How to Rein in Food Costs
Food costs can make or break a restaurant business. If owners are not up-to-date on their inventory, supplier pricing, and waste management, they can experience significant cuts to their profit margins. If your business needs more help to manage expenses, here we outline five things you can start doing today to rein in your food costs.
Manage Inventory Regularly
To get the most bang for your buck, you need to manage your inventory and portion control regularly. When food is being wasted, you need to adjust your supply levels and find creative ways to cut back on the waste. Knowing what is being used a lot and what isn’t can help you get better control of your profit margin. An inventory management software makes this easier than ever.
When it comes to food prices, they are anything but consistent. For instance, beef and dairy has experienced sharp increases over the past few years and not always in line with market conditions. That’s why you need to pay special attention to food prices and when they increase and decrease. This will allow you to engage in more affordable alternatives when the prices rise, and offer more of an abundance of certain food items when the prices drop. By tracking food prices, you can alter your menu to keep your profits in check.
Make Your Own
Prepared food is often way more expensive and spoils faster than when you prep it on your own. Instead of wasting money on pre-chopped vegetables, spend more time preparing the food to cut back on cost.
Know Your Product Grades
If you own a steak restaurant, you’ll need to have the highest grade of beef available for your customers. However, you don’t need the highest grade of tomatoes or lemons for instance. The number one grade will always be more expensive than the second-grade products. Know what grade you require for each of your materials and purchase appropriately.
Price Menu Items Properly
It’s very important to set the prices on your menu to cover your overhead costs while still having the ability to attract customers. Your prices should adequately reflect the market you are in and the value your customers expect, without impacting your bottom line. And if a menu item has dropped in popularity, consider changing the price, or switching it out altogether. Every item on your menu should be purchased frequently, and include ingredients that are in other menu items so you get the most out of every ingredient without waste.
Putting food saving actions into play is only as strong as those implementing the procedures. Train your employees on how to better manage food costs and consider purchasing an inventory management system that can help you save more on food costs and increase your profits.