1. How to Calculate Your Menu Prices Prepared by: John Smith http://www.BarBusinessBlog.com

2. Designing your first menu is a fun activity! Deciding how to calculate your menu prices is not as fun… We’ll cover the basics of pricing your menu, using a step-by-step process.

3. Calculating Food Prices Find the cost of each item We do mean every single item! Use this formula: Purchase cost ÷ Portion This is the portioncost. So if you buy 100 pounds of meat and it cost $1.50 per pound, your purchase cost would be $150. If you use a half pound of meat per portion in your meal, you take $150/200 (half pound divided by 100) to make a $0.75 per portion.

4. Calculating Food Prices 2. Add the costs together to total each dish Meat: $0.75 Vegetables: $1.50 Condiments: $0.25 Total: $2.50 3. Divide Food Cost by a Percentage Most bars and restaurants have a food cost of around 30% to 35% of the total price. $2.50 ÷ 30% = $8.33 $2.50 ÷ 35% = $7.14

5. Calculating Food Prices 4. Adjust the price for the menu A price of $8.33 or even $7.14 is really weird to see on a menu right? Adjust to a level that most customers are familiar with. $8.33 -> $8.50 $7.14 -> $7.25 or $7.00

6. Calculating Food Prices 5. Be prepared to change the price How you price your foods will vary from time to time. You will have to meet competitors and the changing market by raising and lowering of your prices. In general, people can handle a move within a dollar than outside of a dollar. $5.75 to $6.50 is a higher “change” than $7.25 to $7.95. Most customers only look at the first digit.

7. Calculating Drink Prices 1. What is your pour size? Before you begin to price your drinks you need to know your pour size. The pour size is simply how much alcohol a customer gets in his order. Most drinks are 1 ounce or 1.5 ounces; so in a liter of alcohol, you can get at maximum 33 ounces of alcohol. Use this formula: Price of per bottle ÷ number of ounces

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10. PremiumThis type of pricing does lead to some irregularities, but it is generally okay for drinks (which require no preparation). The exact price to charge per drink is tough to say, use a percentage that will allow you to compete favorably with competitors, but also appeals to customers. Use this formula: Price per ounce ÷ percentage

11. This slideshow was prepared by John Smith. Get more information on starting a bar business by visiting this post or by going to http://www.BarBusinessBlog.com today! Image provided by: Simon Howden / FreeDigitalPhotos.net