'Food Cost: 4 Important Variables (EXPLAINED)'

06:29 May 25 3 3

'Today, I explain the four variables you will need to Calculate Your Food Cost.  Without knowing your Food Cost, you\'re flying blind! For more great information, please visit my website at https://www.karnesconsulting.com/  Instagram: https://www.instagram.com/karnesconsulting/ Facebook: https://www.facebook.com/karnesconsulting/ Linkedin: https://www.linkedin.com/company/karnes-consulting-llc Twitter: https://twitter.com/karnesconsult       if you don\'t understand the four variables used in calculating your restaurants food costs you might be doing it all wrong in today\'s video I\'ll explain in detail those four variables so that we can make sure you\'re calculating your food costs correctly hi everyone Asher Carnes Karnes consulting my mission is to help real people accomplish their restaurant goals in today\'s video I\'ll be explaining the four variables used in calculating food costs and giving you details on each of these variables so you can better understand them first question of the day how often does your restaurant calculate its food costs go ahead leave your answer down in the comments below let\'s start a conversation I\'d love to hear what you have to say and if you enjoy this video please feel free to hit like and subscribe so that you can get updates whenever I post a new video on Sundays to start off let\'s get back to basics first why are food costs so important for your restaurant well there\'s two reasons first your food costs would compare to your food sales can show you whether or not your restaurant is actually profitable I believe that\'s extremely important when you\'re running a business second when you have accurate food costs you can tell whether or not your menu is priced correctly by doing this you can catch little problems for example client   remember the equation for food cost is beginning inventory plus purchases minus ending inventory all divided by your food sales all right if you need a refresher click up on the card I\'ve got a video on just the equation and how to calculate your food costs okay moving right along first variable beginning inventory alright what is this so this equation is used to calculate the periodic food cost what does that mean that means let\'s say for example you\'re calculating your food costs on a monthly basis starting with the month of May alright so the beginning inventory you would take on  you would take you would start with April 30th and at the end of service nothing else is going out all your sales are done alright you would do a count walk in dry storage everything food-related inventory sheet if some sort worked out with every single product that you use on your menu all right it is best practice to try to have the same person doing this process over and over and over every period every month all right they\'re gonna go through and consistency consistency consistency they\'re going to go through they\'re going to do the inventory accurately every time in the same order all right now once you get that beginning inventory number write it down put it in your spreadsheet okay the next number your purchases so fast forward now it\'s May 31st ok sit down all your receipts hopefully when those come in you\'re putting them in on a daily basis right when they come in to a spreadsheet with your purchases all right you\'re gonna take that purchase this number and you\'re gonna add it into the equation all right now that needs to be purchases make sure your category categorizing them correctly all right purchases just for the food the menu alright just ingredients for the food make sure that other things aren\'t getting mixed in all right thirdly you\'re going to do your ending inventory so we did our beginning inventory on April 30th fast-forward now may 31st it\'s the last day of the month end of the day all of our sales are in that same manager same person with the same inventory sheet and the same process too keep things consistent alright it\'s going to go through and they\'re gonna take another inventory alright it\'s gonna take a little bit of time but the payoff is well worth it so they\'re gonna go through check everything off do a full count boom sit down enter that number into there enter that number into the equation the last variable alright and this one\'s very important to have right is your food sales for that period ok this involves making sure that your POS system has all of the items in it categorized correctly ok appetizers sides food ok there can\'t be a Miller Lite mixed in with your food you can\'t have your dinner rolls mixed in with your mixed drinks alright make sure that that\'s all organized and categorized correctly I know it sounds completely crazy but I see this kind of stuff all the time people get lazy sometimes with that stuff they figure if the price is right it\'s gonna ring right no problem but make sure these things are categorized so you can get an accurate number please so you pull you pull that number from the POS' 

Tags: restaurant business , restaurant consulting , food cost , food cost formula , food cost tutorial

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