Today we shall once again talk about increasing a restaurant’s profitability. Seasoned restaurateurs know that there are two ways to do this—one is to increase sales, and the other one is to cut costs. Since we’ve already talked about increasing restaurant sales dozens of times in this blog, we felt that it’s time that we discuss the other important part of successfully running a restaurant: controlling costs.
Restaurant operators would agree with us when we say that there is, indeed, an astonishing number of ways that restaurants lose money everyday if they lack the necessary control over some aspects of their business—whether it’s in the dining room, kitchen, back office, bar or storage areas. Seeing this, operators big and small have come up with practices and procedures that are effective ways in reducing such potential losses.
We’ve come up with a few questions for you, serving as your checklist on how you manage the various parts of your restaurant business. Here’s the first of four parts, a checklist for cutting costs on your storage and inventory:
1. How high, or how low, is your inventory level?
Many restaurants often have more supplies on their shelves than what they actually need. Smart ones realize the need to evaluate their inventory levels and reduce excessive spoilage and waste, basing their reorder levels on realistic forecasts. Low inventory levels not only save you a lot of money, but will also teach your staff, including your chefs in outstanding chef hats, to handle and portion your products better.
2. How often do you make an inventory of your key items?
Your key items are the top 10 products that make up the majority of your food cost. Successful restaurateurs conduct an inventory everyday—with an opening count at the start of each day and a closing count at the end of the closing shift. They compare the figures to the actual purchases of products where these items were used on, and when the actual usage is greater than the actual purchase, they immediately investigate what’s wrong—it might be an indication of over-portioning, theft, or other food-usage problems.
3. Can you say that the usage of your kitchen products have been maximized before they are thrown away?
Such kitchen products include soups, sauces and garnishes, which often goes straight to the garbage bin after its primary purpose in the kitchen. Most restaurants’ chefs in cool chef hats make a plan to utilize these items somewhere else on their menus before they discard it. This also holds true on the shrinks and wastes of some restaurant’s in-house cuts of steaks, fish, roasted or smoked meats. And we shouldn’t forget frying oils. Smart restaurants filter their frying oil after every shift, changing it on a weekly basis. Daily filtering of oil not only enhances the taste of food, but also saves a restaurant some big bucks.
4. Do you use purchase orders?
No matter how small the operation is, keeping records is always a good practice. Regularly verify what’s on the purchase order (description of product, quantity of ordered and quoted price) with what is physically seen.
5. Do you control who, and what, goes in and out your storage area?
We’re not only talking about your storage area for expensive ingredients, but also for your towels, aprons, napkins, liquor, beer and wine. These items can pose as a temptation to even the best of your staff, so it’s always good to assign someone accountable for these items. Linen and laundry is often an overlooked area, as well as your stock of beer, wine and liquor. Most restaurants determine a fixed par level of all drinks that are stacked in their bar. They instruct their bartenders to bring their empty liquor bottles (bottles should never be thrown away) to their managers for replenishment. Needless to say, the people who hold the key to your storage area should be limited to a few personnel, if not one.
6. Do you have an established daily food preparation level?
Daily prep level pars not only controls spoilage and waste but also manages the freshness of the food that comes out of your kitchen. Know the quantity of food that you need to prepare per shift by basing it on your daily forecasts –and as much as your chefs in cool chef hats and kitchen managers have a say on this, you have to make a stand and take the necessary control.
Implementing proper procedures in storage and inventory not only save costs, but are also critical in managing the quality and consistency of a restaurant. Asking yourselves these questions would prompt you to reassess your current system and make the necessary changes needed to make your company’s routines more organized and efficient.