Facts About The Restaurant Industry
Author: Mario Churchill
One very important fact about the restaurant industry, is the
fact that you absolutely need to keep consistent portion
control. Ingredients are purchased in weight, count and volume.
You will need to calculate the cost of all ingredients in a
recipe. Total the costs and divide this by the food cost you
want to charge for a menu item. This way you will have a price
for your menu for this item.
In the restaurant industry, you will need to count all
ingredients. As an example, a cheese burger with tomato,
lettuce, and mustard on a wheat bun with a small bag of potato
chips has a total cost of $2.10. If you want to get a 30% food
cost for this item, you will need to divide $2.10 by 30 % (.30),
which will give a menu price of $7.
Try to keep your food costs between 22 and 34%. If your food
cost is 22%, it will mean you will be spending 22 cents of every
dollar for food. This would leave you 88% of every dollar to
cover labor and other expenses.
If you want to use the factoring method, you can multiply the
cost of ingredients by three. This will only give you the cost
of the menu item and not include other costs.
When you use gross margin pricing, the formula is profit minus
the cost of goods sold divided by the net sales. For instance a
gross profit margin of 33:1 means that for every sales dollar,
you will have 33 cents to cover other expenses. This is the best
for calculating a dish with a high ingredient cost in the
restaurant industry.
The Prime Cost method works by adding the cost of labor and
cost of food, then add a percentage for profit. This method is
good in the restaurant industry for dishes that need a lot of
preparation.
Competitive Pricing matches what other restaurants charge for
the same product, with what you charge. Compare the prices by
studying the menus, and price your product not much higher or
lower than what others are charging.
The restaurant industry views combination pricing as a method
that uses all methods– factoring, gross margin, prime costs, and
competition. They try to balance prices of the competition with
your costs and what you need to make.
ChefTec Software– will allow you to customize reports and print
out inventory reports, recipes, make up ordering lists and
analyze recipe and menu costs by portion.
PC-Food II– Is an inventory and marginal management system for
use in all food service establishments. You can calculate and
keep food costs down, and keep track of selling prices based on
the margin you desire. You can generate displays and reports,
export files. You can use already programmed recipes, or add
your own recipes to the list and generate them whenever you want
them. This and so much more is available on this software.
You will find plenty of restaurant software on the internet.
About The Author: Mario Churchill is a freelance author and has
written over 200 articles on various subjects. For more
information about restaurant industry checkout
http://www.
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