Your 5.00 portion of soup probably costs no more than 1.00 for ingredients? So you have 80% margin on that dish. The same patron orders a 20.00 bottle of wine, please don’t tell me that has only cost you 4.00? Hopefully there is something more in the region of 8-10.00 for wine, which gives you a margin of 50-60%.
Doesn’t seem that bad until you see that close to 40% of your gross margin on that table came from the steak and wine alone. Then if you think you have taken 18 items out to table, the mains and the wine gave you 55% of your profit, the other 12 “high percentage” items contributed the remaining 45%.
Count all the waste
We have already talked about weight v dry weight and making sure you know what you are not getting on the table. This takes it a further step and may start to give you some ideas about economies. If you send out a fatty piece of lamb does it matter? You sell this to a customer and some comes back. This is now food waste but is also reputation waste. What you are trying to put on a plate is accurately costed, so this is one angle of waste. However, measuring your levels of waste tell you more than what comes back on a plate.
1 How careful is the prep?
If you have one chef prepping side veg and he generates more waste than another, then you need to ask why. Does the person have lower knife skills, are they lazy or cannot gauge the quantity they need. You can replace a lazy chef with a machine that can do a consistent job if the level of waste justifies it.
2 Have you defined waste?
Well have you? The answer is all about looking at the chain between storage and the bin. Nothing should go in the bin unless it cannot be reused or is unfit. In traditional kitchen they would employ a garde manger who’s sole purpose was to save as much waste leaving the kitchen. Meat and fat offcuts can be made into sausages, rillettes or pates. Veg scraps and herb stalks can be used in stocks, cheese in sauces etc.
3 Bin costs
When food hits the bins there are several numbers to work in. How much did the food cost, especially if this is produce which has gone out of date? How much does the bin cost to get lifted and replaced? How much time can you keep a bin on site before it becomes a nuisance? Can you recycle or compost your waste onsite?
As a rule, most of this cost cannot be traced to a menu item, but will affect the overall gross margin of the kitchen. General food waste is more insipid and can be big numbers if left uncontrolled.
Add on costs
Yes, more costs which get attached to your food bills. The obvious item is shipping and packaging. If you cannot get some ingredients locally, be expected to pay for someone to send that. This is a cost that needs to be included as part of your food costs as it focusing your attention on how much it really costs. True kitchen cost needs to reflect the overall cost of buying in the produce.
You may also need to be aware of hidden costs, just as your customers will look for those cover charges on your menu. Suppliers are often squeezed on their margins and will try and be resourceful in the ways they can maximise revenues. If you don’t ask the questions first, you could get stung with these surcharges, but often won’t notice till you get the first invoice. Here are a few examples:
Fuel charges
Environmental impact
Disposal of packaging
Filleting
Higher fees for items below package or case size
Congestion or toll fees
The list goes on, but these are all reasonably fair excuses to ask for credit notes or threaten to shop elsewhere. If a supplier is honest with you and the request is reasonable, then this is your call, maybe it’s just expensive to deliver in your area.
When is food cost not a food cost?
We have just added waste, shipping and few other costs onto your food bill, but it can work the other way round. Your business is food and people need to eat. Sometimes either or both of these events mean that the food is not being charged for. A key take home here is to work out where that cost needs to sit in your books and a way of getting it there.
Press night
You invite a few members of the press or some bloggers around for a private event to showcase your latest venue or menu. These people are not expected to pay but the food is still coming out of your pocket. You may put the cost of the food down as public relations or something similar on your expense statement.
Staff meals
This is a staff cost, to be more specific, this goes down somewhere near the bit in your books where you write the payroll costs. If you didn’t have staff, you would not have staff meals. It is certainly not just a cost that goes with the restaurant trade, any business can be paying for canteens or subsidised food.
Prizes
Offering a free meal for a local charity competition is a good thing to do. It is not a discount or even a free voucher, this is a charity expense, the other two are forms of cash.
Lab samples
At first you would think this is a kitchen expense and should maybe even go down as a food cost. Yes, it is a kitchen cost, but just like cleaning materials, this does not go down as food. If you take and hold samples for storage or direct lab testing, then these need writing off your stock and putting down as hygiene, compliance or lab costs.
With all of these you need to make sure you record what has gone out of stock, the cost of the food and where it is going in your accounts. This is going to be a bit harder with prizes, so you could just look at your target costs are on what the guests order and write that down.
Development
When a recipe is being designed there needs to be some practise