Do You Know Your Top 20 Restaurant Dishes?

Which are your top 20 restaurant dishes?

This is a question every restauranteur must be having to deal with.

How about you?

Do you know which are your star restaurant dishes?

If not, you are losing a huge opportunity.

Restaurant business is dynamic.

Customer tastes (literally!) change fast.

You need to know your revenue contributors well to keep up with this dynamism. 

Here is a step by step approach to identifying your Top 20 restaurant dishes.

9 Step Process to Identifying Top 20 Restaurant Dishes

Step 1

BEGIN with your revenue sources for your restaurant.

• Revenue Sources are the menu items or dishes in your restaurant.
• You will first look at the revenue in dollar terms of menu items.

Step 2

DOWNLOAD the menu item information from your Point of Sale System.

• Choose a particular period - at least six months.
• This will allow you to eliminate any outliers and focus on items selling well consistently.
• Choose the six month period close to your current period so that you remain relevant.
• Download menu items into Microsoft Excel spreadsheet.
• This is so that you can perform filtering and sorting where relevant.

Step 3

SORT Downloaded Food & Beverage Revenue Dollar Column for each menu item in Descending Order:

• This will automatically list your menu items in the order of revenue achieved.
• Highest revenue source menu items at the top and so on.
• You should be doing on a monthly basis to keep tabs on which items are selling well regularly.

Step 4

PICK Top 20 Dishes or Menu Items based on revenue achieved for the period.

• Compare total of revenue dollar figure for the 20 dishes or menu items,
• With total revenue figure for all menu items to see how close to the 80% they are.
• If they are much lower than 80% (say, below 70%, increase 20 items to 25 or 30).
• Idea is to cover 80% of revenue or as close as possible.
• These are the 80:20 Rule based items you should shower special attention on.

Note: Why Top 20 dishes? Because it will give you a good mix of your overall menu selection.

• You can make it Top 10 or 15 or whatever is appropriate for your restaurant.

Step 5

THIS determines your Top 20 Revenue Dishes or Menu Items as Starting Points.

• You have just arrived at your Top 20 Revenue Sources in your restaurant - great start!
• But there are still some more steps to take for further granular analysis.

Step 6

PICK the Top 20 Prices OUT OF the Top 20 Revenue Sources.

• You pick the Top 20 prices since Revenue is contributed by Price and Quantity Sold.
• For the moment leave quantity sold alone.
• You can analyze quantity sold similarly later.

Step 7

You will probably DISCOVER a few things thus far:

• Your Top 20 Prices will not ALL be in the Top 20 Revenue List.
• This means that Price is NOT the Major Revenue Source for some or many of the Top 20 Items.
• A powerful piece of information for analysis later!
• It may give you indications of whether menu items or dishes are over or under priced.

Step 8

IDENTIFY your Top 20 Prices

• Do this until you get your Top 20 Prices beyond the Top 20 Revenue items.
• This may be in the 30 or 40 menu items list.
• You will already be beginning to see some amazing patterns emerge.

Step 9

A Few things to REMEMBER about Resident, Non-Resident Covers, Check and Revenue:

• It may not be a good strategy to depend only on resident covers which are captive from occupancy of your hotel
• Have a separate strategy to add covers (thereby volume) to boost revenue.
• If necessary, use promotions to market the restaurant.
• Non-Resident covers and revenue will ensure that you are not just depending on occupancy to provide covers
• Resident and Non-Resident information is relevant only for restaurants which are located inside hotels.

The Full Monty

Want to read the full post on revenue sources of a hotel (including Rooms department) and effect on profitability?

Click for full post on Revenue Sources of Hotel and 80:20 Rule

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