2012, 09:51 PM
I am paying $2.89lb here for whole packers and getting 50% yield on them. So that makes my cost $5.78lb coming off the cooker. Divide by 4 for 4oz sandwich $1.45 add a bun .18 cents that make it $4.89 at cost x 3 and $6.52 at cost x 4 which is more where I would need to be with a restaurant probably.
I sell a 5oz brisket sandwich here vending for $5.95 and am not getting rich.
07-30-2012, 10:35 PM
Agreeing with the above, it's a crazy world out there (more like vicious) in food service. I'm in a corporate setting right now that isn't red meat heavy at all, and our theoretical is coming in around 31.7% for the past month or so. I agree with getting your rep on your side. They have pull within the area and will really be able to help get your word of mouth out. I assume that you plan to offset your meat cost's with pulled pork as well as chicken or something that is poultry related? Getting my product from Us Foods, I can vend a 1/3 lb. pp sammy for $5.00 and profit $4.02 or 19.6% my cost.
Pick our brains if you have ?'s I love to see the "little guy" succeed even though I'm in a corporate setting.
Keep in mind with the dry summer we have had, meat costs in general are about to go through the roof. We are looking at $2.13 lb. (OUTRAGEOUS) on chicken wings before this winter arrives, and that is with a negotiated contract.
07-30-2012, 11:18 PM
A basic rule of thumb when pricing that works. Take cost + $1 x 3 = selling price. That covers overhead and costs and leaves you a profit. Good luck with the business! Small is best.
07-31-2012, 01:07 PM
Thank u guys for the help
07-31-2012, 01:58 PM
Everything said above is right on the money, the only thing else I would add is that you need to see what the competition is doing in your area. Send in a few secret shoppers to see the pricing, service and quality of the meal.
08-01-2012, 04:46 AM
excellent posts question how do you negotiate wuth the food service providers for lowest price-ex usfoods sysco,swift?
08-01-2012, 01:55 PM
This is usually done with your rep in your area. I've worked in a few different cities in the southeast with pfg, sysco and us foods and can say that not all reps are created equal. Some are more willing than others to help out. Beyond prices, a good relationship with a rep is key to ensuring things go smoothly overall. Some reps will work much harder than others to ensure your being taking care when things need to be substituted or they are going to be out of stock. If starting small I would look into a local cash n carry that may do delivery as well (our local is Halsey) and they definitely help out the "little guy" and their minimums are usually much less.
08-06-2012, 09:30 AM
Yup Souther Magic got it right cost x 3= pay the rent.
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