Friday, September 21, 2012

4Q Consulting, LLC | Restaurant Consulting NYC | Why a Weekly Food & Beverage Inventory is Crucial to your Small Business

Why a Weekly Food & Beverage Inventory is Crucial
to your Small Business 
Uncover 4 Drains on your Business!

Most independent restaurants calculate their food cost only once a month. Yet, virtually all the major chain restaurants calculate their food cost each week. According to industry averages, chain restaurants (before corporate expenses) are two to three times as profitable as independent restaurants.  While weekly food and beverage costing isn’t the entire reason, it’s a large part of it.

A weekly inventory is an important tool in controlling costs and cash flow. Here are four potential problems that could have a strong negative financial impact and that a weekly inventory can help you to uncover:

Waste -   It happens in every restaurant: A server accidentally spills a plate of food, or a kitchen worker burns several pieces of steak. No matter how it happens, all restaurant staff should get into the habit of recording all wasted items. Often the best defense against lost inventory is simply recording any raw product that is wasted and any complimentary items that are given away. If you don’t have a POS system that can handle this, an easy alternative is to handwrite the item, the amount wasted, and the reason it happened on a clipboard sheet. This way, all inventories is accounted for when analyzing usage.

Food Handling and Spoilage – Akin to waste, poor food handling that makes product unusable is one of the biggest contributors to depleted inventory. Commercial kitchen operators would do well to implement a mantra of "label, date, rotate and consolidate" with kitchen staff. When food is properly labeled and correctly dated, workers know what to use and when. Proper First-In, First-Out (FIFO) rotation is essential for reducing food spoilage, and proper consolidation from large, unwieldy containers to small, manageable ones will keep food fresher and more visible for use.

Theft - Employee theft is an unfortunate reality in many restaurants, and can be a reason for lost inventory. Theft involves anything from stealing full bottles of alcohol to eating restaurant food outside of employee meals. Keep an eye out for behavior that may point to restaurant employee theft and make sure you have the proper controls in place to prevent it.
Proper Product Ordering – Keeping excess inventory is expensive and proper product ordering, in frequency and amount, in accordance with your usage, is crucial to your success. This helps to prevent waste, promote proper handling and deter theft.  An excess of product might signal to employees that wasting food (as in making repeated mistakes) is acceptable, or that one bottle won’t be missed.  Invariably more food ends up burned, in the garbage or given away.  With less product to work with, food and beverages are handled more responsibly and less ends up wasted or stolen.

By taking a weekly inventory, you will have a full report on the current state of your business, and will be able to address issues before they become problems: Is food being wasted because employees are working irresponsibly, or the kitchen staff is not properly trained? Are managers ordering appropriately for the level of usage or is an over-order of staple items sitting unused? Are there proper procedures to account for the top-shelf liquor that seems to evaporate, and do you need to keep two cases of it on hand?

You will be able to foster a “culture of accountability” where managers and staff are held accountable for their work, producing a more effective workforce in your establishment.

Knowing your business in “real time” will allow you and your managers to be more nimble in responding to issues and better utilize your resources.

Let 4Q Consulting, LLC help you develop proper inventory and reporting procedures, to increase your efficiency and bottom line profits!

No comments:

Post a Comment