Every restaurant owner knows that they’re in a tough industry. Most restaurants don’t even make it past the first year. However, by taking steps to improve your inventory tracking and management, you can significantly increase your chances of achieving profitability.
If this sounds complicated, don’t worry, you’re not alone. 52% of restaurant owners cite managing food costs as one of the most challenging aspects of running a restaurant. Thankfully, there’s a handful of technologies available to help you track and manage your inventory. There are many POS systems available specifically for restaurants that automatically keep count of items and ingredients when orders are placed.
Even if you automate the inventory tracking process with new restaurant tech, you still need to have an understanding of how food costs are measured in a restaurant. Typically, this is done using the food cost percentage formula which takes inventory levels, food purchases, and sales into account.
To help simplify this equation, this infographic goes over the steps involved in calculating your food cost percentage — the percentage of your revenue associated with ingredient costs — and how to effectively use it to track the cost of your inventory.
Knowing how to calculate your restaurant’s food cost percentage, the only way to get an accurate picture of this number is to track your inventory. You could use par inventory sheets, but this is extremely time consuming and leaves room for error. It’s best for you to leverage inventory tracking tech within your POS system to maintain efficiency and accuracy in your inventory tracking process.