A menu is the core of your business. It will have a fundamental role in attracting customers, making them stay and returning, and therefore delivering profit to your business.
It will also determine your operation’s simplicity or complexity, what ingredients you need to source, and, therefore, with what suppliers you need to work.
It is one of the most important decisions you need to make, and it involves so much more than just flavor.
When we opened up our coffee shop, we did not have the budget to hire a professional chef. So we had to develop the menu ourselves. When doing so, we found out that there is so much that goes into determining a menu than just the meals’ desired flavor.
After having gone through this process, the following is the structure I would suggest for someone just starting. I truly believe that knowing this beforehand will ease the way and deliver much better results in developing your food and drinks menu.
The following are eight steps for developing a solid food and drinks menu:
- Determine your coffee shop concept, target audience, and opening hours
- Determine your food and drink categories
- Research, test and develop recipes
- Source for suppliers for chosen ingredients
- Estimate costs
- Determine pricing
- Determine the aesthetics and story behind the menu
- Launch and adjust
Read along to understand each of these steps. They will guide you to develop a solid, well-thought menu, saving you lots of time and effort further along the way.
1. Determine your coffee shop concept, target audience, and opening hours.
1.1 Determine your coffee shop concept
The concept of your coffee shop revolves around the experience you want your customer to feel. A vital part of this experience is the food and drinks people enjoy when they visit you.
Is your coffee shop directed toward the busy office worker? Or towards families with kids? Do you want it to be a cozy, quiet place? Or more of a pass quick by, busy place?
Determining your coffee shop concept is crucial as a first step before deciding your food and drinks menu.
For us, our coffee shop is located in a beautiful suburban area, right in front of a park. We decided that we wanted the coffee shop to feel like an extension of the park. Therefore we placed large windows, and the seating was on a terrace.
We decided that our concept would be: a small place, where you can sit down and relax, have excellent quality food, at a not so high price, while enjoying the view of the park, in an environmentally friendly place.
So with this being our concept, we wanted the place to feel relaxed, not upbeat. We also wanted to serve high-quality meals and drinks. Finally, we established that we did not want to charge really expensive prices. Later on, we would see how this could limit our profit, so it is something definitely to be careful.
But the important thing at this point was the experience, the ambiance, how we wanted our customers to feel, and food and drinks were critical for achieving this and having a rounded integral concept.
1.2 Explore other coffee shops
After determining the coffee shop concept, we went to visit other coffee shops to confirm, enrich or or slightly change our idea. We decided who we wanted to emulate as well as what things we did not want to do.
We studied the ambiance, the type of products they served, how customers interacted. This was very important for confirming what we wanted to achieve.
We also searched high and low over the internet for ideas.
Visiting and exploring other coffee shops can be a great source of inspiration. When done at the beginning, it can shape the way you envision your coffee shop and, therefore, the menu. It is also an excellent source for ideas about food and drink items to serve.
1.3 Determine your target audience
Your customers are the reason your coffee exists. You should aim to find out their needs and strive to fulfill them.
For us, in the beginning, we thought that our coffee shop would be directed towards young people that came to the park, it seemed natural that it would be this way. We did a small study to determine what these people would be interested in buying.
To our surprise, we found that the amount of money they wanted to spend was low, really low. Probably lower than what you would pay at a regular coffee shop. However, some percentage was interested in paying a little bit more for coffee and food.
So, after doing this study, we decided to also check out the competition. We realized that the people that visited nearby coffee shops were not necessarily the same ones that visited the park.
And that was when it hit us. The people that spent hours in the park were not our target audience. They were looking to buy a snack and soda but were not looking to go to coffee shops. On the other hand, people were coming to the area because it was starting to be popular, and the park was a part of it but not the whole story.
We continued researching, exploring, and confirmed that we would launch a coffee shop, but it would not be directed to the people that went to the park to have a snack and soda. It would be directed to the people that went to the area and would enjoy the view of the park from the coffee shop.
Also, we would aim towards employees of the various offices around the area, that also wanted nice places to go but at a not so expensive price.
Having some sort of idea of who you are aiming to satisfy will help you determine your food and drinks menu, discard some items and add others.
Location is usually highly related to the target audience, determining whether you are nearby schools and churches, offices, neighborhoods, in front of a busy street or a tourist area. Look around your coffee shop for the people that visit and try to get a sense of what their behavior towards food and drinks is.
