In Case You Boost Your Menu Prices Because of This Minnesota Wage Increase?

N August 2014 Minnesota saw the first wave of minimum wage increases, and August 1st of 2016 has indicated another bump of gains. Small companies are now required to pay workers $7.75 per hour, whatever the business.

While employees are celebrating the pay bulge, many restaurant owners are dreading the notion of finding extra cash in their razor-thin profit margins.

There’s a fairly simple solution to cover the new costs to your company that come from wage increases.


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Raise the prices in your own menu items.

Restaurants and bars do not like the concept of increasing their menu item prices, and we know that.
You’re worried your clients will freak out and march directly to your competitors.

For starters, your opponents are in exactly the exact same boat as you, and if they would like to stay in business they’ll need to raise their pricing also. No company can keep their doors open by running negative profits margins.

Because of this, you will need to spend time calculating how much you have to lift your menu items.

1 way you can pay for the minimum wage increase is by increasing a number of your menu items prices is by decreasing others.

McDonald’s used this method when phasing out their favorite dollar menu. Since beef prices were rising and costing the business, they replaced their burgers as a dollar menu item to biscuits and ice cream cones.


They did so because those particular things are significantly cheaper and cost the franchises less, providing a greater profit margin than the soda and french fries. You can use the exact same strategy with your own menu.

How much should you increase your menu prices?

Because there are a great deal of percentages floating around out there as hints, but you should not increase them just arbitrarily.

Sit down, and take some time reviewing your POS system reports. Calculate how much you are currently paying employees and variable in the pay increases. Then decide how much gain is required to cover the cost. Estimate a bit higher to be on the safe side.

If you use a great point-of-sale system like Restaurant Manager, it has tools built inside to consolidate and monitor your food costs. These attributes can work with an extra tool, known as U.S Foods Menu Builder Pro, which provides you real-time information on the current prices for all your food products, letting you find the current costs of beef, cabbage, and the remainder of your menu items.

Having that sort of tracking can allow you to keep your food costs down, and make an educated choice on how to best increase your prices. You will need to calculate the whole unit cost of each item for your menu, and then make a percentage to make up the wage difference.

Some take away ideas.

Wages rising are bound to happen over time but your company can survive it. By reviewing your costs and food prices, it is easy to accommodate your employees increases, and catch more cash for yourself.

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