How Can I Increase My Bottom Line Profits?
One of the keys to running a profitable restaurant is managing the controllable costs, such as food, labor and equipment. Of those, probably the most difficult cost to control is food.
To manage food costs effectively, an operator needs to simultaneously monitor portion sizes, prevent theft, watch waste and order efficiently.
An inventory software will help you identify exactly when your food costs are out of line. Using inventory control software will typically save you 1 to 2 percent of sales, and might save you much more. And it is savings that goes straight to your bottom line as profit.
Using a POS-based inventory control system, operators could easily spot and solve food cost problems obvious by just simply focusing on portion control. When your staff knows that the system is keeping track, it discourages both waste and theft.
When experiencing food cost problems, a restaurateur will mostly learn this lesson after a week of using inventory control software.
Inside his restaurant, he can be portion controlling, yield testing and making physical inventory, but it wasn’t until he uses an inventory software where he realizes his inventory was out by exactly 20 pounds of potatoes each week; coincidentally, it’s precisely the same weight as a box. Upon knowing, it was relatively that easy to determine where the problem originated: a prep cook was stashing a box of goodies every every Monday morning.
Your bottom line
In a typical restaurant point of sale inventory control program, the operator sets up the software by first entering their recipes and product costs. The system then can track ideal usage based on those recipes and the restaurant’s actual sales.
The inventory control software can aslo track product usage in situations where some orders is not in line with the standard recipe. The operator can then do a physical inventory and generate reports compare it with the calculated ideal usage to check their differences. The operator can even set the software to track any number of item he wants.
For most restaurants, their top 10 items 80 percent of their food cost problem. And you can schedule nightly counts of key items and weekly or even monthly counts of some other items.
Even an ounce of over-portioning 1 item per order can cause a restaurant hundreds of dollars. By eliminating over-portioning on 100 orders per day for 30 days on a .67 per pound of a single item, possibly will add up to more than 0.00 in savings or 00.00 in twelve months!
Better tracking and controls also can help an operator reduce the amount of stock they keep on hand, reducing waste and freeing up cash for other things. Losses due to carrying too much large quantities of inventory can add up to a loss of between 2 percent and 5 percent on an average operator’s profit-and-loss statement.
We’ve assisted a client before who’s menu is fairly extensive and had lots of work for setting up, but after helping them program their system properly, we were able to drop their food cost by 2 to 4 percent – it’s a big plus for their bottom line profits.
So if you have a restaurant POS system or are considering a purchase make sure you know how to and understand the additional profits that you can reap by learning and properly using the inventory module of the system.
The author of this article is the VP of Customer Relations at POS-Fof-Restaurants.com with over 20 years experience in restaurant point of sale (POS) helping restaurants nationwide increase their efficiency and bottom-line profits.
Visit POS-Fof-Restaurants.com for more information on how our national network of restaurant point of sale specialists can help your business achieve greater success in these difficult economic times.