Restaurant Profitability Blog

The Only Thing You Can Control is Your Food Costs

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Managing your food costs is a constant challenge.

So is being your restaurant’s head honcho. But we don’t need to tell you that.

You’re living it. Every. Single. Day

Simply put, restaurants never run perfectly. You’re the boss, but you’re not all-powerful.

Though you work all day trying to keep things running smoothly, much of the process is out of your hands.

It’s just the reality of running a restaurant. Things go wrong. And often it happens when you least expect it.

Sometimes, it’s small things, like a customer leaving with a fork and spoon in their doggy bag.

Other times, things may go so haywire that even a composed pro like you may find a few more gray hairs.

And those type of catastrophes you can’t really control or plan for. But, If there’s something we’re sure about, it’s that you can have nearly full control over your food costs.

So even though you’re dealing with problems at a mile a minute, with careful attention, you can easily manage – and decrease – your food costs and make a huge difference in your restaurant’s overall profitability.

The Laundry List of Things You Can’t Control

Like we said, stuff happens.

And, yep, it sucks when there’s not much you can do about it. But that’s part of owning a restaurant.

Much of what you can’t control has to do with your staff. Sometimes they show up late. Other times they show up for the wrong shift. Often they might not even show up at all.

They might hide out in the bathroom to text their friends when they should be running customer orders. They may goof off with other employees when they’re supposed to be stocking the bar. Or maybe you hired someone who is a bit clumsy and drops things more often than you can count.

For someone trying to run a successful business, we know this can be extremely frustrating to deal with.

People will be people. And those people will sometimes drop the ball (or plate).

Needless to say, it’s a good idea to implement specific workplace policies, protocols, and proper training. There’s no way to make these 100% effective, but having them in place and sticking to them will help you round up your staff at least a little bit.

There are also many other aspects of your business that are totally out of your hands.

What if your dishwasher decides to start leaking all over the floor? You certainly didn’t tell it to.

Or maybe your delivery guy takes one too many left turns and ends up stuck in gridlock.

That’s not to mention incidents that occur due to crazy weather or natural causes, unexpected personal business, construction in your neighborhood, angry customers…the list goes on and on.

You know that with so many factors that could go wrong at any moment, owning a restaurant is not an easy or stress-free task.

It’s unpredictable. It’s crazy.

We aren’t here to tell you that you can be totally and completely prepared for everything that this industry will throw your way.

But we can tell you that a good sense of humor, a bit of “just in case” emergency preparedness, and a focus on the aspects of your restaurant you CAN control, you can stay in the driver’s seat even when it feels like your restaurant is flying off the road.

How to Take Control of Your Restaurant’s Fate

Let’s talk about the one thing in this entire business that you can control – your food costs.

In general, costs will probably continue to increase over time – that you, unfortunately, can’t control.

But there’s lots you can do to make sure that you are fully aware and knowledgeable and can be ready to combat them.

Sure, it’ll take some time, research, a keen eye, and some strategizing, but it’s not rocket science.

With that said, here’s a simple step-by-step formula that will make managing your food costs a cinch. In the process, it’ll help you save some cash, too.

Step 1 – Keep an Eye on Your Weekly Inventory

Each week, you should be keeping track of your inventory. And you need to do it well.

Once you know exactly how much of a given ingredient you have on hand, you’ll now have a pretty solid idea of how much you’ll need to stock up on for the coming week.

Having an accurate knowledge of your inventory means, among other things, you can order exactly what you need and nothing more.

Plus, it’s the first step you take in order to calculate your Cost of Goods Sold, AKA the most important metric for monitoring your food costs.

On top of that, your restaurant will be able to drastically reduce food waste, which in turn significantly reduces wasted food costs.

Needless to say, that’s a huge win-win for your wallet and the world, considering the 133,000 billion pounds of food that are wasted each year.

It’s a time-consuming, yet important process. But with the proper restaurant technology, your inventory can be streamlined for you. No more long hours of counting, monotonous data entry, or fudged numbers.

Step 2 – Set a Budget

If you want a profitable restaurant, then you’re going to have to start getting serious about budgeting.

In order to obtain a tight yet achievable budget, you should establish weekly team meetings with your managers to discuss and examine the past week’s sales numbers and food spend.

By doing this, you’ll be able to come up with a solid sales estimate for the coming week, which you will use to help shape your budget.

It’s vital to not just carelessly throw numbers around. Take your time and come to an informed decision. This will help you set a food spend budget for the week that fits your restaurant’s overall goals.

Try numbers out. If you’re off one week, no harm, no foul. Adjust it for next week with your newly-gained knowledge from last week.

In the end, setting a realistic, hard numbers-based budget will help you control your foods costs and will paint a clear picture of your restaurant’s long-term profitability.

Step 3 – Have Educated Chats With Your Suppliers

You should never, ever, ever go into a conversation with your suppliers unaware or unprepared. So why do you continue to get let yourself get gouged by price creeps?

In order to keep your food costs low, it’s important to know the exact market price for each ingredient you’re buying.

Yes, it will take some time to do your due diligence and look up and compare prices. But we’re here to tell you it’s well worth your time. Because if you don’t, you’ll be overpaying.

Now that you have an idea of what you should be paying for your items, you can talk to your supplier in more meaningful and substantial ways. You can discuss plans to keep your food costs as low as possible and catch any increases in costs that your supplier was hoping you’d miss.

Step 4 – Get a Service That Does it All for You

Bet that all sounds like a bunch of work you don’t want to be bothered with.

Luckily, restaurant technology has evolved a lot in recent years. Now, you can find a service that helps to streamline all those monotonous things we mentioned for you. The tech will get your numbers in new ways, and you’ll be doing next to nothing.

Why do all that mind-numbing work when you can get the accurate, insightful numbers in a fraction of the time?

Restaurant tech can do the dirty work for you. And can help keep your food costs down as low as possible.

Which means much more time for you to spend focusing on the things that really matter in your restaurant – like the food, the customers, and your staff.

Conclusion: The Restaurant Life is Crazy, But Your Food Costs Shouldn’t Be

So you’ve got your inventory in check, a smart budget in place, and are prepared to have smart, productive talks with your suppliers.

And now you’re ready to take the leap and implement restaurant technology.

Orderly is an easy-to-use mobile app that takes care of all the nitty-gritty involved with running a successful restaurant.

While we can’t necessarily make sure your line cook shows up on time or waiters stay on the ball, we can help you maintain your food costs with easier, more accurate numbers.

Orderly generates your Cost of Goods Sold in a fraction of the time, without all the annoying spreadsheets and data entry that you used to rely on.

And with these numbers, you’ll be able to more effectively budget. No more settling for guesswork. The app will give you accurate numbers and the knowledge to smartly set your food spend goals each week.

And if all that didn’t sound great already, you can also kiss the days of having to look up and compare market prices for ingredients goodbye. Those numbers are already displayed right there in the app. Absolutely no research necessary.

All in all, Orderly puts you in control of your food costs, which will save you hundreds of hours in inventory time and thousands of dollars in food spend each month.

That’s the kind of control we like to see.

Danny BarryThe Only Thing You Can Control is Your Food Costs

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