How to Use Recipe Costing to Lower Food Cost

 In 1. David Scott Peters, Food Costs, Menu

There is one system your restaurant must have to survive and most independent restaurant owners are bypassing it completely: recipe costing. Going through the process of creating recipe costing cards for all the items on your menu will ensure you lower food cost.

I have worked with thousands of restaurant owners at this point in my career, on top of the 30 years I spent in restaurants. Through my experience, I have seen one mistake repeated over and over again: menus developed without cost or profit consideration. Most independent restaurants do not have recipe costing cards.

Why do restaurant owners spend months planning their new restaurant, from what it looks like, the equipment needed, how many employees they need, their management team, every detail, so they can bring their dream restaurant to life, only to have no idea how much it costs to put food in front of their guests?

The development of an independent restaurant’s menu is usually very subjective and involves some sampling and presentation of recipes, then a few quick judgments about what fits the restaurant’s mold. The decisions are based on presentation and taste alone, with complete disregard to whether or not they will make any money.

Why is this a huge mistake? Recipe costing cards tell you if your menu items are going to bring in any money – the lifeblood to any business.

If you’re a restaurant owner who doesn’t have recipe costing cards, you may say, “I’ve got all the costs in my head.” You might not feel like you have to put them on paper because you inventory and place the order for every food item needed to produce the menu, so you think you’ve got a good idea of what things cost. This can kill your restaurant because what you think the costs are and what they really are is usually very different.

I guarantee if you put recipe costing cards in place right now, you’ll lower food cost and pour cost. Build a profitable menu with recipe costing cards.

If you’d like to learn more about how to create recipe costing cards once and then have them always be up to date, request a free demo of our restaurant management software, SMART Systems Pro.

For more systems you can use to lower food cost in your restaurant, download our free report, 3 Simple Systems to Cut Food Cost 2-3% Overnight. You can also view tips to lower food cost in your restaurant on this YouTube channel playlist.

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