If somebody asks you about the key factors for a successful restaurant, possibly it could be good food, outstanding service, and an excellent location. Yes, these are indeed the factors that contribute to the topline numbers. However, some of the restaurants operate on very tight margins. For instance, the margin of average quick-service restaurants (QSR) in the UAE falls in the range of 5% to 12%. So, the sale from a restaurant must be adequate to cover all the associated expenses and still generate a decent profit.
Food and Beverage (F&B) cost is one of the most significant cost components for any restaurant, and it ranges between 20% to 35% of the revenue depending on the restaurant-style. It means that even the slightest error in food servings can result in a severe dip in the margins. On the other hand, you can increase your margins by controlling your F&B costs, and that is where F&B control comes into play.
What Is Covered Under F&B Control In Restaurants?
F&B control essentially means manipulating staff’s behavior and maneuvering the processes responsible for the expenses. In other words, F&B control refers to the process by which a restaurant manager makes an effort to regulate, direct, and restrain people’s actions to achieve the desired objective.
Steps Involved In Controlling F&B Expenses In Restaurants
The well-established restaurants usually have a separate department to look after and maintain everything related to food and beverages costs. On the other hand, it becomes one of the critical responsibilities for the restaurant managers in the case of small and medium-sized restaurants. So, without further ado, let’s look at the steps involved in F&B control in restaurants.
Standardize Food And Drink Recipes
To ensure consistency, you must establish a standard for each food and drink recipe. All the staff members must follow the same recipe while preparing the items on the menu; otherwise, you won’t have any control over the quality of food or drink served in your restaurant.
Monitor Profitability Of Recipes
The kitchen staff should know the exact amount of ingredients that go into the preparation of each food item, including the number of servings. You should ensure that the entire kitchen staff has access to these recipes. In case you have more than one restaurant, standardization helps maintain consistency across outlets.
You should maintain a database for the food items on the menu along with their recipes. You should then calculate the cost of each food item, including the cost of raw material, delivery, and spoilage. It helps you formulate a menu price that results in a healthy profit margin.
Now that you know the cost and profitability of each item that comes out of the kitchen, you should review the menu at least once a month. Remove those items that are either not selling well or not generating enough profit. Add those items to the menu that are trending or are more cost-effective to prepare.
Supervise And Control Inventory
One of the best tools for F&B control is inventory management. You need to know about the products that are stocked in the warehouse along with their exact quantities because every money tied up in the inventory adversely impacts your profit margins. To manage F&B costs, you should consider product cost and shelf life as it would help in avoiding both overstocking and understocking.
Perform weekly inventory checks to ensure that there are no discrepancies or irregularities in the count. You can also use good inventory management software to make the process less complicated and more efficient. It will help keep track of the available stock and make data-driven decisions.
Hire Reliable Staff
You should have a strong and reliable restaurant team to help you run the restaurant’s daily operations efficiently. Your staff has access to the food items at all times, which can be tempting to some of them and may result in internal theft. For instance, a Dubai-based restaurant surprisingly found five staff members pocketing money from the cash register worth Dh 108,000 besides regularly stealing food items. Internal thefts and pilferages are nothing new for the restaurant industry, which means you have to be careful as a restaurateur.
Many restaurants suffer losses due to staff stealing food from the inventory, offering customer concessions to attract hefty tips, or giving away free food to friends and family. So, while interviewing the candidates, you should try to find out if, along with the experience and skills, they also have the desired personality traits – trustworthy and reliable.
Employ Smart Technology
Another way to increase efficiency and improve cost management is the use of innovative technology as a reliable POS system. With the help of the technology, you will be able to keep track of daily sales, manage inventory, monitor employee productivity, and many more. Other significant advantages of using such software include access to a large volume of data & detailed reports, and lower human intervention leading to fewer errors.
Besides, you can also consider installing security cameras to control internal theft and pilferage. The staff will be less likely to steal once they know that they are surveillance. So, this is another way of employing smart technology as part of F&B control in restaurants.
Many restaurants fail as they are unable to manage their operating costs and end up suffering huge losses. So, it would help if you stayed on top of your expenses to ensure your restaurant’s success. For that, you need to take the time to look closely at the various cost management strategies to identify the corrective measures to maintain the profit margins. The steps mentioned above will help you with the F&B control in your restaurant and expand your bottom line.