1.4 Correlate your menu to your opening hours
Now that you have the concept of your coffee shop, and the target audience, determine what your opening hours are going to be. This is important because you may offer a different type of food and drinks at different times of the day.
Are you aiming to open for breakfast hours? For lunch or even dinner?
For us, when we did a small study, we realized that very few people were coming to the area during the early morning, on weekdays. However, for lunch, afternoon, and even evening the scenario was different. During the weekends the behavior was different, having more people passing by during the mornings.
After this, we decided that we would open from lunch to afternoon and early evening. This automatically ruled out breakfast items and kept the window open for introducing later on some alcoholic beverages.
2. Determine your food and drink categories, and portion sizes
2.1 Determine your food and drink categories
At this point, you have determined the concept, target audience, and opening hours. It is now time to determine the categories of food and drinks.
A category encompasses similar related items. For example, we determined we would serve sandwiches, salads, and pastries. For drinks, we decided to have coffee-related drinks, smoothies, and sodas.
2.2 Determine your portion sizes
We decided we wanted people to feel that they received good value in terms of quantity for the money they would give us. With this being said, the size for a sandwich should be enough for someone fo fill satisfied for lunch, with an additional side dish like a small salad.
The portion sizes will influence on the size of table wear as well.
Determine what your portion sizes should be according to your offered value and your concept.
2.3 Determine the desired complexity of the operation
Now that you have your concept established, target audience, and food and drink categories determined, it is time to figure if you are aiming towards a lean or complex operation.
A more complex operation would be to elaborate everything yourself, while a leaner operation could mean buying everything prepared in advance.
Also, depending on the categories that you established so will be the complexity. If you are serving elaborated plates for lunch, you may be in need of a chef. ‘However, if you are offering sandwiches maybe you just need an operation of assembling various ingredients.
I would recommend starting simple and then moving on forward when you are in full control over the operation and therefore have a sense of how simple or difficult it is. It is better to be adding along the way, then to start complex and not be able to deliver the desired quality.
For us, we determined a middle ground. We would prepare some ingredients on the house, like caramelized onions and baked veggies, but we would use these to assemble sandwiches. We did not need a professional chef, just someone who could strictly follow a recipe.
2.4 Think of cross-selling
It would be obvious that a coffee shop will most definitely sell coffee. What other food items go well with coffee in your region? For us, pastries and desserts were an easy sell to accompany coffee.
Cross-selling can be very important for increasing profit for your coffee shop. Coffee usually sells well at coffee shops, and tend to have a great profit margin. However, it takes a lot of units sold to achieve a good income from coffee alone.
Offering other items that can be easily sold alongside coffee can be a strategic decision to make for your business. Also, it could be a good way of setting yourself apart from the competition.
You may be interested: profit margin for a cup of coffee
3. Research, test and develop recipes
3.1 Search for recipes
Okay, so now it is time to search for recipes for your food and drink items based on your chosen categories. There are lots of sources, from the internet to books, to people you may know.
Search for recipes based on the previously established criteria, such as what do you wish to offer your customers, can you afford a complex operation or should it be leaner one?
Do a brainstorm for products before testing. You should aim to have mainstream products, ones that are no brainers for people to choose, as well as unique products. I would suggest not to incorporate many items per category. We chose to have around 6 items for each category.
Based on this brainstorming phase decide which products you will test. Ask for help if needed. You may be surprised to know people around you that would be happy to assist you with this phase of trying recipes.
3.2 Test test and test
Now that you have chosen your products and have some baseline recipes, it is time to start testing them. See what looks appealing based on your concept and desired outcome. Do not be afraid to go back and forth on the process of testing, adjusting, sourcing new recipes.
Try to enjoy this part of the process, it can be so fun. However, do not linger on it for too long, as you may feel that it can never be perfect enough for your business. Try to step yourself outside-in perspective to feel if what you are creating would be appealing for you as a customer.
Do this process until you feel comfortable enough with the end result. You can ask for help from someone who is handy with cooking if this is not something you believe comes easy for you. Do not worry if this is the case, you will be designing the menu, not necessarily cooking it.
After you have nailed the recipe down measure how much of each item is required. For this, it is highly recommended that you use a scale to measure the weight of each of the ingredients. However, you can also determine this by the number of slices of ham for example, or by using measuring scoops.
