Every Food & Beverage business, faces accounting and bookkeeping challenges and by providing a few tips aim at helping your business more profitable, we focus on seven (7) tips you can do to manage your food cost
1. Track Your Food Prices: It pays to track food prices and know whether they are predicted to increase or decrease. By tracking food prices, you can revamp your menu so your recipes include more affordable alternatives. 2. Conduct Inventory Regularly: Do you know where your food is going? If not, we encourage you to take inventory regularly and consistently so you can stay on top of your food usage and associated costs. Conduct an inventory of your food, beverages and serving supplies at least once per week. This helps you keep control of your costs. Taking inventory also helps you during your ordering process and keeps you from ordering too much or too little. You also know how fast items are being used. 3. Do More Prep Work: Let's face it, food that comes prepared is more expensive than food that isn’t. For example: instead of buying pre-made hamburger patties, make your own. When deciding to do this, be sure to factor in labor costs to make sure it really is saving you money. 4. Manage Waste: Keep record of all the waste your restaurant generates. Use a waste chart and write down any of the following:➤ Food returned because it was made incorrectly. ➤ Food that was spilled in the kitchen or on the floor.➤ Food that was burned in the kitchen.➤ Extra portion sizes that get thrown away.By keeping track of this, you can keep better track of your inventory and manage your food cost percentage. Additionally, then you can do what you can to reduce the instances of waste. 5. Portion Food Appropriately: This works hand-in-hand with managing food waste. Food waste can eat up your bottom line quickly. Your goal is to serve just the right amount of food and you don’t want to over or under fill plates. How do you gauge this? Watch the plates as they come back to the kitchen. Is there a lot left on the plate, or are you going through take-out containers quickly? If so, you are most likely over-portioning your meals. Consider leaving prices the same but cut back some on the portion size to help manage food costs. It also pays to work with your cooks to make sure they measure everything correctly. Hold them accountable for measuring portions evenly.
6. Price Your Items Properly: Menu pricing is an important aspect to managing your food costs. By pricing your menu items reasonably, your customers are more apt to return again and again, and you’re more likely to make a profit. The prices you charge directly affect your bottom line, so it’s important to price your menu items appropriately. It’s not a cut and dry process, but here are some things to consider when pricing your items: ➤ Direct costs are what you pay for the food itself. It involves the purchase price, portion sizes, food waste, overcooking and spoiling.➤ Indirect costs are those that involve the perceived value of your food – this is what allows you to charge higher prices.➤ Prep time and labor costs include what it takes to make the food. ➤ Overhead costs should also be taken into consideration and include décor, presentation and marketing.➤ Volatile food costs are the ones that can fluctuate due to economic conditions, drought, flooding and seasonal items. ➤ Your competition also matters when pricing your menu. Keep up-to-date on their prices so you remain competitive.➤ Your service costs are another thing to consider. Are you fast casual, fine dining or somewhere in between? Your prices should reflect the value your customers receive. If you provide full service, your pricing can be higher. ➤ Each restaurant is unique, and as such has its own pricing boundaries. You need to figure out what you can charge to make a profit while considering what your market can handle.➤ Have a contingency plan for when costs change or a supplier goes out of business to help you avoid eroding your profits. 7. Have More Than One Supplier: The first is to always shop around. Use your negotiating power to secure better deals. You can bet that your vendors have multiple prices for items, and everything is negotiable. Lastly, always stay on top of your numbers so you can help manage food costs. Be more organized and look at these numbers on a routine basis. This helps you lower food costs and increase your restaurant’s profitability.
Operating a business has its challenges, but it's important to keep your company accounting and bookkeeping records up-to-date. It will tell you the direction your business is going.
As you grow your business, listening to feedback from your customer base is crucial. Customer experience has a domino effect. If you do it well, you will see a boost in sales.
Being flexible allows you to be a better listener to your customer base, be adaptable to change, and always be ready to embrace what’s next. This will keep you ahead of the game.
There are opportunities in every business for growth and we have a wealth of knowledge and experience from working with clients in different industries. We will advise you on tax savings, provide cashflow forecasting to help you identify opportunities and areas to take action on quickly, free up your time, and set up KPI reporting that allows you to see how your business is performing over time, so you can make better decisions to grow your business.
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