Tips for Managing Your Restaurant Inventory
Dealing with the inventory of your restaurant may be the last thing you want to do – but whether you like it or not, it’s crucial for controlling the costs of your restaurant and ensuring that everything is going just the way you want.
Depending on how well they are done, performing regular inventories may increase your profits by 20% every year. How so, you may ask? Because when you are doing the inventory, you will know for certain how many products are usually sold – and this way, you don't over-order.
The inventory for a restaurant, for example, can go all the way from analyzing the food menu to how many guests usually enter your establishment. Keeping track of all these factors will help you learn more about your restaurant and how to manage it better for profit.
The Importance of Keeping Track of Inventory
There are several reasons why you may want to keep a closer look at your restaurant’s inventory – and all of these reasons can be broken down into categories. Here are some instances where an inventory “episode” may be able to save you some money.
Planning the Menu
When you do the inventory, you will know exactly what food you still have on hand and what are meals that you can make. Once you know exactly what’s left in your pantry, you can use that data to plan the menu.
An inventory will also help you prevent a food shortage since you will know to order certain ingredients that you may need. Plus, if there’s a surplus of certain products, you will know to add it to the menu and incorporate them in other specials – therefore preventing them from going bad.
Tracking the Food Usage
A regular inventory will help you track the food usage, allowing you to pick up on different trends and eliminate the surplus. For example, if there’s a certain dish that has gained popularity, then you’ll have to stock up on ingredients in order to prevent a shortage.
Similarly, if there’s a dish that is no longer as ordered, then you may want to order less next time in order to prevent a surplus. This way, you’ll be saving on the order and your restaurant will be getting profit from it.
Calculating the COGS
The COGS, shortened from “cost of goods sold”, is the sum that you have spent on the inventory. The COGS is generally able to offer you an accurate image of the profit marking, being very helpful when you are budgeting. Ideally, your focus should be to keep the value of your inventory at about 1 1/2 times the value of the weekly COGS. This way, you’ll actually be able to get some profit.
Determining the Food Cost
Going through an inventory will help you control the waste and ascertain the worth of the food costs. For example, let’s say that you’ve kept buying a fancy ingredient that keeps going bad on the shelf. If it’s expensive, the average person with the average income will not be able to afford it – which is why it may go bad on the shelf.
Doing this inventory will tell you exactly how much money goes on the food and how much of that food ends up going bad. This way, you’ll be able to focus your next order on foods that stay fresh for longer – therefore preventing food waste.
Preparing the Inventory of a Restaurant
When you are preparing for restaurant inventory, you might want to organize the area first. You can do this yourself, or you may ask other members of the staff to do it. Throw out the ingredients that have expired (but make sure to mark them on a notepad), and group similar ingredients on the same shelves.
Decide on the unit costs and whether you’ll be using boxes, cases, pounds, gallons, and other measures. Furthermore, will you be doing the inventory on a piece of paper, or do you plan on going modern by using a program on your tablet? None of these choices are bad, but you’ll still want to decide beforehand which approach you want to go for.
Make sure that these inventories are done on a regular basis, at least once a week. You should use a certain day to do the inventory – for example, Saturday – and make sure that you do it at relatively the same hour every week.
In some cases, if the demand is high, you might want to do the inventory twice a week. And although it may look like the obvious thing to do, you should refrain from doing the inventory during the delivery.
Steps to Make a Restaurant Inventory
Each restaurant is different, but the steps are generally the same for every establishment.
- Take an inventory sheet and create five rows that you have labeled as follows: items, unit of measurement, inventory amount, unit price, and total cost.
- Add every item you have in storage to the “items” column – no matter if they are foods or cleaning supplies.
- Add the unit of measurement. For example, if you purchase pasta in boxes and tomatoes in pounds, you’ll be able to get a better idea.
- Add the number of each unit in the inventory amount. This way, you’ll be able to calculate the costs and prevent ingredient shortage or surplus.
- Add the cost of your units. For example, if you have tomatoes in storage and the cost for one pound is $2, then the unit price is $2.
There are several apps that you can also use – that is if you prefer doing things electronically rather than by hand.
Final Thoughts
An inventory may take a lot of work – but if you do it right, you’ll be able to organize your business much better. No matter if you own a small coffee shop or a bigger restaurant, a regular inventory will help you save on costs and increase your profit.
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