Top 10 Food Costing Tips

Getting your prices right is the most important aspect of catering, especially at this time of year! Follow our top 10 tips below to save your business money and add healthy profits to the bottom line.

1. STANDARDISE AND COST YOUR RECIPES
Every recipe for every menu item, both à la carte and catered, must be standardised and costed correctly. This basic discipline ensures consistency of product and ongoing profitability. While the initial set up requires some effort on the part of the chef or management team, it allows each item to be priced based upon its raw ingredient cost. Some ingredients will change price quickly, so its important to revisit recipe costing on a regular basis. Set up each recipe on a separate worksheet in Microsoft Excel. This way you can amend the ingredient prices and re-cost dishes quickly. Train someone else in your team to re-cost also, this will lighten the burden for you.

2. PRICING BASED ON KNOWN COST STRUCTURE
The standard method of pricing is to take the cost of each menu item and multiply it by an appropriate multiplier to cover the cost of labour, fixed and variable costs. For instance if you multiply the cost of the ingredients by 2.5, you will yield a 40% food cost, with a 60% profit; 3 times, will yield a 33% food cost and 66% profit. This simple formula is all well and good, but if your revenues are below projections and/or your payroll cost or overhead are higher than expected, you may still lose money. Given the interplay of revenues, pricing, volume of business, and cost structure, these numbers must be tracked closely and reviewed frequently.

3. PORTION CONTROL IS ESSENTIAL
Standardised recipes are costed based upon specific portion sizes. If untrained or poorly supervised employees routinely serve larger than costed portions, you can kiss your profitability goodbye. Costly meat and fish products should be weighed to ensure correct portion size. Ladles of specific sizes should be used to plate menu items. Pies, cakes, and other baked desserts should be cut and served using templates to ensure the correct number of portions are realised from a multi-portion. All kitchen staff must be trained to serve the portion size that has been costed.

4. LABOUR CONTROL
Labour, both front-of-house and in the kitchen, is the single largest expense in a food service operation; it is also a continuing challenge to control. Electronic timekeeping systems make it easier for supervisors to verify employee hours, but regardless of system used, supervisors must monitor payroll hours daily. In my experience a ceiling of 20% of VAT exclusive income should be adhered to, to ensure profitability if a 66% profit is achieved.

5. BENCHMARKING REVENUES AND EXPENSES
Benchmarking is the act of measuring and analysing operating performance. In a food service operation there are many things to benchmark, such as meals served and average spend per meal period by day of week; payroll hours by position by meal period or day; and beer, wine, liquor sold per meal period and day of week. When tracked over time, these statistics become the baseline to project and monitor future performance. Benchmarks also allow measurement of customer reaction to foodservice initiatives such as new menus or pricing. Most importantly, benchmarking makes supervisors more knowledgeable about their operations. Such knowledge translates to improved operations and bottom lines.

6. ROUTINE AND CONSISTENT INVENTORIES
Inventories are critical to monitor stock levels, avoid shortages, control pilferage, and determine cost of goods sold. Inventories can also be time consuming and inconvenient for hard working chefs. Inventories sometimes get delegated to poorly trained subordinates who miss or miscount key items. Sloppy inventories contribute to erratic cost of goods sold. Poorly organised storerooms contribute to sloppy inventories. Keys to accurate inventories include well-organized storage areas, knowledgeable individuals conducting inventories, routine and timely inventories, and organised receiving documents, invoices, and credits slips. Delegating counts is acceptable if employees are trained. However, having the same employee conduct all inventories without spot-checking and oversight will invite problems.

7. SUGGESTIVE SELLING TRAINING FOR EMPLOYEES
Service employees who are trained in the techniques of suggestive selling can improve your average sale value and bottom line. Whenever a new menu is put in place, all servers should be provided a “selling sheet” that gives key information about each entree. Such information should include cooking method, ingredients, time of preparation, and enticing descriptors to help sell each item. Just as standardised recipes are important in the kitchen for consistency of product, selling sheets provide the service staff with the knowledge and information they need to sell the product. In addition to entrees, special training should be given for the suggestive selling of appetisers, desserts, wines, and speciality alcoholic beverages. The time spent providing servers with the information and confidence to sell your food and beverages will yield consistently higher average sales values.

