Managing Your Food Cost Percentage Like a Pro

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Photo credit: Jeffrey Wisdom

By Deagon B. Williams

Ever wonder how a food cost percentage actually works in the real world of a busy business owner? Yep me too. Food cost percentage management comes down to planning and execution.  A well-executed, astutely designed plan will never fail.

Food cost percentage planning often uses the tool of forecasting, but what really matters is what happened. True food cost is measured in the past, but can only be controlled in the present. Okay, okay, okay, so what does all of that mean?

3 key and effective ways to control your food cost:

  1. Check the invoices as food arrives. Be sure that there isn’t an unnoticed significant increase in the price. This is especially true of the higher priced items like fish and meat.
  2. Check the refrigerator every day. Rotate the food. Change the container.
  3. Keep an eye on the garbage can. Notice what’s in the can. Cut waste.

3 Key and effective ways to predict food cost:

  1. Write a menu that comes in 3-4 percentage points lower than your desired food cost percentage. This accounts for a ‘front load’ cost and yields.
  2. Insure that your menu has an overall menu mix that averages to your desired food cost percentage. This means that some items will be cash cows and others will be lost leaders. It’s the overall menu mix that matters.
  3. Inventory at regular intervals in the same way, every time.

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