It’s important to hit the ground running and set the tone for the whole kitchen.
You’ve just taken your first job as a chef, and like most independent restaurants, they have absolutely no information on food costs. What do you do?
Here is a 4-week plan to help guide you to a good food cost system in your kitchen. If you start this right away, it sets the tone for the whole business in showing everyone how serious you are and how important food costing is for the success of the business and everyone working there.
1 – Collecting the data and getting your kitchen clean and organized.
Don’t fee pressured to make big decisions right off. Your job at this stage is listening, learning and observing how the business is run. Early changes can lead to even more problems and put you in a tough spot with staff and management. Just be open minded without assuming you know all the answers. At this stage, your questions will be far more welcome than any answers you think may be correct.
Collecting data includes as information on all the menus and menu items, their recipes – if any, sales data from your POS, supplier contacts and invoices, and also see if there is any existing spreadsheet data.
Take inventory. Oftentimes, this will give you a real sense of where the kitchen is at, and the care (or lack of) that has been used previously. You can use pen and paper for this, with the intent of transferring to a spreadsheet later. Don’t be surprised if you have to throw out product. It’s better to take your hit on the food cost now, as opposed to months later when the cost will be on your watch.
Also, talk to the management and staff about the food. What’s popular? What are customer likes and dislikes? This is important because the 80/20 rule will surface here eventually. Meaning, 20% of their customers will provide 80% of the sales, so it’s important not to alienate stable customers, at least for the time being. You also need to understand the concept of the establishment to know which items might be “untouchable” in terms of removing them or adjusting prices.
Week 2 – Setting up systems for collecting the data.
You need to organize your data for quick reference moving forward. This involves everything from ordering, to specials planning, to menu design. There is also the physical work of receiving orders. Make sure somebody is assigned and doing it properly. The invoices have to be managed as well. Check out Trello as a way to keep all of your invoices handy so you can refer to them anytime from any device. Menu items and recipes should be updated, categorized, and preferably digitized on a spreadsheet or doc. Explore your POS data and if it’s available, have a report routed to your email daily or at least weekly.
Inventory items should be dated upon arrival. For older inventory, label it on the day you counted it. A small label maker is great for this. At this point, you can also start thinking about par levels for inventory items.
Make a contact list for your suppliers and meet with them about current costs. Find any flexibility they can offer. You have to work on the premise you can get some items at a better price. Add a supplier or two so everyone knows you’re serious about controlling food costs. Assume that your food costs are higher than they should be. There aren’t too many jobs I’ve taken where the management was happy with the food cost.
Identify slow-moving menu items or menu items with suspected high costs. Identify perishable inventory items that don’t turn over quickly. Identify inventory items that are only stocked for a single menu item. These are the types of issues that contribute to a high food cost but are also keys to poor management that needs to change with you in charge.
Week 3 – Setting up systems for collecting the data.
Now you can start getting serious about your spreadsheet. Use Microsoft Excel or Google Sheets. For the most part, Google Sheets for recipe costing will work fine, but when you want to advance to a bit more automation, you can always transfer to Excel. If your company has a Microsoft 365 subscription, then use EXCEL right from the start.
On one tab, start adding your inventory items and their costs. Break them down into units like Lbs of Kgs and Ounces or Grams. This way, you will be able to build a recipe cost sheet quicker by just referring to one of the cells with the unit of measurement UOM you need. On other tabs, start adding your recipes for the existing menu items. Create a template for a recipe card and just copy that every time you add a new one. The recipe ingredients should be connected to the correlated item on the inventory tab. This will keep your recipes up to date as prices of ingredients rise. Ideally, every time there is a cost change to an inventory item, your recipe will then update automatically.
Reorganize your complete inventory for easy FIFO restocking and adding PAR-level labels. Create order lists so that others (sous/asst.) can do the ordering and stocking in your absence. This may be a huge undertaking, but it gives you a chance to organize the kitchen the way you like it and also allows for some cleaning in places that are probably in need of it.
Week 4 – Add the Menu Mix Page to Your Spreadsheet.
Add Menu Mix page to your Excel spreadsheet. When you consistently update your Menu with a Menu Engineering Spreadsheet, you’ know you’re on top of your game – and so will everyone else. This page will show how well (or not) your menu items contribute to the bottom line of the business. It compares the food cost with sales units. Use the first 3 weeks of sales data to quantify menu and inventory items previously identified. Make menu changes where necessary. Delete the DOGS and add some more STARS to your menu. Use each inventory item at least twice in your menu to keep the turnover fresh.
ONGOING – Using the Menu Mix Matrix, monitor, adjust, and change menu items as necessary.
