Have you ever wondered how free food factors into food cost in your restaurant? Do you offer something for free in your restaurant? For example, chips and salsa. Or bread and butter? Or even condiments? Any product that leaves your shelves that you don't get money for still affects your food cost.
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About David Scott Peters: a restaurant management expert and founder of TheRestaurantExpert.com. He offers independent restaurant owners restaurant management tips, coaching and a software that will revolutionize their business operations and their profits.
About that free product...
Food cost is beginning inventory plus purchases minus ending gives you use and use divided by sales gives you food or pour cost. Then the more you use that doesn't bring in money, then the higher your food cost is going to be.
That's why I operate with the mantra "don't give any food away for free." That doesn't mean you change your menu or restaurant style or your culture. And it definitely doesn't mean you add it to the ticket. It just means you have to incorporate the cost of that free product into your food cost somehow.
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These videos cover ways to take action in the restaurant today to be more efficient and profitable. Whether you’re looking for ways to cut and control food costs, trying to stabilize your labor costs, or you’re interested in building a management team that actually manages, these tips will help you.
David teaches real solutions to the biggest – and smallest – challenges in independent restaurants. Watch this video and then take action!
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So how do you incorporate the free product into the cost of the menu item where it's incorporated? Create a consumable factor. Apply the same COGS calculation to only the free products. Combine that with some reports from your POS system, come up with a total number that becomes a line item on every recipe costing card.
Charge enough to cover whatever you gave away for free. It's a game changer. You can break it all the way down to fryer oil and have a fryer oil consumable factor on fried foods.
Watch this video to learn how to come up with the cost of goods sold calculation, what reports from your POS you'll need and how to make it all work together. Next your free product for guests will be paid for because nothing is free!
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