The Surprising Impact Not Doing Inventory Has on Restaurant Food Cost
Does the thought of weekly inventory send shivers down your spine? Can you hear your managers complaining and resisting now? Do you picture yourself buried in the walk-in for hours on end? Well, the good news is a restaurant that does $2 million in sales or less should absolutely be able to complete their food inventory in under an hour on a weekly basis. But before I get into why you should do weekly inventory, let’s talk about the surprising impact not doing inventory has on restaurant food cost and the cash you need to pay your bills.
Let's talk about the unintended consequences of you avoiding taking food inventory.
I get it. The fear of inventory is that it takes forever. I can hear your management team whining about it right now. But when you don't take inventory there are unintended consequences. It means you don’t have the numbers to manage your restaurant, so you’re flying blind, wondering why your food cost is so high.
It also means your employees aren’t understanding the value of what they’re using. You’re ordering so much product to make sure you never run out that the shelves are always full and nothing is precious to your employees. They look and there is always more on the shelf so when your cooks are making something, prepping a sauce, something such as Ranch dressing, they aren’t scraping the mayo out of the container to get every last bit, all usable product and your money. Instead, they get what they can easily and throw the rest away and grab the next one from the shelf because there is always more on the shelf.
Another unintended consequence when you have too much inventory is people steal from you. When the product disappears from your shelves with someone’s five-finger discount, your food cost goes up. They’re able to hide this from because you're not counting, and they know it.
Another unintended consequence is misplaced items. Picture the middle of a lunch rush, you you’re your hot special, a sandwich with your secret sauce, that’s selling like crazy. Someone runs into the walk-in to grab a new container of sauce, but because there is so much product on the shelves and nothing is organized, no one can find it, declaring the sauce all gone. The kitchen 86’s your number one selling item. Then later, after the lunch rush is over and your chef or kitchen manager walks into the cooler and find it exactly where it shouldn’t be, behind the shredded lettuce and carrots. This is a missed opportunity for profits.
When you don't take inventory, odds are you're not cleaning and organizing your walk in. It's dirty and messy, and you've got that terrible meat dangly stuff hanging from the eat racks. Now you’re jacking up your labor because somebody finally gets sick and tired of the messy walk in. You have to pay extra labor to empty it out, scrub it down, scrub all the racks, put them back in, reorganize the walk-in, and you're losing money.
Take that same exact description of what I just talked about in your walk, and you get lower health scores, which means lower sales, because nowadays your health scores are on the Internet and the news.
Finally, you have slower inventory turns. When you don’t pay attention to your product, you get inventory creep. You keep adding and adding to the shelves, never fully making a turn in your inventory.
The last time I checked, when you over order, when you have too much on your shelves and you don't have money in the bank account to pay your bills, you can't go to the power company with a case of steaks, drop it on the counter and say, here is my payment.
Think about it this way: when you take food inventory for value on a weekly basis to know your food cost, your costs will go down, your inventory levels will go down because you're paying attention, your walk-in will be clean and organized, your health scores will be higher, and your guests will be happy because you're not running out of product.
It's time to ditch the excuses and move towards signing up for a food and beverage management software solution and make weekly inventory a part of your weekly management. If you follow a shelf-to-sheet inventory system, you’re done in under an hour each week, if you do less than $2 million per year.
If you would like to learn how to own a restaurant that doesn't depend on you being in it to be successful, sign up for my free video course that teaches you three key principles to running a successful restaurant. 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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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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