For most restaurant owners, being the proprietor of a food establishment is the culmination of years of hard work and dedication in the food industry. Although very rewarding, the restaurant business is a game of inches. Profit margins can be minimal depending on the overhead cost of the restaurant. Saving money whenever possible can help ensure the restaurant thrives and remains a source of positive income.
The cost of wasted food by American restaurants is staggering. Recent reports have shown nearly 2 billion dollars in losses every year on wasted food.
Restaurant owners can avoid this costly setback by crunching numbers and making use of the data. By keeping track of sales and profits on each shift, owners can pinpoint precisely where the money is being lost. An accurate inventory should be maintained at all times on all food and alcohol products in-stock. By cross-referencing sales to the stock based on shifts, it becomes easier to pinpoint exactly where the highest losses are.
Employees in the back of the house must be properly trained in portion control and waste management. Average restaurant profit margins are between 2 and 6 percent. When factoring in this statistic, it’s clear why employees must be trained to maintain a strict portion control regimen.
Portions for the menu should be kept uniform by all shifts. If amounts fluctuate based on shift workers, keeping track of inventory and waste can become difficult.
Go over the importance of efficiency with food preppers and cooks. When prepping and cooking, be sure to double checklists and orders to keep waste and recooks to a minimum. Convey the importance of proper communication between servers and cooks.
One of the most important factors when it comes to restaurant profit is your menu pricing. Calculate what you want your profit percentages to be and base your menu prices on this factor. Take your time and pinpoint all your food costs before deciding on final menu prices.
Menu pricing should never be rushed. This one factor can sometimes make or break a restaurant. If the prices are too high, you’re going to turn customers away. If the prices are too low, you’re not going to turn a high enough profit to stay in business.
Using an efficient method for your menu pricing will maximize profits. Keep your entrees at a competitive price. Paying customers give the most attention to the price of entrees and their main course. Raise the price of your add-on items and anything a la carte. After drafting your menu, be sure to revise and optimize for higher profit margins on every item and section you can. Little changes can make big differences in the profit section at the end of the day.
What Else Can Help?
Software for restaurant management is readily available, and there is no shortage of options. Besides profit tracking software, there is also a restaurant inventory management software. It’s essential to keep the most updated programs available in your system.
A restaurant’s inventory management software can make a huge difference. Having up-to-date and efficient inventory tracking software can automate the process and ensure a higher level of accuracy.
Owning a restaurant can be very rewarding but can also be very demanding. Using precise inventory tracking methods and proper employee training, you can maintain a profitable restaurant model and continue to grow your business.