8. CONTINUAL FEEDBACK TO EMPLOYEES
Every month’s budgeted food sales is made up of how many meals are sold and how much each guest spends on average for a meal. By breaking your projections down into meals and average spend per head and posting your daily targets prominently in the kitchen, you provide your servers with goals that connect their daily efforts to your profitability. By comparing month-to-date actual meal counts and average spend per head to projected, you give your employees a day by day record of their progress. Most people are competitive by nature and this simple technique will become a powerful incentive to servers. The same technique can be applied to appetisers, desserts, and bottles of wine sold.

9. FORECASTING AND SCHEDULING
By tracking key benchmark statistics and keeping a daily log of business levels and staffing, foodservice supervisors can develop a routine system of forecasting business levels. While some level of volatility can always be expected in guest patronage, the act of forecasting, when formally done and evaluated after the fact, will assist in maintaining service levels while controlling labour cost.

10. GUEST FEEDBACK
While some guests are vocal with their opinions, many are not. Food service supervisors should make it easy for guests to provide feedback. Comment cards must be readily available, periodic surveys should be conducted, revenue benchmarks should be analysed to measure guest responses to offerings and initiatives, and employees should be trained to routinely report comments made or overheard to supervisors.

Every professional food and beverage manager is aware of these necessary elements to success. Unfortunately, in the ongoing rush of business they are often overlooked. At its root the problem is one of organisation. By taking the time to establish systems to address each guideline, by training and delegating tasks, by making each guideline part of the daily routine, each of these steps can be easily integrated into your operation. While the initial exertion may be great, so also is the ongoing payback.

Useful formula – To determine profit percentage = Gross Profit cash multiply by 100, and then divide by VAT exclusive sales price.To achieve a particular profit percentage = Take your desired % figure from 100. Then take the cost price of your portion/product and divide it by the number you have left. Then multiply that by 100.

How big should the lettering on my sign be?

This is a common question and there are essentially a number of answers, in order to work out which answer is correct for your situation we need to consider various factors such as…

Fire Assembly Point Signage

What type of sign is it?

The type of sign will determine if there are any specific requirements you will need to follow in the design/creation of the sign. If the sign is a Health & Safety sign then there are guidelines you should follow with regards to the text size, font colour combination and even the position of the sign. For an in-depth look at Health & Safety Signage please read this article, Health & Safety Signage. If the sign is for a business, such as a sign above a shop window or on the outside of an office block you are probably not restricted in terms of font or colours. However, you may be limited by local planning laws, the local council or even your landlord if your premises are rented, be sure to check before you spend hard earned money on a sign that you are ultimately not able to erect.

How far away will people be when they see the sign?

This is probably the reason you are reading this article as this will ultimately determine the lettering size. We need to assume that we are talking about a person with 20:20 vision (or they are wearing glass/contacts to achieve 20:20 vision), we can then use the table below to work out the optimum lettering size based on the distance from the sign that we expect people to read it. Let’s take a sign that we want people be able to easily read from a distance of 25m, this could be a sign on building in an industrial estate and we want it readable as they come through the gate. You would need to make the letters 8” or 203mm tall for this to be easily read at the gate (25m away), however the sign would still be visible and potentially readable up to 106m away, ensuring that your business is also visible to passing traffic on the main road. If the sign is for a shop on the high street you may be looking at distances slightly less, maybe around 20m so you would look at a letter height of 6” or 150mm.

Table of reading distances

How big is the area available for the sign?

Another consideration factor is the area you have to mount the sign and what content you need to add to it. You now need to take into account the distance from which the sign will be read, what the important content is and ensure you do not make the sign bigger than the area you have. This can sometimes cause a trade off between the company name and the strap line, it is recommended that you ensure the company name is easily readable at the distance you need, this will bring the customers to your door, as they get closer they will be able to read the strap line.

Will it be illuminated or reflective?

