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Blue Point
How Can I Increase My Bottom Line Profits?
A good way to make more profits and run your restaurant to success is by managing the controllable costs, such as food, labor and supplies. Of those, plausibly the harder cost to control is food.
To manage food costs effectively, an operator needs to simultaneously monitor portion sizes, prevent theft, watch waste and order efficiently.
Inventory software will be able to aid you identify specifically where your food costs are out of line. With an inventory software, typically you'll save 1 to 2 percent of sales, and can save even more. And it is savings that adds directly to your bottom line as profit.
A POS-based inventory control system operators can spot and solve food cost difficulties that might not become noticeable by simply focusing on portion control. When your staff knows that the system is keeping track, it discourages both waste and theft.
When experiencing food cost problems, a restaurant owner will mostly learn this lesson after a week of using inventory control software.
Inside his restaurant, he can be portion controlling, yield testing and doing a physical inventory, but it wasn’t until he uses an inventory software where he realized his inventory was out by exactly 20 pounds of pork every week; coincidentally, a box weights exactly the same! Upon knowing, it was relatively that easy to pinpoint where the problem originated: a prep cook who was helping himself to a box of shrimp every Monday morning.
Boosting the bottom line
An inventory control program, in a typical restaurant point of sale (POS), the operator simply starts by entering their recipes and product costs to the system. The system then can track ideal usage based on those recipes and the restaurant’s actual sales.
This software is also able to track product usage in situations where some orders is not in line with the standard recipe. The operator can then do a physical inventory and generate reports in order to compare it with the calculated ideal usage to be able to spot their differences. The software can also be set up to track as many items as the operator wishes.
Mostly in restaurants, their top 10 items 80% of their food cost problem. Key items are also scheduled in nightly, weekly or even monthly counts of some other items.
On a single item, over-portioning by 1 ounce per order may cost a restaurant hundreds of dollars a month. Eliminating over-portioning on 100 orders per day for 30 days on a $1.67 per pound of an item, possibly will add up to more than $300.00 in savings or $3600.00 in one year!
Keeping a better track and control also helps an operator reduce the amount of stock they keep on hand, reducing waste and freeing up cash for other things. If the operator carries too much inventory can cause a loss of between 2 percent and 5 percent on an average operator’s profit-and-loss statement.
According to one of our clients it was a lot of work to set up because they have a fairly extensive menu, but after helping them with proper programming, we were able to drop their food cost by 2 to 4 percent – a reasonable addition to their bottom line profits.
So if you're using a restaurant POS system or are thinking of a purchase make sure you understand the additional profits that you can acquire and the "how to's" by learning and using the inventory module of the system accurately.
The author of this article is the VP of Customer Relations at POS-Fof-Restaurants.com with over 20 years experience in restaurant point of sale (POS) helping restaurants nationwide increase their efficiency and bottom-line profits.
Visit POS-Fof-Restaurants.com for more information on how our national network of restaurant point of sale professionals can help your business achieve greater success in these difficult economic times.
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