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 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.

How to increase your coffee sales?

coffee merchandising

This really is a no-brainer! We all know how much it costs to make a cup of coffee and how much we pay to drink one in a bar, café or restaurant. You really are missing a trick if you are not promoting your coffees, this has a high profit margin and Europeans are now the worlds biggest coffee drinkers!

The easiest way to increase sales is to market your product well, by well I mean provide clear communication. There are a number of ways this can be achieved but the easiest (and most economic) is to use what you already have!

Most establishments will have coffee beans, chalkboards, maybe even a grinder, all you need to add for the perfect result is a little time and inclination!

Have a look at our examples above, the first has been created with and old fashioned grinder, a bottle of Jamesons, coffee beans, and a fake Irish coffee (created with instant coffee and white flour), all that is needed to make this display complete is a chalkboard with a simple promotional message to tantalise the taste buds.

The centre photo shows a coffee menu displayed on a chalkboard that can be hung on the walls as a piece of art, gently persuading your customers to enjoy their favourite cuppa.

The third is simply coffee beans, chopping boards, a couple of mugs, a little bit of artistic talent and a lot of patience!

As you can see the opportunities are endless to create a simple display with little or no outlay simply using what you have. Remember to change your designs, promotions and offers, if your customers sees the same thing month in month out it will become part of the furniture and stop working, you need to jazz it up a little and come up with new ideas. How about offering a Baileys Latte at Christmas, an Espresso Martini in the summer and a Calypso Coffee for Bonfire night! (All recipes below). coffees1

Baileys Latte – This really isn’t just for Christmas and it’s so easy! Pour steaming milk into a coffee glass, add a shot of espresso and pour in the Baileys, finish with a sprinkling of crumbled chocolate or cocoa powder.

  • 50ml Baileys with a hint of Coffee Flavour
  • 20ml or one shot of espresso
  • Milk, enough to fill your coffee glass
  • Crumbled chocolate or cocoa powder (for decoration)

Espresso Martini – Ok, you’ll need an espresso machine and a shaker for this one. It sounds complicated but it’s just a matter of mixing booze with coffee. Shake the Kahlúa, Absolut Vodka and espresso together with plenty of ice. Strain into a cocktail glass to get rid of all the small ice chips.

  • 1 Part Kahlúa
  • 2 parts Absolut Vodka
  • 1 part Espresso

Optional: Add simple syrup to taste

Calypso Coffee – This one’s easy simply pour the rum and liqueur into a mug and top with hot coffee. Simples!

  • 30ml Rum
  • 30ml Creme de Cacao liqueur
  • 225ml hot filter coffee

As you can see all the above is achievable with a little thought, time and dedication, want to improve your sales? What are you waiting for? And if you have any photos or recipes please send them my way, I’m always tempted with a cheeky chai!