Halo Illuminated Sign

Think about illumination of your sign, will you need it illuminated, probably in the winter months, but not so much in the summer. Think about how your sign could be viewed by the passing business, if it was illuminated would that turn peoples heads more than an unlit sign? If you have traffic that comes down the road towards you and their headlights shine towards your sign, you could be clever and add some reflective vinyl to your letters causing them to reflect back towards the traffic effectively popping off the front of the building and grabbing potential customers attention.

Health & Safety Signage

As you read this take a look around your environment, if you are in a commercial or industrial environment you will probably see health & safety signs that are there to direct you in the event of a fire, stop you from hurting yourself on some machinery or even indicating what vehicles and the speed they should be traveling at as they pass by your window. When it comes to health & safety signage there are some guidelines that need to be followed, these cover the colours, the text size, the font and in some cases the symbols that are used.

Health & Safety signage falls into a few categories, each has a specific colour.

Blue signs are an order. Red signs are a prohibition. Yellow signs are a warning. Green signs are a safe condition.

Blue signs are an order. Red signs are a prohibition. Yellow signs are a warning. Green signs are a safe condition.

The font used on the signs is important as it must be clearly legible from a distance, Arial is usually used as this is a clear text when used in both upper and lower case. The colour of the font is usually white or black depending on the sign colour, ensuring the greatest contrast and legibility. Blue, red and green signs will have white text yellow will have black, white on yellow is pretty difficult to read.

Next is the size of the text, this is dependant on how far away the sign must be easily read. Think of a fire exit sign, these need to be large enough to be readable from the other end of the corridor that they are in to ensure that everyone can see them. To this end there are also guidelines to follow, the table below gives you the letter height based on the distance the sign needs to be legible from.

Recommended letter size based on viewing distances

When you are talking about health & safety signs you need to ensure they have a symbol as well as the text, this ensures that people who can not read English still have the opportunity to understand the sign through the symbol. There are a number of standards out there for symbols and these are constantly being updated, so ensure you are keeping up to date with the current recommended symbology.

For a full range of Health & Safety signage please visit our website, if you need a sign that is not listed we can always design and produce it for you.

Where Can I Get ZIG Posterman, Illumigraph, Woodcraft, Acrylista and Posca Pens from now?

The manufacturer of the ZIG brands of pens for blackboards chalkboards and crafts is no longer in the UK, but; BHMA Limited are!  We are now the importer for these pens.  What’s more, we have a huge range of colours and pack sizes to offer too.

What are all the Brand Names and why?

Initially; BHMA limited brought Posterman and Illumigraph into the UK for use on blackboards in pubs, clubs and restaurants.  The reason for the two was that Posterman pens were waterproof for outside use and Illumigraph were wet-wipe, easy to change for inside use.  Sales of these pens rocketed, as they replaced chalk, which washed off outside unless you coated it with hairspray to fix the chalk to the board.  Also; another consideration was able to be made by Environmental Health Officers in food areas, as chalk dust could be a physical contaminant of food, which would breach the Food Act 1984 and the subsequent revisions of the regulations within it.

Posterman Waterproof Pens

To Summarise to this point

Posterman are Waterproof and Opaque Colours

Illumigraph and Wet-Wipe and Luminous under Ultra-violet light

The next stage was that the manufacturer saw an advantage of developing a range of Posterman pens in wet-wipe.  Here is where the confusion started.  However; the colour range of the Posterman Wet-Wipe are opaquer than the Illumigraph, so it did make sense, if you had the time to work it out.

Illumigraph Wet Wipe Pens

To Summarise to this point

Posterman are available in either Waterproof or Wet-Wipe and both Opaque Colours

Illumigraph and Wet-Wipe and Luminous under Ultra-violet light

Colour range was then thought to be holding back the waterproof pen sales, so; the manufacturer then introduced a new range of lovely colours.  Unfortunately, they didn’t call them Posterman, which would have made sense as they were waterproof opaque inks.  Instead, they called them Woodcraft to try to capture the crafts market.  However; these pens are amazingly good on blackboards.  Adding to the colour range.

