Food costs eat up a large portion of your restaurant’s budget. But, do you know just how much?
In this article, we look at hidden food costs – the money sappers of your restaurant.
To maintain a profitable restaurant, there are some things you can do to rein in the costs, and we’ll look at those, too.
Food waste is one of the biggest money sappers at your restaurant.
Food waste happens when you order too much fresh produce or meat before you need it, and it spoils. To avoid this, order your fresh fruits, vegetables and proteins daily. Highly perishable items should be ordered very carefully.
When it comes to specialty items such as locally-sourced produce, assign the job of ordering to one person so you can eliminate or decrease your waste.
Control Portion Size
Another area to watch for when it comes to hidden costs is your portion sizes.
Watch what your servers and bussers are throwing away. Are they consistently dumping lots of food?
If so, you may want to adjust your portion sizes to help cut costs. If you’re serving too much food, and guests aren’t eating it, it’s time to readjust.
You can downsize your portions while still charging the same amount for the item, especially since your customers aren’t able to finish current portion sizes.
Pay attention, though, if your downsized dish still leaves your guests satisfied.
Something else to consider when it comes to portion size is the amount of food your chefs are plating. For example, if you serve 3 ounces of chicken, it should always be that amount. If your chefs are serving portions that vary in size, you are incurring waste.
The way you order food for your restaurant affects your hidden food costs.
The best way to control your costs is to order accurately. Know how much you need, and how much you’ll use.
Negotiate your food prices with vendors. You can almost always bring them down some on costs.
Then, order items like dried beans and rice in bulk to save money.
Now that we’ve looked at the hidden costs of your restaurant’s money sappers, let’s look at how to calculate your food costs.
Track Your Food Costs
Keep a tight watch on your inventory.
In fact, the best way to track your costs is to check your inventory on a daily basis.
You also want to look at which menu items are selling and which ones aren’t. Then, the next week, you can adjust your food orders.
By tracking your food costs, you can also tell if you have any theft occurring or excessive waste problems.
Calculating Food Costs
Now that we’ve looked at hidden food costs, it’s a good idea to know what you’re spending on each menu item.
Remember that your overall food costs
include not only your food, but your overhead. Follow these steps to figure out your food costs:
• List all ingredients in your dish.
• Calculate the cost of each ingredient. For example, if you pay 25 cents for a tomato, it yields eight slices, and you use two per dish, your cost would be about six cents.
• Add up the cost of all the ingredients in your dish to determine its food costs.
• Divide the menu price by the food cost. This lets you determine the percentage of the price that comes from the food. For example, if you sell a menu item for $10, and the costs of the item are $5, your food cost is 50%.
• Figure out your overhead cost. Think labor, rent, expenses and marketing. Once you’ve determined your daily overhead cost, divide that by the number of customers you think you’ll serve that day. For example, if your overhead is $1000 per day, and you serve 200 customers each day, your overhead cost per person is $5.
• Decide on your target food-cost percentage. For example, if you sell a menu item for $10, and you have a $5 overhead cost, your food cost must be no more than $5 to break even and even less to turn a profit.
• Check out your current menu prices to see if they cover your overhead and food costs and increase your revenue. Adjust – raise or lower the prices - as needed.
At the end of the day, the best way to manage your food costs and put an end to this money sapper, is to remain vigilant.
Manage your food on a daily basis. Know your inventory. And, work with your staff and your food vendors to reduce waste by plating accurately and ordering wisely.
Pay attention to your menu items and have a working knowledge of your inventory, and you’ll be well on your way to eliminating these hidden food costs.
How do you handle food costs – the money sappers at your restaurant? Do you have tips for our readers? We’d love to hear them. Please share below.