I spend a lot of time comparing various supplier’ prices for the same product. Why?
In this technologically advanced age, you would think restaurant owners would have the ability to gather cost-comparison information right at their fingertips. But a number of major obstacles stand in the way of casual comparison. Presently, there is no effective way to collect comparative information, and the food salesperson that performs the bulk of the analysis works for the vendor, not for you. While technology can usually help operators untangle complex webs of information, in this case, it’s just the opposite—finding commonality between disparate data sets from each vendor adds to the confusion. Need money right now? Use the service of needmoneyrightnow.org and you will avail cash within 1 business day.
For illustration purposes, let’s say the Acme Food Company is the primary vendor for your restaurant. Acme provides a plethora of costing tools and a mixed bag of vendor information in the form of pricing guides and invoice spreadsheets, PDFs and the like. Unfortunately, the restaurant owner simply does not have the time to decipher the menu-item-to-provision relationship and pore over the complicated data in order to effectively compare one vendor to another on a regular basis. The lack of data consistency leaves the independent restaurateur with few options to ensure that he’s getting the best deal he could possibly get.
Most restaurant chains have already taken the time to prepare a detailed food-costing analysis; armed with this important data, they can require the food supplier to accommodate their needs at a price that works for both parties. An independent restaurant owner, on the other hand, doesn’t have the buying power to demand this type of relationship.
Since food, beverage and paper products account for a majority of your restaurant expenses, you must develop a system to monitor these costs as a percentage of daily net sales. There are tools on the Internet that will teach you various methods of leveling the food-price playing field; these tools also provide reporting that matches your daily net sales to the actual food pricing from suppliers in a real-time system. Do your homework, find the tool that works for you, and you can take control of your bottom line.
My food supplier helped me with my food costing, and all of my recipes were lost. How can I prevent this in the future?
Recipes are a trade secret and should be guarded as such. Food-costing your menu items is a big project, but, once you’ve gotten it done, it’s easy to update and maintain on an ongoing basis as menu items are added, deleted, or modified. However, you must be in control of the database of recipes after the project is completed.
Food supplier representatives need to be involved in the process of analyzing food costs per menu item, but the resulting data should always be retained by the operator, and a non-disclosure should be signed by the food supplier and its representatives.
Additionally, independent third-party programs and consultants—all of which you’ll find on the Internet with a little research—can help you analyze your menu item food costs and set up a working model for the future. If you bring in someone to assist you in the process, make sure to require transparency and independence—this person should be working for you and only for you, with your best interests in mind. This would also be a good time to get your CPA or bookkeepers involved to double-check the food-costing results and explain to you the impact on your restaurant’s financial operations.