To Summarise to this point

Posterman are available in either Waterproof or Wet-Wipe and both Opaque Colours

Illumigraph and Wet-Wipe and Luminous under Ultra-violet light

Woodcraft are Waterproof and Opaque Colours

Next came the rebrand of the Woodcraft pens, a crazy move once more. The new name for the Woodcraft range of pens is Acrylista, still a fabulous colour range and good quality pens.  It just added more confusion to the ranges.  In my opinion the Woodcraft should have been rebranded Posterman.

Acrylista Waterproof Pens

To Summarise to this point

Illumigraph and Wet-Wipe and Luminous under Ultra-violet light

 Posterman are available in either Waterproof or Wet-Wipe and both Opaque Colours

Woodcraft are Waterproof and Opaque Colours – Discontinued

Acrylista are Waterproof and Opaque Colours, replacing Woodcraft.

Posca Waterproof Pens

So; that leaves Posca. Posca pens are very good pens but their colours are different to Posterman.  However; the white is probably the best white available.  Posca are also made by a different manufacturer.

At BHMA Limited, we stock them all to allow you to choose exactly what you would like.  Single Pens, Wallets of 5, Wallets of 8 and multiples of course.  Please refer to the website for the varying nib sizes and costs.  You will also see videos showing you how to use the pens to promote sales and to affect quality notices.  If you need more help just ask our team on the live chat, or on the phone on 01353 665141.

How to make money from displays and table advertising.

Making money in a public house is about knowledge!

This blog will certainly help you.  Read it, digest it, action it, reap the rewards.

69% of customers go to the bar BUT, 31% don’t.  This means that bar merchandising is a big influence on 69% of your customer base approaching your bar.  However; lets look at the 31% first.

31% of your customers don’t go to the bar, probably because someone else is asking them what they would like to drink.  In this situation they will know nothing about your product range.  So; the important thing here is; the information presented to them at the table to, and the walls en-route to the table.  Without information presented to them they will ask for their own ‘familiar’ products. Products like Orange Juice, Gin & Tonic, Pint of Bitter etc.  The big question here is, ‘are these your best cash profit earning products?’  Not best percentage products, but the best cash earning products.  To explain that;  80% of £1 is 80p 50% of £2 is £1, earning 20p more!  If you had sold, the high percentage earning product to your customer, you would have 20p less in your bank account on just one transaction.  I hope you see where this is going.  So; what if your table advertised say St Clements (orange juice mixed with bitter lemon, ice and a slice), instead of orange juice.  Rhubarb Gin with American and a dash of lime instead of the Gin & Tonic, or the premium Bitter rather than the standard Bitter?  You would make additional profit EVERY time one of your ‘table advertised products’ was purchased.

Display Blocks
Part Populated Display

Back to Bar merchandising.  Abundance is Authority.  This means displaying lots of the same product you are showing confidence in it, it looks popular too.  So; customers are visually drawn to it, making a sale much easier.  Simplicity Clarity Relevance.  Three key words in making money through merchandising.  The opposite of this is Complexity, Confusion, Ambiguity, exactly what you don’t want.  So; the way forward is simple:  Choose a product to display in abundance, this display will be simple and not complex.  Don’t add other products too near to your display, as this will cause confusion.  Keep the display relevant too.  If you are showing something on the TV?  Show products that are relevant to that target customer, and change it often.  This creates a little work, but the rewards are great.

An aid to all of the above, are our Display Blocks (code DB1) https://www.bhma.co.uk/wooden-display-blocks  you can create a simple stunning display for almost any product.  Take a moment to look, they last years and WILL make you money.

Is the perception of your marketing reality?

The Marketing Truth You Cannot Ignore – Perception is Reality! 

This simple statement can enhance or destroy your business!

So; Just what is perception? Perception is defined as the process by which individuals select, organise and interpret stimulation of their senses (sight, smell, touch, hearing or taste) into a meaningful and coherent picture of your business.  The picture painted by the customers senses should be Reality.  Reality can of course exceed expectation.

Much of the disciplines of marketing communications focuses on creating stimuli that positively influence consumer perceptions.  Does your marketing do this?

What is the product you are selling?  It’s important to define.  It’s not just a consumable product, or service that you sell.  It’s the whole business.  The way it looks outside and online.  The quality of the toilets.  The look of the signage.  The quality of the menu, or a price list, whether its stained and dog eared, or whether is clean and new.  All of these messages create a perception for the customer.

