Restaurant Profitability Blog

The 7 Deadly Sins of Restaurant Inventory

No comments

Lust… gluttony… sloth…

Ok, ok… the “deadly sins” your staff commits once their shifts have ended are their business.

But there are a few secret sins that happen in just about every restaurant backroom across the country…

We’re talking about inventory sins

The unfortunate truth is that when it comes to inventory, the stakes are high.

Committing inventory sins week after week… month after month… could lead to your doors permanently closing.

After all, 82% of small businesses fail because of cash flow problems that often point back directly to mismanagement of inventory.

Because inventory is vital to the success of your business, and most operators aren’t using it to its full potential, we’re uncovering the 7 Deadly Sins of Restaurant Inventory.

It’s time to ‘fess up… how many have you committed?

Sin #1 – Ignorance

You’re the restaurant manager who walks into the storeroom at the end of the night… but only to turn off the lights… gotta keep that electricity bill in check.

The inventory is there, and that’s enough for you.

After all, it’s been a long shift… you don’t even want to think about counting what’s on those shelves.

When it comes to inventory, ignorance is not bliss.

When you skip the tough parts or ignore inventory altogether, you’re skipping out on cash that should be in your pocket.

75% of restaurant managers report problems related to food costs.

And because one-third or more of your costs are tied up in food, a significant portion of your budget is at stake if you’re not closely monitoring your inventory.

Ignoring what’s on your shelves means you’re missing the chance to:

  • Make use of foods that will expire soon
  • Work overstocked items into daily specials
  • Take a week or two off from ordering overstocked items
  • Order popular items that are running low

Sin #2 – Pride

Maybe you’re giving yourself props for taking an inventory count every week… but then you hang the clipboard right back up.

You walk away without taking a critical look at the numbers you’ve recorded.

Don’t be so proud of yourself for doing the bare minimum. Taking inventory but ignoring the numbers means you’ve wasted labor hours.

And you’ve sent your staff the message that inventory is meaningless.

You’ve also lost the opportunity to make key money-saving decisions regarding…

  • Future ordering
  • Supplier relationships that support your bottom line
  • How to adjust your food costs so that you’re staying within budget

Be a part of the 25% of restaurant managers who realize that just taking a count isn’t enough.

Digging into the numbers can have a big impact on both your food costs and… your restaurant’s financial health.

Sin #3 – Carelessness

You’re the owner who’s balancing a full dining room, running a new guacamole special, and trying to take inventory.

Sure… you’re always wearing multiple hats. That’s the job.

But rushing through inventory and being careless with your counting & calculations is a recipe for disaster.

As the owner or manager, it’s up to you to set the inventory bar for your staff.

If you count “half” the cases of chips then multiply it by 2 instead of taking a thorough count during inventory… so will your staff.

And that only adds to the likelihood of waste, theft and missed sales in your restaurant.

Committing inventory mediocrity means wasted money.

Just look at several of the ways committing the sin of mediocrity could derail your guac special (or any recipe, for that matter):

    • You eyeball the remaining boxes of tortilla chips. Looks like enough to get you through the next shift, and you’re needed in the kitchen. But had you taken a closer look inside, you would have noticed the top box was empty. Guess what? One of your servers forgot to pitch the empty box. Looks like your guacamole special will run shorter than you planned.

 

    • A couple of weeks ago, you vaguely remember ordering plenty of tortilla chips to last through the end of the month. What you didn’t account for is the recent increase in guacamole sales… meaning your guesstimate just didn’t cut the demand for the extra chips ordered to finish off that delicious guac.

 

    • Not only did you eyeball the number of chips you had in stock, but you also eyeballed the avocados in the pantry. Now you’re out of both. The money spent printing flyers for your guacamole special? Kiss it AND your would-have-been sales goodbye.

And if the above scenarios didn’t cost you enough, failing to calculate and analyze your COGS and usage reports in detail will have buried you even deeper since you likely didn’t realize your supplier increased her price of avocados by 10%.

A restaurant manager who caught the increase weeks ago (and adjusted his special accordingly) would have more money in his restaurant’s bank account. 

Sin #4 – Waste

You’ve poured out countless cartons of milk since you took lattes off the menu.

Each time you do, you make a mental note to order less next time.

