How To Calculate Food Cost Percentage (& SAVE $$) | Cafe Restaurant Management Tips

How To Calculate Food Cost Percentage (& SAVE $$) | Cafe Restaurant Management Tips,

Food cost is one of 3 giant expenses that take a bunch of your margins. If you don't know your food cost or how to manage it, you'll be in big trouble. It is one of the numbers you MUST understand well and tinker around. That is..if you want to open and run a successful restaurant or food and beverage business.

And when restaurant margins are already so thin, you want to do as much as you can to reduce your expenses. One of them is you can control is reducing your food costs.

What you need to do is understand that there are two food costs: Ideal and Actual. Ideal is the cost of goods sold (COGS) in a perfect world - where there is no food wastage or theft. Actual takes into account those mishaps - which is the reality. When you know both numbers, you can compare them and see what you can do to fix it. How close are they? If your Actual food cost percentage is way higher than your Ideal food cost percentage, that means you have a big problem in your hands. The good news is that you're atleast aware of the discrepancies and can make adjustments. Many rookie restaurant owners and restaurant management fail to know their numbers and end up driving their business to the ground.

I can't emphasize enough how important it is to know your numbers.

So if you're a restaurant owner, a small business owner, or part of the restaurant management team and want learn how to calculate food cost percentage, ways to reduce food costs, food costing and pricing, or simply how to run a restaurant successfully....keep watching!