Restaurant Management Tips for Controlling Food Cost

Restaurant food cost is one of the biggest challenges for independent restaurant owners to manage. And there are so many factors about food cost that you can’t control. But even with all the things you can’t control, I can think of 10 restaurant management tips for controlling food cost. Click to watch the video or keep scrolling to read the 10 tips.

One: implement a key item report. This is a simple report where you count things every shift, five to 10 items, maybe 15, so they're not stolen. It prevents theft and lowers your food cost.

Two: implement a waste sheet. Any time there's a mistake, or something is wasted, stolen, spoiled, you can track it. Then you can fix these waste-driven habits on a daily basis. A waste sheet is a proactive management tool to lower food costs.

Three: implement a purchase allotment system, what I call the Restaurant Checkbook Guardian. By having forecasted sales, a target budgeted food cost, tracking your daily sales and all of your purchases by category, you can very easily tell your managers how much money they can spend without going over budget. They’ll conserve your cash and lower your food cost.

Four: implement an invoice log. To effectively use the purchase allotment system, you have to track invoices by category to know the invoice from Sysco was not all food, paper, janitorial, small wares don't belong. You want to track just the food portion in order to use that system and also accurately calculate our actual food cost. It saves you time and money when you know your numbers. 

Five: implement a line checklist. Going down the line, make sure the right portion controls are in the right places, checking temperatures, making sure the line is set up properly, and you’re not throwing away product or over portioning product. It saves you money. 

Six: implement a temperature checklist to monitor your refrigeration units. That way you’re not surprised some morning when the walk-in cooler is dead and you have to throw away thousands of dollars of product. When you've got your managers checking temperatures throughout the day, you can see where there's a problem and avoid losing thousands of dollars in product.

Seven: sign up for a GPO, a group purchasing organization. They have collective buying power so you can get products cheaper or get rebates. By buying the same groceries you buy right now and free to you, a GPO can make a difference and lower your food costs.

Eight: implement recipe costing cards. I tell restaurant owners the two most important systems, any restaurant should have are recipe costing cards and budgets. Recipe costing cards allow you to know what your ideal food cost is, to look at ideal usage and make sure the guest gets the same experience every time they order their favorite meal because you’re putting out the same portion every single time. Not only does the guest win with consistency, but you win because you're not wasting product and you're driving your cost of goods sold down because you're following the recipe cards.

Nine: routinely calculate your ideal food cost based on no waste, no theft, no spoilage, perfect recipe costing cards we just talked about, plus your mix report from your POS system. Now you’ll know the food cost for your restaurant instead of basing it on some national average or some number picked out of the air.

10: routinely engineer your menu. Once you know your ideal food cost and you’re using your product mix report, you can determine what prices to raise, what to get rid of, what to move around, what to add. And you can change your food cost and maybe drive it down three or even seven points the first time through.

If you want to take control of your restaurant's food costs, these are 10 great restaurant management tips for controlling food cost that you need to put in place.

Many of these systems can easily be implemented with a spreadsheet, but to really maximize results, I want you to think about signing up for any software out there that can help you control your food and beverage costs. Food cost control software is critical to making all those things be seamless. But again, some can be done with simple clipboards and some spreadsheets. Don't give me an excuse why it can't be done. Show me how it can be done. And then you're on your way to lowering your food cost.

If you would like to learn how to own a restaurant that doesn't require all your time and freedom, watch this free video course that teaches you three key principles to running a successful restaurant.

Be sure to visit my YouTube channel for more helpful restaurant management video tips.