Restaurant Management


Controlling Food Cost, Introduction

What many startup restaurants have not considered seriously, is the actual cost of what they are placing on the plate, believing that serving a “good meal at a cost everyone can afford” is the best philosophy to operate the business by, so it should be, if, that meal is properly costed and priced at a price that is fair to the consumer and the operation.

Reducing costs while maintaining quality, consumer favor, and profit is the job of everyone involved in the business, of course management, chefs, and FOH managers carry the burden to be sure policies are implemented and followed, yet it is the entire staff who need to be made aware of the need to maintain such policies.

While the chef will create a standard in plating, recipes and operations, a line cook who does not follow those standards can quickly destroy the budget and create a loss in the operation. Over portioning, cooking that causes returned food, preparing batch recipes with ingredients other than those specified, forcing a need to remake the batch, not following food safety guidelines, FIFO ignored, theft and on and on. Every mistake means more money spent to correct it, translating into reduced profits. A cook who prepares 3 wrong (unpaid for or comp meals) per shift can cost the restaurant up to 50 dollars per shift, or more than 13,000 dollars per year, this may represent a third of his salary. It is a heavy burden of loss for most restaurants, (large or small,) to employ just that one errant cook, multiply this by  a multitude of staff and by three shifts per day, a nightmare scenario quickly appears.

FOH staff carries the responsibility as well, offering free meals when not authorized to do so, mixing wrong beverages, over portioning, poor service resulting in comps, theft, unauthorized staff meals (grazing), bleeding the clock (signing in early and out late) all these leads to a poor bottom line and heavily damages the profits of the establishment.

Recently, after visiting a restaurant to hear one of favorite musical artist, I presented with a restaurant bill that was half what it should have been, why, the server made several mistakes during the night (both her and the operations fault,) so she thought it best to give me a discount, great for me, not so much for the business, as the entire discount was unauthorized, she did not have the authority to do it but did it anyway, how many more did she do that evening alone?  That discount was 35 dollars, should she be doing that once a day for each of her 5 shifts a week she is would lose the restaurant a sum of 9,100 dollars in a year. What if she is doing this 3 times a night (highly probable,) or, several severs do the same on each shift, the compound loss can get into the six digits yearly, this literally “grand theft”.

Maintenance share the responsibility as well, under maintain equipment and failures will occur, a compressor failure on a simple reach in refrigerator can cost 2200 dollars in a repair bill, this will negatively affect the operation as well. Using too much, or, not enough required chemicals also have a costly consequence.

If each department (BOH, FOH,  maintenance) contributed to saving  just 3% (that’s just 1% each) on 1 Million dollars of revenue they would save the operation 30,000 dollars, (that is a lot of money,) especially, when you think of it in turnover of guests, an operation receiving an average 15.00 cover  must turn over 2,000 customers to recoup that 30,000.

When policies are created, implemented and fully explained to staff both at hiring and ongoing through the employment tenure (gentle, friendly reminders) then the pay check (profit) the owner receives will reflect the investment made in the establishment. A lack of standards  and implemented policies always result in the closure of the establishments. The higher costs (food, beverage, utilities, labor, rents, gas and water) rise, the higher our standards should also rise.

Over the next writings, we will examine areas that will maintain the food costs and keep the restaurant operation in a profitable fashion. We will examine areas of The Math of Food Costing, Menu Pricing, Recipe Standardization, Purchasing, Receiving & Storage, Production & Service, Security & Safety and finally Technology.

If you are employed in any capacity in the restaurant operation, then you carry the responsibility to be cost effective. Most establishments have profits in pennies per plate not dollars, so to be a penny pincher in a restaurant is a good thing.

Over the next few weeks watch for our daily additions to this writing to help you operate in profits, the Penny Pinchers way.

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