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Do you have a cost control strategy?

Success comes through monitoring, adjusting and improving performance

Thursday 27 April 2017

Most restauranteurs know that controlling food and beverage costs is essential for the success of their business.  Even so, many will admit they are not confident are as they should be.

There are three basic stages to controlling food and beverage costs; planning, execution and measuring the results.  Failure to include any of these points will lead to lost profits.

  1. Planning.  In order to establish that your costs are too high you first need to know what they should be.  You need to first calculate the cost of each menu item.  This means agreeing the portion size, quantity of each ingredient used for every menu item.  These costings should be updated regularly.
     
  2. Execution.  The next step is to calculate the overall costs based on sales mix.  Once you have this you can see at a glance any variance to the expected costs.

    In order to achieve the ideal costs, you need to ensure that you are preparing and portioning your dishes correctly.  Make sure everyone knows and understands the recipes and has been trained to produce and serve each dish, correctly.
  3. Measure the results.  Finally, you need to adopt an effective system to measure actual costs.  Only by comparing your actual costs with the expected or ideal costs will you know if you have a cost control problem.

    The first step is get an accurate sales mix report.   Next you must routinely calculate your food and beverage costs for a specific period.  This is done by completing a full stocktake and recording purchases (opening stock + purchases – closing stock = actual cost). 

    By comparing your actual result with your “theoretical result” can you see if you have a cost control problem.

 

All of this takes time, which is something that is always scarce.  This is something we can help you with.  We utilise a cloud-based management system designed specifically for pubs and restaurants. 

If you don’t have time to monitor your performance or to calculate your costs our team will be more than happy to assist by setting up a database for you, monitor data records and send you weekly reports.  If you are a multi-site operator then you will love the head office/area reports and shadow P & L’s.

To discuss your needs just give me a call, or drop me an email, or complete the enquiry form on our contacts page of the website and we will help you transform your business.