The Math Behind Accurate Restaurant Ordering

As a restaurant owner, are you afraid to give up ordering because everyone else orders too much product? Is the over ordering emptying your bank account, so much so that you're finding it hard to pay your bills? Or maybe you're just frustrated because you're running out to buy product because no one is ordering enough. Or worse, you're having to 86 items, and not in a good way, to run your restaurant. As a result you might feel like you have to place all the orders or keep a toxic leader in your kitchen employed because they're the only ones who know how to order. None of these situations are good for your restaurant’s success or your own sanity. That’s why in this video I'm going to share with you how you can Implement a system where anyone who is trained to count can place darn near a perfect food order when they know the math behind accurate restaurant ordering.

The Restaurant Order Wizard is a part of my Restaurant Prosperity Coaching systems library. When correctly used it truly can change your world. Using it and the right data, I could place an order from my desk here in Phoenix, Arizona, more accurately than anybody in your kitchen. Imagine what it could mean for you if you had a system like this in place. Now I'm going to teach you the math behind it so you can create it yourself.

To set your par levels for ordering properly using the Restaurant Order Wizard, several things need to happen:

1. Gather the right information. If you're using software it's easy to export and dump information in an Excel spreadsheet or document and then copy and paste it into the spreadsheet because the equations are easy. If you’re not using food and beverage software for managing inventory and ordering and recipe cards and such, you're going to have to gather the data. Grab a descending case report from all your vendors. Make it for the same time period so that it all lines up. Put it in the spreadsheet. I'm going to warn you the moment you call your sales rep and ask for that descending case report, they're going to wonder if you’re shopping them. Just let them know you're trying to set your pars. You want it in a spreadsheet format so you can copy and paste it in to whatever spreadsheet you create. (Members of my coaching program have access to the Restaurant Order Wizard.) Gather any store receipts, any vendor invoices that you can think of that has food product on it such as a run to Costco or Smart and Final. Maybe the produce vendor handwrites their invoices, so somebody has to get that data as well for the same date ranges.
2. Enter your data. Compile it, put it all together. For the large vendors, you can copy and paste the data. For the smaller vendors we literally have to type it in into the spreadsheet, and I'll show you what that looks like in a second.

The math behind accurate restaurant ordering

1. Usage ratio: you can either use purchases divided by actual category sales, meaning food purchases divided by gross food sales for that same time period. Better yet, if you're using food and beverage software, and you know what your use is, replace purchases with use. That gets even more accurate and more powerful for you, but I'm going under the assumption you don't have that software in place, and you don't have that data, so I’m going to use purchases. I'm going to tell you again, I can order from Phoenix more accurately than you can in your own restaurant if somebody will do an accurate count for me. I don't want to, just so we're clear!
2. Projected par levels: This is your usage ratio we just created times forecasted sales by category for a specific period.
3. Combine key products for total purchased: Assuming you have multiple products from different vendors that are the same product, combine that data to make sure you don't have usage or projected par levels for two different products when it's really the same. Combine that information, which is done automatically in my spreadsheet.

Watch the video above to get a visual walk-through of how to do these calculations.

With the right data and the three arithmetic equations, you can place an order without any kitchen experience, without any knowledge. The math will not lie. This is so true that if your recipe costing cards call for 6 ounces of French fries, but you've had Lurch on the line putting 8 ounces on every single plate, it's going to order enough food that you put 8 ounces on a plate. It's the way you execute your recipes, not what the ideal should be.

If you want to put yourself in a position where you don’t have to worry about losing a kitchen pro, where you want to take control of your budget and inventory, take control of ordering, give up ordering without giving up your checkbook, give up ordering without worrying about thousands of dollars of extra food sitting on the shelves, or worst case scenario, very little food on the shelves and you have to 86 items and lose opportunities, then you need to put this in place. It's going to take time, but I'm going to tell you that time is well spent.

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