The most important thing is that you know exactly how much of each ingredient there is in the food and drink item, for calculating costs and standardizing recipes.
3.3 Determine the presentation of your dishes and drinks
Now that you have your food and drink items developed, analyze the presentation. Is there some ingredient you would like to add to the dish or drink to make it look better?
For example, you may consider asking customers if they want to add cinnamon to their cappuccino. Or spreading some herbs alongside the sandwiches, adding chocolate syrup to decorate the plate of your desserts.
These little details can transmit added value for your customers and set you apart from the competition. However, it also adds complexity to the operation and inventory.
Try to think about this at this point. If you do not do so two things can happen: 1. Later on you start adding other ingredients that were not taken account in terms of costs (this happened to us), or 2. you miss out on adding that special something more to your dishes that could stand you apart.
Also, take into account the portions you decided previously and start thinking about what type of table wear you will need for that.
3.4 Determine final ingredients
Now that you have decided on the recipes analyze the ingredients that constitute the products.
Take into consideration the following:
- What is the lifespan of the ingredients?
- Are they easy to source or hard?
- Are there suppliers that can deliver them?
- Do you have many unique ingredients or are they been shared between products?
Consider this. If you share ingredients between products you can rotate them better and reduce wastage. We shared many ingredients between sandwiches and salads. For example, the chicken that we used was the same.
Take also into consideration also that there will be some ingredients that can have a long life span, such as canned foods, others that could be frozen to last longer, while others will be needed really fresh.
For example, lettuce for salads is highly perishable and can last only a few days in a refrigerator. You must buy constantly to have high quality. On the other hand, caramelized onions, can be prepared and then frozen in portions and thawed when needed. These aspects can later be really important for the bottom line profit of your business.
4. Source for suppliers for the chosen ingredients
Now that you have your ingredients determined, it is time to source for suppliers. Buying in the local supermarket can be an easy way to start, but it is usually not the cheapest one. If you can have a foodservice supplier you will usually get better prices, although the minimum volume of purchase is higher.
Why is the sourcing done on this stage of the process? Because once you have your menu settled and printed, changing things will be harder.
If you are declaring for your customers that you have a certain product you must be prepared to deliver it every single time. It is a hassle to tell customers that you do not have a certain product. The only time this should happen is if you sell out because of more sales than expected. But it should not be the rule, it should be the exception.
So sourcing for suppliers before printing the menu can allow you to make final adjustments. It is also the difference between creating a menu and having full control over your operation.
5. Determine cost
Now that you have your foods determined it is time to calculate costs. This is crucial for the finances of your business. It is highly important that you know how much each of your food and drink items cost.
To facilitate this process, you can use a spreadsheet and make a table like the following.
Cost estimation for a ham and cheese sandwich
| Ingredient | Unit | Cost per unit ($) | Amount needed | Total Cost ($) |
| Bread | Unit of bread | 1 | 1 | 1 |
| Prosciutto Ham | kg | 23 | 0.05 | 1.15 |
| Tomatoe | kg | 1.5 | 0.1 | 0.15 |
| Provolone cheese | kg | 20 | 0.03 | 0.6 |
| Total Cost | 2.9 |
The first column specifies the ingredients that will be used to elaborate the sandwich, based on the recipe you developed in the previous step. The second column specifies the unit for the ingredient. For example, for bread, the unit will be one bread loaf, while for tomato, the unit will be kilograms or ounces.
The next column is for specifying the cost per unit of the ingredient. Finally, the amount needed of that ingredient. For example, you will cut tomato and then weight how much you need.
The final column is the multiplication of the cost per unit per the amount needed. Finally, you will sum the amounts on the last column and obtain your brute cost, which in this case is $2.9 per sandwich.
It is also important to calculate some degree of decrease. For example, if you are adding ham by counting number of pieces, these can sometimes weigh more or less depending on the width of the ham. So to be sure, you can add a 5 to 8% decrease in order to take into account possible variations.
So for this example, let’s say you have a 5% decrease or variation. So the cost will be to multiply 1.05 by $2.9, which would give a result of $3.045,
6. Estimate pricing
Next determine the pricing for your products
This can be done in various ways:
6.1 Based on your food costs and adding a percentage brute margin.
Usually, food and drink items in coffee shops can have a 60 to 80% margin, depending on if you fully elaborate products or if you source them ready. If you do source them ready, then half of that may go to your supplier.
