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Need help/advice with menu costing

fullborebbq

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In the last three years I have turned my BBQ and sausage making hobby into a small business. I had a LLC from a previous business and I am able to use it for the new venture.
As many have said, Ribs are a tough product to make money from. You will need a vary steady clientele for them. Pulled pork is great but you will need a chamber Vacuum machine to have any chance of freezing it for any length of time, see freezer burn. Then there are all the regulations, OMG! Now I live in NYS and have a Department of Agriculture 20C facility in my home.

Not trying to squash you dreams, but if you want to do this on the up and up be prepared to spend some money and time getting yourself going.

Restaurant depot is where I get most of my meats and they are reasonably priced.

Good luck and may you make your own dreams come true!
 

chef jimmyj

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Most states require an Inspected Kitchen, separate from your home be used. All equipment must be NSF certified, meaning a professionally built smoker, though the smoker requirement seem lax in many states, judging from the pits you see on TV. I imagine California has some crazy health and Safety laws regarding Smoke Generations and how it's handled to meet Clean Air regulations.
Brian nailed it. 30% Food Cost is a good starting point but then you have to look at what the market will bear. You may have to go 40% on expensive meat to keep the Menu Price Reasonable but can go 20-25% Food Cost on what you can get Cheap. The Menu Mix should should average out at 30-33%.
Here is a Catering Costing program Brian posted a couple of years ago. See Post #4, GOOD stuff!...JJ

https://www.smokingmeatforums.com/threads/first-major-on-site-cook-quantity-questions.258793/#post-1670615
 

kevin james

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Thanks for the great info BMudd, fullbore, and chef Jimmyj! I appreciate it. The part about doing ribs closer to 40% with butts at 20%-25% makes a lot of sense, trying to hit an average food cost close to 30% or thereabout.
 

cmichini

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If it were me (and I'm contemplating a similar endeavor) I would expect at the outset:
  • Cover costs and have some margin
  • Build brand/reputation
  • Enhance skills, process, etc.
Then as the enterprse scales up, expect improved purchasing power to facilitate fatter margins & normalize the financial results.

I'd love to hear how this progresses.

Good luck!
 

bmudd14474

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If it were me (and I'm contemplating a similar endeavor) I would expect at the outset:
  • Cover costs and have some margin
  • Build brand/reputation
  • Enhance skills, process, etc.
Then as the enterprse scales up, expect improved purchasing power to facilitate fatter margins & normalize the financial results.

I'd love to hear how this progresses.

Good luck!
Food for thought for you on your thoughts. If you start lower in price to build your brand then start raising prices that will turn off a certain % of customer. But being a bit higher might turn a few off too but usually if your product is good enough you can win over the ones that think its a tad high but the ones that think you are too expensive because they knew you when you were cheap usually do not buy at the same% as before.

Just something to think about. Your time if valuable. I think you are better off at pricing right the first time and throwing a free lb of stuff in here and there to build you name and brand but make sure they know that this was free and this is the normal price.
 

kevin james

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If it were me (and I'm contemplating a similar endeavor) I would expect at the outset:
  • Cover costs and have some margin
  • Build brand/reputation
  • Enhance skills, process, etc.
Then as the enterprse scales up, expect improved purchasing power to facilitate fatter margins & normalize the financial results.

I'd love to hear how this progresses.

Good luck!
Agreed. I'm a numbers guy by nature (and career) and I think one of the things I need to take a deeper dive into are the costs that need to be prorated. Things like fuel for the smoker, and other supplies like foil and foil pans, gloves, paper towels, and smaller ingredients like spices, sugar, molasses, honey, apple cider vinegar, apple juice and other various things that go into the sauces and rubs to figure out cost and how much production per unit these items will get me through to allocate their costs properly. I also need to figure out what operating expenses I would incur, and most importantly.... I need to talk to some potential customers to get an idea of what they really want and what they're actually willing to pay for it.

One thing I'm pretty sure I have decided on is that the menu will pretty basic. Probably pork ribs (St Luis and baby backs, both wet or dry), pulled pork, and tri tip which is extremely popular in my area, plus sauce. I might do some chicken, but not sure on that one yet. As much as I personally LOVE brisket, I don't think I would sell a ton of it and it's too pricey. The tri tip would sell better and it's easier.

The good thing is I'm not in any hurry, and I'm willing to put in the time and effort needed to figure these things out. I plan to enjoy the process itself of researching and figuring all this out.
 

cmichini

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Oh, I wasn't thinking of managing price, but managing margin. So go with a fair price, and one you hope to stick with, knowing that your costs will be abnormally (or likely unsustainably) high as you get out of the gate. Then as you build volume, and can leverage economies of scale and increase purchasing power you can lower those overall costs and eke out more profit from that revenue base.

Definitely need to keep your price point in mind so as not to seem like you've gotten full of yourself and start to 'gouge'.

Thanks for the feedback though. The customer perception (price, quality, service) are so very important and can't be overstressed.

Cheers!
 

smokin peachey

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Are you going to offer any sides? I think a couple good side dishes could offer the most mark up.
 

kevin james

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Are you going to offer any sides? I think a couple good side dishes could offer the most mark up.
To be honest, I hadn't really thought of doing sides, at least not right away. I agree it is something to think about though. Good point!
 

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