Cost Management in restoration, more than numbers, strategies (2021)

Cost in food restoration

A permanent concern for everything administrator, in any of the sectors in which it operates, has been precisely the control of costs; and this has been reflected in the intense search for alternatives that allow identifying where leaks occur and being able to contain them; in order to reaffirm the validity of the, always alluded to, business principle of obtaining the maximum profit at the minimum cost.

Very particularly, in the service companies, and fundamentally in those of restoration, cost control becomes a mechanism, worth reiterating, of control over the rest of the activities that are generated by the different areas and that in some way, directly or indirectly, guarantee the final customer service. This becomes, in my opinion and to use a metaphor, the thermometer that measures and regulates the temperature the organization.

For a company, no matter its size, to be profitable, formal goals or standards are set such that its financial results are positive, starting in the first instance to define a budget that is contrasted with the different records of each of the operations that occur in the organization and that facilitate the taking of strategic and the adoption of measures that contribute to the achievement of planned objectives.

Therefore, it can already be said that cost is the value of the resources used to achieve a specific planned objective.

But seen in this way, the cost would only be a necessary expense that must occur and must be assumed; but if you look at it from the angle of the role it plays in economic and financial results; as well as in the image that they contribute to society, customers and, of course, the competition; the costs would be more than that necessary expense to photograph the efficiency in which the organization is capable of generating benefits.

It is useless for a company to identify and improve processes, select its suppliers exquisitely, manage inventories, rationalize human resources, invest in training, prepare technical files and scandals; if not there is a economic awareness of the workers who work in the industry, and more than conscience, sense of belonging by the organization. This is the first great need that the administrator must be able to satisfy his restaurant, so that each one of the actions that he implements has results. For this reason, the personnel selection process must be carried out “with clamps”, using street jargon.

Regarding the diversity of costs, any book that deals with the subject refers to two types: fixed and variable costs. Somehow, following the logic of the different conceptions that have been issued about them and landing them properly to the activity of restoration, I will approach them in a quite simple way:

In the activity of restoration Although the total fixed costs will always be the same whether or not the sale occurs, they will not be the same for all units; However, the unit variable cost is constant per unit, hence it can be said that the fixed cost per unit is fixed for a given period and with a certain level of use of the installed capacity, and that the fixed cost is proportional to the periods or stages within the management of food and drinks.

It may interest you:  Control of costs and margins in banquets. (2020)

In this type of activity the possible variable cost to control efficiently is the cost of food since its variation depends only on changes that occur in the price and quantity of raw materials used in the preparation of the dish. Therefore, it becomes the main factor for fixing the cake cost1 of a plate, considering that the expense per man-time, as well as other general expenses such as depreciation, energy, etc., are almost constant.

In this way, it is proposed that the cost of food will oscillate between 25 and 40 percent, constituting labor and general expenses between 35 and 55%, to obtain a net benefit between 5 and 20 %.

Considering this, it can be said that costs will have a great influence when deciding on the type of menu and the variation of offers to be made; the selection of suppliers and even the hiring of staff.

But just as important as the analyzes that allow identifying those costs that are influencing the results of the organization, it is beneficial for the company to identify what factors affect them, and then proceed to reformulate the actions that, as previously stated, lead to the achievement of the proposed objectives.

In this sense, and combining actions with objectives, I consider that there are several important elements that contribute to their control:

The first is Prepare a detailed, analytical budget on solid foundations. The budget becomes an important control tool. The different deviations that occur in it when analyzing the planned with the actual executed, the administrator can identify the areas and periods in which the greatest expenses occur.

The second, that when setting the menu to be offered, they have the technical sheets of the different elaborations, updated and with the maximum of admissible and objective specifications.

As a third element, that the installation does not focus only on what you spend, but on what you have left at the end of each day and evaluate the state in which these stocks are to be represented or used the next day. This will really allow control the daily cost that has generally been incurred, as something normal that happens in kitchens, some ingredients can be lost in the manufacturing process; for example, an X sauce is prepared, which constitutes a base for various elaborations and has no outlet at all.

