This is one of the most frequently asked questions from restaurant owners and operators;
“How can I lower my food and beverage costs?”
In this article we will provide 5 effective steps you can take towards lowering your food and beverage costs. This outline encompasses the basic steps needed to get you on the right path to a more profitable business. You will also find we have provided a very useful Menu Analysis Template to your use. You may download it for free in section 5 below.
1. Create a consistent and profitable menu
Your menu should compliment your existing kitchen equipment, layout and the personnel’s experience level. Food would of course have to appeal to your target audience and taste delicious, while also contributing the necessary amount of gross profit. Create a manageable menu, not one that asks more than your kitchen or staff can deliver.
2. Create recipes for all menu items
Creating recipes in spreadsheets gives you the ability to link individual ingredients to your inventory spreadsheet so your recipe costs update automatically when you update your inventory prices.
A good recipe spreadsheet can also be used for batch recipes on items like sauces and mashed potatoes that have to be made in large quantities, and then portioned. Updated recipe costs can then be used to calculate your ideal food cost per menu item.
3. Evaluate your food and beverage suppliers
Review your invoices, and current inventory. Are you getting good pricing compared to other restaurants in your area? It doesn’t hurt to speak with local business owners and compare pricing, it can only benefit everyone involved.
Also, compare your own pricing history and bid suppliers against each other on a regular bases.
4. Monitor your inventory
Make sure your inventory values are up to date and conduct an inventory weekly so you can ensure a proper level and free up some cash flow. Don’t wait until the end of the month to find out if there was a problem.
5. Conduct a menu analysis
Create a menu analysis spreadsheet that helps you evaluate your best selling items and categorize all your menu items by their popularity and gross profit contribution. Here is a FREE Menu Analysis Worksheet (Template). It helps you classify your menu items into categories that assist you in evaluating your menu and determining what changes need to be made. This spreadsheet also offers helpful suggestions that can be used to strategically price and engineer your menu for better profit margins.
If you need help with your restaurant call TRG Restaurant Consulting at 877-777-6175 or email us at info@TRGrestaurantconsulting.com
