How to Run a Restaurant: Take Inventory Weekly

how to lower food cost how to run a restaurant restaurant inventory
How to Run a Restaurant Take Inventory Weekly

 Do the words weekly inventory give you the hives? Does your mind immediately go to something else to avoid even thinking about it? If this is you, it's OK. I know you know it's important. Stay with me, and I'll share with you how you can make the process so much easier and complete a food inventory in under an hour, accurately, every week.

Taking inventory is a big deal in your restaurant.

  • If you want to calculate your food and liquor costs, you need to take inventories.
  • If you want to achieve your budgeted targets, you need to measure because that which we measure improves, which means you need to take inventories.
  • If you want to manage your cash flow, you need to manage your inventory.

Here are seven things you need to do to simplify your inventory management to better control your cost of goods sold. The goal is to use shelf-to-sheet inventory, which I’ll explain in a bit.

The very first thing you need is software. If you want to control your cost of goods sold, you need an inventory management system with recipe costing cards. I highly recommend Margin Edge for this. Call up and ask for Bruce and tell him David Scott Peters sent you. I do not get a commission or kickback in any way, but I can tell you that about 80 percent of my members, if they don't have software, that's the software package they go to. They have great customer support, a great interface and they have exactly what you need in your restaurant.

The second thing is you need to use your software to upload your invoices for updated pricing. Upload your invoices through software so every recipe card, every product, and your next order are all up to date.

Number three, you need to complete your batch recipes in the software. Batch recipes are soups, side dishes, sauces, desserts, components to dishes such as diced onions and carrot sticks. You want anything you manufacture in your software because then you can have three inventory units.

  • A batch unit and what the value is of it when you count it on the shelf
  • A storage unit and the value of it
  • A usage unit and the value of it

Not only do you have your products from your vendors, but you are also a vendor to yourself, and you need to know what products you have and their values.

Number four, now you set up shelf-to-sheet inventory so that you can take inventory as it appears on the shelf in the order you see it. As an example, if you bought McCain's potato wedges, and they lived in your walk-in freezer, and they’re in the first position when you walk in on the first shelf, then the first line of your inventory is going to be McCain's potato wedges in the appropriate unit of measure. If they’re in another storage freezer, you put them on the inventory sheet according to when in the inventory process you’ll count them, not by the product and/or the vendor. So, no matter what you have on the shelf, by setting up shelf-to-sheet properly with the product, the purchase unit, the storage unit, the usage unit, the batch recipe, the batch unit, the storage unit, the usage unit, you see it when you take an inventory, and you’re not searching around for all the McCain's potato wedges in all their various storage spots. When you do it that way, inventory takes a long time. By setting it up properly, you are on pace to do inventory in under an hour.

Number five, the day before inventory is supposed to be done, print off a physical copy of your shelf-to-sheet inventory to double check it is still set up in shelf to sheet order. If not, make the corrections so whoever conducts inventory can do it shelf to sheet.

Number six, remember to always take inventory using two people, usually the manager in charge of that department and any other person. This creates speed, accuracy, and it keeps honest people honest.

Number seven, when you've put your data into the software from your count sheets, if you didn't go directly into the software, look for errors. Does your food cost look wildly high or wildly low or just slightly off? Did all the sales get in there? Has every invoice been input? Did you make a mistake on your inventory, and you have $30,000 in shredded cheese because you counted ounces and it was a case price? Make the corrections, and you’ll know what your food cost is every single Monday.

Repeat weekly. Every week you're going to do shelf-to-sheet inventory. If you do it this way, I promise you're going to get it done in under an hour.

When you take weekly inventories, you get to look at your business and make proactive changes because you can see that your food cost is high week one in a month. That means you could say, “Hey, I need to look and see where my problems are. Do I have theft, waste, spoilage? What do I need to fix on my line? Am I ordering too much product? Do I have too much on the shelves? What are we doing to create a higher food cost?”

And then because you have three weeks to go to the end of the month, you can run features specials that are high ring at the register, low food cost, and high-perceived value kicks to bring the food costs back down. You can proactively change the rest of your month because you know what your numbers are and can get back on budget.

If you don't think weekly inventories are critical to you, then you weren't watching. You weren't listening. Now is the time to stop complaining, stop whining, stop coming up with every reason why inventory can't be done in your restaurant. Lead your business and get it in place today.

If you're ready right now to make some serious changes in your restaurant, you can also book a 60-minute call with me where we talk about your challenges and figure out exactly what is holding you back from having a restaurant that doesn’t depend on you being in it to be successful. 

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