In the fourth position I place setting the cost index for food and beverages. Once the administration If the goal is set that food and beverages will work at a certain percentage of costs, it will be able, to the extent that each of the expenses in the different elaborations - sales, occur, to measure the behavior of the different products.

It may interest you:  Computing vs. Inventory management.

The formula to calculate the operational index of the different offers is simple, you divide the manufacturing cost by the sale price and you will obtain a value, which will tell you that the item you are evaluating operates at an equis (x) cost index. .

IO = (CA / PV)


IO = Operational index
CA = Cost of Food (plate)
PV = Sale Price (Plate)

For example: A shrimp salad costs $ 0.89 cents to prepare and is sold at a price of $ 3.50, the cost index in which that dish will operate will be 25% or for each weight of sale $ 0.25 cents are spent in the preparation of this dish. If the organization has considered that the cost index at which it wants its organization to operate is 33 cents for food, this dish is working below, therefore in terms of cost, it is a profitable offer for the restaurant.

Now this is simple, but the complex thing is to be able to define that level at which you want to work and it should not be established based on a single criterion (for example the behavior of the previous year). This requires an in-depth study of the prices of raw materials in the market, as well as the forecast of changes that may occur in the projected period. The entries and exits of suppliers in the market; the quantities to be offered in the different elaborations, etc.

As a fifth aspect, and in line with the third element raised, that the control of daily spending is not only carried out on the quantities of merchandise that have intervened in the production process, but consider the conditions in which the equipment is operating (for the elaboration and conservation of the merchandise); the adequate use of meters (to serve the standards defined in each unit), losses when serving the dish in the kitchen, as well as interruptions that occur due to unforeseen failures, breakages, etc.

Likewise, it is important to highlight that in this control process, the personnel of the accounting and warehouse areas play an important role. It happens that many organizations when implementing computer systems, when they receive raw materials, they tend to average between the cost of the merchandise already in stock and the new one acquired (when their prices are different) and thus are accounted for when sales are recorded, which does not offer real information on the cost of the elaborations. So, require that the cost analysis be done on the basis of the real price of the merchandise used and not the one the system is reporting.

And as a really important and human aspect; identify the needs of the personnel that offer the service. If you manage to communicate with your employees, you will be able to know how they think, but also what they need, avoid conscious losses; losses that can be attributed to factors other than the real ones. I am not saying to give the worker what may constitute a potential sale; but put in a balance what is better: to assume an expense whose origin is known or to assume it as something that was never really like this.

It may interest you:  Factors influencing buffet table costs

Check daily those preparations that cost you more to conserve than to sell once made the next day and plan a sale of them to the workers or add it to the employees menu; they will see it as a detail of the administration and at the same time they will solve a problem that they may be presenting, just as the company will not obtain the gross profit margin if the sale were to an external client, but will recover the cost of the investment.

Equally important, and with a transcendental incidence, it constitutes the receiving process of the goods, of which the specifications that must be met to be accepted by the Maître and the Chef have been previously established.

If the reception process, which these managers may not always be in, is carried out without adequate knowledge, merchandise that may not meet these specifications may be accepted, and although its use does not affect the production process, it may affect the norms (grammages) established for each plate and the number of servings is not the projected, therefore the planned cost is altered.

Last but not least, it requires rigorous control, the process and storage conditions of both raw, semi - processed, processed but not cooked food and those already cooked. The most important record of good storage practices is the no. store more than essentials to meet your needs for a limited period of time. Unnecessarily large inventories serve to increase the danger of loss due to deterioration, waste, theft or theft. The conservation areas must have the adequate temperature and humidity for the optimal conservation of the same.

Finally and without offering magic formulas, more than calculations, strategies are also required, cost management is not only the analysis of the numbers, but of those issues that can have an impact on those numbers and that can well be controlled so these are not altered or offer information that is not real.

I am a dreamer and in my dreams I believe that a better world is possible, that no one knows more than anyone, we all learn from everyone. I love gastronomy, numbers, teaching and sharing all the little I know, because by sharing I also learn. "Let's all go together from foundation to success"
cost in restoration