Food Cost Control Simplified

One of the most problematic areas in a restaurant operation is operations are labor and material-intensive. Add to that the external factors that affect a restaurant's finan controlling costs. Restaurantcial status a lot like inflation rates, trade, supply of materials and others.

Cost control is a vital point of concern. In fact, in bigger establishments, there is a whole department or at least an employee allocated to cost control. Here are the reasons why it is important:

• Cost control is the backbone of menu pricing
• Cost control defines a restaurant's ability to compete and to pay suppliers

How do you control costs specially in a business where the risk of spoilage and breakage is always there?
1. Always look for the best suppliers
Don't rely on suppliers you find in the grocery. Even better, look for the suppliers who supply for grocery stores. These would be direct distributors for consumer and food items like Unilever Bestfoods or Nestle or Sysu. They can offer you concessions and credit arrangements. They also deliver to your place if the quantity is good. Since you would usually consume ingredients in large quantities, you would most probably be given good prices.

2. Determine your par stock, lead time for orders and shelf life of food items.
If you can project your consumption and lead time on certain items, you can order just enough and just in time. This avoids over stocking on items and hurting your credit or cashflow. This will also help you budget your expense allocation for cost of goods or food costs. Most importantly, this will minimize spoilage greatly.

3. Recipe test then cost.
Some restaurateurs take the lazy way to menu pricing by making estimates. Not a good idea at all! If there is one sure way to control your costs is to document your recipes, test them and document the testing. Pur each recipe in a file or an index card with separate columns for ingredients, quantity of ingredients needed and cost. Add the costs up to know the at-cost rate of this particular food item.

4. Review your costs regularly.
Recipe costing does not happen only when a restaurant is just about to operate. Costs should be reviewed at least twice a year or when there is a substantial increase in prices. It is also important to review costs and prices when competition dictates so. There is a tendency to be enthusiastic only at the beginnning and when things are doing well.

5. Support your cost control with control points.
Control points like different persons for purchasing and receiving, different persons for audit and stock disbursement. It is also good to conduct surprise inventory, although, a monthly inventory is most advisable. Use forms to define flow of stocks.

6. Make sure that all food items consumed are accounted for.
There is a possibility of pilferage, breakage and spoilage all the time. Make sure that you have a system to trace ingredients released to the kitchen to how much it was paid for by costumers. There are now softwares and inventory systems that can do just that with less difficulty. Spoilages should be reported and items duly released by person in authority. Same should be done with breakages.

7. Have a buffer.
Allow a 10-20% mark up on your selling price for any unfavorable eventualities. So that you have an allowance if competition pushes you to reduce prices. However, if this is not possible, especially in price-sensitive food categories, it would be best to make sure that costs are spent where they should be.

8. Be mindful of other costs.
Remember that there are other costs entailed in ruuning a restaurant. Among them restaurant supplies like napkin, condiments, toothpick, fuel, manpower, electricity, water, rent, repairs and equipment.

Cost control could be made easier by putting in systems and procedures. Aside from this, it is also a must that all the people involved in your business understand what cost control means for them and for the business. Point out clearly the things they could do that will be detrimental for the business and what they must do to help. In this way, it will be easier to impart procedures to them.