Except, by the time you’re submitting the order, your mind is so consumed with everything else, that you forget all about that mental note.

If you’re not taking a careful inventory, you might…

  • Miss expiration dates on foods that could have been worked into specials before they expired
  • Order so much of one ingredient there’s no way to use it all before it goes bad
  • Fail to realize your new cooks are over-portioning ingredients

Running your COGS and usage reports following a detailed inventory count will show where the waste is occurring.

Or it will tell you if it’s time for a conversation with the line cook who’s committing the sin of over-portioning the guac.

We can’t emphasize this point enough: wasted inventory equals wasted cash.

And available cash flow equals the opportunity to…

  • Buy better quality items
  • Invest in a higher paid staff
  • Enjoy the luxury of staying in business

Dumping a carton or two of milk isn’t the worst thing you could do.

But large-scale waste doesn’t have to happen on your watch.

With a solid restaurant inventory process, you can reduce the portions of produce and protein that are finding a new home in your Dumpster.

Sin #5 – Apathy

Let’s face it. You’ve got a lot to do.

At the end of a busy day – which is almost every day – you just want to relax… not take inventory.

The simple way to avoid inventory apathy?

Train other people to take an inventory count, do price lookups, and calculate your reports for you.

It won’t take long to train 2 employees on your inventory process… and it will be well worth the time you invest.

Better yet, if you use inventory software, the process will become so much faster since technology is second nature to your employees…

Did you know 328 million workers will bring their smartphones to work in 2017? And millennials spend an average of 90 hours a month on mobile apps.

That means your staff is most likely equipped with the only inventory-taking device they need.

Sin #6 – Stubbornness

You believe in tradition.

Spreadsheets worked fine for your dad and your dad’s dad and your dad’s dad’s dad… so they’re good enough for your restaurant today.

Except they’re not.

Though the recipes that contribute to the success of your business may stand the test of time, an old restaurant inventory process could mean your business’ financial decline.

If you’re too stubborn to admit that you could be doing inventory inefficiently… or just plain wrong… it’s time to get over it for the sake of your restaurant’s health.

Outdated inventory spreadsheets are breeding grounds for errors.

Data entry takes time you don’t have… never mind the time it takes simply to get spreadsheets set up.

And the truth is… in a mobile-first world, restaurant owners and managers who are too set in their ways to embrace restaurant inventory technology will eventually go out of business.

Sin #7 – Fear

You smile uneasily as your neighbors on Restaurant Row brag about their new technologically-savvy inventory management systems.

But you fear there’s no way you can afford a shiny new system for your restaurant.

The thing is… you can’t afford not to look into the latest in restaurant inventory software.

If you fear the cost of adopting a new inventory system, know there is a restaurant inventory solution to fit each budget.

Effective restaurant inventory software calculates both COGS and usage reports… even your days on hand… and in real time.

Real time-reports mean you can make up-to-the-minute, well-informed decisions quickly… decisions that will affect your bottom line over the long haul.

Your reports are at your fingertips when you need them.

You don’t have to buy expensive software to toss yesterday’s spreadsheets. You have easy-to-access restaurant inventory apps at your disposal.

So why aren’t you using them?

Stop Committing Sin-Ventory

Ignorance… pride… carelessness… waste… apathy… stubbornness… fear.

Leave these 7 deadly restaurant inventory sins behind.

Confessing your sins means you’re acknowledging opportunities to make your restaurant more efficient… and saving money in the process.

If you choose to take advantage of those opportunities, you’re looking at a more profitable bottom line.

And who couldn’t use more money?

You don’t have to be a saint to take proper inventory. In fact, your prayers have been answered…

We’ve boiled it down to 5 easy steps for you.

And now that your sins are on the table, take action… kick those bad habits and make inventory a priority.


DOWNLOAD THE FREE APP & AVOID THE 7 DEADLY INVENTORY SINS

We don’t think you should feel guilty about your inventory process here at Orderly. That’s why we created the Orderly Inventory App.

It’s designed to help busy restaurant owners take a painless inventory… no spreadsheets, data entry, in half the time.

It’s guilt-free inventory. And it’s 100% free.

OrderlyThe 7 Deadly Sins of Restaurant Inventory

Leave a Reply

Your email address will not be published.