This guide will discuss the foundational practices that need to be in place to track and lower food, labor, and overhead costs.
- Part 1: Budget
- Part 2: Reducing Labor Costs
- Part 3: Reducing Food Costs
- Part 4: Reducing Overhead Costs
Part 3: Reducing Food Costs
Food cost is the biggest cost of running a restaurant. It is also one of the most controllable expenses. How well you control your food cost determines how profitable your restaurant is.
A 20-30% food cost is a good rule of thumb for most restaurants but will vary depending on the restaurant type. For most restaurants, if you are operating over 35% you may need to look closely at what is happening to gain more insight and control. But even those running lower can squeeze more profits out of your sales by following a few industry best practices, such as:
Reduce waste. To reduce the amount of spoilage in your restaurant, use the first-in / first-out method. It may take a little longer to unload shipments but moving the older stock to the front of the shelves and putting the new stock behind it will ensure that you are not wasting good product. Also, be sure to mandate date labeling on all perishable products to help with storage and rotation.
Rethink your menu. Run a product mix (or menu item count) report to see the total amount of each menu item you sold for a particular time. Items that are only sold a few times a month should be removed from the menu. There is no need to buy product for menu items that you are not selling.
Multipurpose product. Finding ways to use product in multiple dishes will save you money by buying in bulk and also help you move through the item quickly to avoid spoilage. For example, let’s say you use artichoke hearts in only one salad recipe. You can either change the recipe to take them out or find new ways to use them before they go bad, such as on a pizza or pasta dish or special.
Portion control. Make sure that your employees are using a scale every time they prep and portion. Seasoned employees may feel confident enough to eyeball 10 oz of crabmeat, but if he/she over portions by even 1⁄4 ounce it will add up over the month. With restaurant margins being so low, this can be significant over time.
Study your voids/comps. It is important to look at your voids and comps every day to see if there is a pattern. Does the menu item not meet the customer’s expectation? Is the kitchen making a consistent mistake and need retraining? Is a certain manager comping his/her friends’ or family’s tab on a regular basis?
There are many more ways to lower your food costs. Some are straightforward while others take some creativity, but even the smallest savings will add up over time. Start with these few steps and go from there