FSR December 2022

YourTake

"As inventory cycles through your restaurant, it generates a lot of accounting data. Themore you review your costs of goods sold, the faster you can spot trends in your food spend."

TONY SMITH

ADOBE STOCK / RESTAURANT365

ers record sources of waste at the time it happens for analysis later. Consider creating a form that cap tures the important facts of food waste, noting who, what, how, and why. e log can be a simple spreadsheet hanging on a kitchen clipboard, or it can be a digital document staff access on a mobile phone. While food waste is inevitable in a res taurant, tracking it in the moment helps spot recurring sources of waste. You and your managers can then develop a strat egy to address the root causes. No one truly knows what the future holds. As analysts and economists work to provide their best data-driven predic tions of what might come, restaurant owners and operators must be ready for anything. Whether the possibility of a recession becomes reality is less impor tant than the steps leaders take in the coming days, weeks, and months to strengthen their business from top-to bottom. Tony Smith is the cofounder and CEO of Restaurant365, a cloud-based, all inclusive back-office solution that com bines key restaurant modules with inte grated accounting. From the beginning at Restaurant365 he spent the major ity of his time designing and creating an innovative product that would move the restaurant industry forward. Prior to starting his own company, Smith was director of services at software consul tancy Dynamic Methods.

4. Double down on inventory Don’t wait for an emergency. Start train ing your entire team on regular inven tory cadence and processes, set expecta tions, and communicate the importance of inventory to the big picture. e more you count inventory, the better your data for ordering and making other food related decisions. Consistent, manual counts on the same day of the week at the same time can generate helpful, comparable num bers. If you’re looking to get more gran ular data, consider a regular “micro inventory” of the top 20 products you use. Again, for most restaurants, 80 per cent of their food cost is tied up in their top 20 ingredients; knowing their shift ing prices can go a long way in helping you reduce cost of goods sold and boost your margins. 5. Track costs across the board Your theoretical food cost is what your food expenses should be given the price of ingredients and assuming perfect usage. Your actual food cost is howmuch you spent for the same period, account ing for issues like food waste, improper portioning, and invoice mistakes. Comparing these two food costs reveals where you may have unneces sary food waste. Start by examining the items with the widest variance between actual and theoretical cost to find the root issue. From there, set variance goals

for your entire restaurant business or by individual inventory items or categories. As inventory cycles through your res taurant, it generates a lot of accounting data. e more you review your costs of goods sold, the faster you can spot trends in your food spend. Whether tracking how cost spikes at various parts of the week or what to purchase for your next order, up-to-date informa tion can influence almost every decision you make about your food spend. 6. Negotiate now Whether or not more challenging eco nomic times lie ahead, you should con stantly negotiate and renegotiate prices with your suppliers. For example, when chicken costs surged earlier this year, operators with locked-in pricing were able to avoid the spike and continue pro viding their popular dishes without hav ing to pass these costs onto their guests. Accomplishing this now could prove particularly useful in smoothing out any long-term price fluctuations that could arise due to recent regional droughts and fires. With the possibility of rising costs for beef, corn, tomatoes, and more, now is the time to negotiate your pricing. 7. Record waste live Given how busy restaurant kitchens can be, managers may not notice what’s con tributing to food waste. Using a tool like a food waste log can help your manag

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FSRMAGAZINE .COM

DECEMBER 2022