So for example, if your food item is 1 dollar in brute cost, then you divide this by 1 minus your margin percentage. So for example, for a 60% margin, you will divide 1 amongst 1 – 0.60, or the same would be to divide 1 between 0.4. Dividing 1 in 0.40 will give you a price of 2.5 dollars.
For the example of the ham and cheese sandwich, if you divide $3.045 by 0.4, for a 60% margin, you will get a price of $7.45. Depending on the area, the competition, and other factors, this may seem expensive or cheap to customers. So it is also important to analyze the end result.
6.2 Based on competition
Another way to calculate the price is by evaluating what the competition is offering.
You may realize that when you calculate the price by using the brute margin your food product is way more expensive than what your competitors around you are offering based on a similar weight or sized product.
With this being the case you may not want to be in a disadvantage when compared to similar coffee shops. For this reason, you may wish to determine a different price for ac certain product.
The other way around can also happen. You may determine that you can charge a higher price and people are willing to pay for it. At the end, it comes down to a balance.
6.3 Based on perceived value
You can determine prices for your products based on what you believe is the perceived value and therefore how much you believe a customer will be willing to spend.
Sometimes an item that is priced higher is seen as having more value than the same item priced more cheaply.
A good rule of thumb is the following:
If you charge more people expect more if you charge less people expect less.
So the two must be correlated. Also, If you charge less than the perceived value you are losing money. If you charge more you may have unsatisfied customers with constant complaints.
Give careful consideration to pricing. It will be crucial for your business. You can change prices further along the way, but it will be harder than wrapping your head around these aspects at the beginning and saving your self explanations to customers.
7. Determine the aesthetics and story behind the menu
Okay, so you are finally set up with your categories, products, costs and prices. It is time to organize all this information on a menu.
7.1 Easy to read
Try to keep it simple and easy to read.
If you can hire someone to design the menu for you then great. But if this is not a possibility, use canva or other design programs to source a template.
The menu will probably be one of the most important pieces of communication with your customer. It integrates your concept and offers great value to your customer. It is the heart of your business.
I remember the feeling of excitement and pride when we finally had our menu printed out. It feels like a work of art because of all the work that is behind. It has your essence as a coffee shop owner.
Branding is another aspect that should be incorporated on your menu. What are the colors you have chosen for your business? Do you have a logo? These aspects should be evident in your menu.
7.2 Storytelling
You can use your menu for storytelling to have a deeper connection with your customers. Through it, you can emphasize your core values or enhance certain aspects of your coffee shop like the history behind it. It is the most important piece of communication with your customer.
For example, we would describe that the bread we used for our sandwiches was made using sourdough, and that we used only environmentally friendly materials. These were things that were in our core values: product quality and environmentally friendly.
Take the opportunity to add some value in your menu that connects with your customer. Be careful as again it should be simple and not cluttered.
8. Launch and adjust
Your menu can be adjusted further along the way as the operation matures, as you get a sense of what customers like and dislike.
Do not be afraid of letting go of products that you thought would be a great success but were not. Stick with products in your menu long enough to know a large volume of people have tested them but also do not be afraid to prune some, especially if you are adding new ones.
We started with basic categories and then, after some months, added an alcoholic drink category, with some basic alcoholic beverages like wine and beer. Because of this, we had to add some items to the menu alongside.
We took this opportunity to prune some items that were not selling that great and that we did not fully dominate because of the low sales volume. It just did not make any sense to have them. One of the pruned dishes was one of my favorite products. I had to let it go because, in the end, it is not about you, it is about your customers.
Final thoughts
Thank you for reaching this far.
This is the process we used to develop our menu. However, it is common to go back and forth through the different steps until you feel satisfied with the end result.
I truly hope this information can help you or someone you know through the process of designing or relaunching a food and drinks menu. It goes to show that there is so much more when designing a menu besides testing recipes.
Best of luck!
You may also be interested in reading:
Is it hard to run a coffee shop from an owner’s perspective
References:
Harmon, Colin. 2018. What I know about running coffee shops
Bowen, Andrew; Bowen, Claire. 2015. The Daily Grind: How to open and run a coffee shop that makes money.
Gilmartin, Hugh; Richardson, John. 2014. The Coffee Boys’ Step-by-Step Guide to Setting Up and Managing Your Own Coffee Bar: How to open a coffee bar that actually lasts and makes money