I once took a holiday in the Isle of White at a hotel on the seafront.  When I arrived the first letter of the hotel name was missing.  I immediately thought, this could be ‘Faulty Towers’ experience, and it was!  The availability of poached eggs was confined to certain days.  The lift doors didn’t stop if they touched you (I literally had to wrench my shoulder from the doors), and to top it all, unsympathetic staff.  There were many more incidents too.  The message I want to share with you here is my perception was disappointingly – a reality.  Some hotels will unfortunately, have the same negative messages on the outside, customers viewing these messages may well assume that the standards are poor because of those external message and pass to stay at another hotel instead.  This is lost business for that hotelier and they wouldn’t have noticed, because the customer wouldn’t have told them.  The messages outside your business are crucially important, and; will make a difference to your income, either positively of negatively.

My advice:  Take a regular look at your business with the Customers Eyes.  Identify what you perceive, and then strive to communicate with the customer with all of their senses making sure that its positive and matches what you intend them to perceive.

Do you perceive these vegetables to be abundant and fresh?

 

 

 

 

 

 

 

 

 

 

 

 

 

What about this shop?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Perception is ‘nothing fresh and nothing to make your meal with’.  You would probably go to a different supermarket.  The big question is ‘Would you go back to the original supermarket?’  Have they now lost your business?

In consumer behavioural terms, perception is the result of two inputs that interact to form the personal evaluations that ultimately drive purchase:

  • Physical stimuli from the outside environment
  • People’s expectations and motives based on past experiences

While it’s difficult to impact the expectations and motives formed on past experiences, here’s how you, as a marketer, can impact the physical stimuli consumers perceive in your business.

Much of the discipline of marketing communications focuses on creating stimuli that positively influence consumer perceptions. Best practices in doing so include:

  • Identifying your product’s value proposition: In order to influence perceptions, you need to define and document your product’s value proposition, don’t forget your product is not just the consumable product or a service, it’s the whole business. Your value proposition is your big picture promise, the benefit your product or service uniquely provides. Defining your value proposition requires you to understand your target customers’ unmet needs and how your products, as well as that of your competitors, will fulfil those needs. Identifying gaps where your customers face unmet needs that are not fulfilled by competitors can help you to identify your product’s value proposition.

The Basics of Marketing

  • Find out what the customer wants
  • Design the product, service and facility to match
  • Tell the customer you have it.
  • Telling the customer you have it, includes using all of the customers senses.

We have many display products to help entice your customers and improve your marketing, please browse our site for more information.

Patrick Huggins

Director for BHMA Limited.

Employee of the Month: Hitesh Patel

EMPLOYEE OF THE MONTH.

January’s employee of the month is our I.T. Manager, Hitesh. He has been nominated for the following reasons:

  • Dedicated & hard working.
  • Problem solver.
  • Being our I.T. Guru.

 

Tell us about yourself.
My name is Hitesh, I am 24 years old and I graduated from Staffordshire University in 2015 where I studied Multimedia Computing. I chose this subject because I was interested in a range of computer-related subjects, but definitely enjoyed the website development side of it the most. After graduating I went onto developing a few websites for myself to enhance my skills further.  I secured my first job with Ideal Shopping Direct where I worked for 2 years before starting here at BHMA.

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Overview of 2018 at BHMA

It always seems a little crazy that in the middle of all of the hustle and bustle of the holiday season, we somehow choose this time of year to try to set some new goals for ourselves for the coming year! With 2018 coming to a close and 2019 just a matter of a few weeks away, we have decided to do a brief overview to highlight our year.

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Out with The Old & In with The New

For many pubs, bars & restaurants New Year’s Eve is one of the busiest & most profitable days of the year, with customers in and out all day long, New Year’s Eve parties are a brilliant way to encourage families and their friends into your business to celebrate the big night with you and see in the new year.

However, there is nothing worse than putting all of your efforts into creating a great party for no one to turn up. Let’s not let this happen to you this year, we have some great products that will help you with your advertising efforts for New Year’s Eve but can also be re-used throughout the year.

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