Business and Operations
Five ways to make extra revenue: Making dough with Diane
Six quick ways to cut costs and increase revenue
By Diane Chiasson
Food cost is one of the biggest operating expenses in running a pizzeria. Ingredients are often perishable, and wholesale food costs have increased considerably in recent years.
You must also look beyond ingredients to cut costs. There are dozens of small changes that can save your pizzeria money every year. These minor changes will have a major impact on your profit margin.
1. SHARE WITH YOUR EMPLOYEES
When new team members enter your business, it’s important you first share with them all the facts, including the cost of your food, as well as what these new cost-effective changes are, and how much money they will save your pizzeria business. Your staff should understand everything about reducing waste, seeing potential problems, improving efficiency and understanding overall profitability. It’s also important to acknowledge and reward your employees for helping you meet your goals.
2. CUT COSTS IN THE KITCHEN
Cutting costs starts in the kitchen. Food waste is often the leading cost in pizzerias as cooks tend to overprepare. Buy only what you need. If you consistently prepare too much food, then your waste and food costs will go up. Prepare a daily kitchen prep list that will help you and your staff determine how much prep to do every day. It will also tell them how many ingredients they should have on hand. This list will help your kitchen staff plan and control food production.
3. CRUNCH YOUR NUMBERS AND SET A MONTHLY BUDGET
As they say, you can’t improve what you can’t measure. You cannot start cutting your costs without a realistic budget. Your monthly earnings will depend on how effectively your pizzeria is run. Preparing a budget will serve as a road map to building a successful business. You should know where every dollar of your budget goes. You must map out a realistic budget and estimate how much money your pizzeria will need on a monthly basis to stay afloat.
4. MANAGE YOUR INVENTORY
Ordering too much food is another common habit for many pizzerias and often they have more food on their shelves than they really need. These bad habits will lead to food spoilage and waste, and will prevent you from cutting your pizzeria costs. Controlling the portions of each pizzeria item is an excellent way to reduce waste. Checking your inventory on a regular basis will give you a good idea of how and at what rate your food is being used or wasted. Track your inventory either at the beginning or at the end of each day. Try to evaluate and optimize your inventory levels product by product, and be creative by using the same ingredients across your pizzeria. A lot of food is thrown away past its expiration date. Train your staff using the FIFO method (First In, First Out). Label food with its expiration date so that the oldest ingredients are in front to be used first. Take inventory daily to reduce the chance of employee theft and food waste.
5. RUN THE FOOD COSTS ON EVERY MENU ITEM AND RECIPE
Take a long, hard look at your menu. Set up a menu and recipe master inventory cost template on a spreadsheet to help you prepare an accurate costing for all of your menu items and recipes. Using your spreadsheet inventory will help you calculate the cost of every menu item and every recipe for comparison with the selling price of each menu item. You should also run a few reports through your POS system to track the sale of each menu item in order to identify the worst sellers. This will give you an immediate opportunity to replace them with some more popular items. Closely examine which items are the most often ordered and how much they cost you to make after taking into account your profit margins.
6. USE RECIPE CARDS
As you know, making the perfect pizza requires a lot of ingredients. Ratios are important to achieving the desired result. It’s also important to measure the ingredients properly, and as such, I highly recommend getting a professional digital kitchen scale.
The right amount of flour, liquid and fat will make or break a pizza crust, or any other baked product. A great method for ensuring consistency is to follow a recipe accurately when cooking, and you should definitely have recipe cards at each station. Each recipe card should contain a list of the ingredients and portions for each menu item. The most important thing in any foodservice business is consistency, and the only way to get consistency year round, is to create well-written and accurate recipes with detailed methods and good photos.
Diane Chiasson, FCSI, president of Chiasson Consultants Inc., has been helping foodservice, hospitality and retail operators increase sales for over 30 years by providing innovative and revenue-increasing food service and retail merchandising programs, interior design, branding, menu engineering, marketing and promotional campaigns. Contact her at 416-926-1338, toll-free at 1-888-926-6655 or firstname.lastname@example.org, or visit chiassonconsultants.com