As a restaurant/bar owner or manager, the key is to manage inventory 24/7. Cost of Good represents 20-40% of your left cost. While you need to have a certain amount of inventory on hand to make sure that you can serve customers their favorite drink (mine is piña colada!) or their favorite dish there is no point in having all of your ingredients up in inventory and being there on your shelves for over a month! All those dusty bottles, mayo, flour, wines -you pick- represent money that you could be investing back into your establishment.
So… what should your turnover rate be?
Let’s have a scenario. Covid19. Yup, you read that right. Let me get you back to March 2020, everything was normal as you planned to be. You were about to go to pick up your children from school/kindergarten, or you were going to finish watching your favourite series on Netflix, (I was at the beach with some friends celebrating a birthday) … Out of nowhere, they let us know that there is a new virus from China. We didn’t care at that point because we thought “oh it’s far away”, but then, it enters our country. The news started to say it can kill people and you didn’t know how you could get it, so you have to quarantine (while I am writing this, it just gives me the chills). Anyways, the first thing we bought (I still don’t know why) was toilet paper.
So, days went by and we had to take care of the toilet paper (because it doesn’t last forever), literally piece by piece, or square by square. Everything is closed, you start running out of toilet paper. What would you do if you didn’t buy for 3 months and only for 1 month? It just does not sound good at all when you come to that end. So, this is basically what happens with food! The longer managers can put off taking inventory, the better because simply, it isn’t fun. Just remember always the toilet paper situation.
Less Inventory = Less Lost Inventory
That is right! When it comes to inventory costs, you can often start losing money due to generous waiters or bartenders, or, if they know that there are plenty of more bottles under the bar and or plenty of shrimps in the freezer, they are more likely to hand about freebies and heavy pours with abandon. Excess inventory also makes you more prone to accidents, like broken bottles or recipients.
It is important to think of your inventory as real money. You wouldn’t leave a bunch of cash just sitting around for weeks, right? Well, the same rule applies to your inventory.
But I Hate Taking Inventory…
I am sorry to tell you this but even if you are the master of counting and recording, taking inventory simply isn’t fun and it ties up your time when you could be managing other aspects of your business.
Just think: If you speed up your turnover, you could take inventory weekly or bi-weekly, but there would be less to count. While you might be doing it more often, it will actually go faster and you can get back to enjoying the fun parts of your job or simply catching up on sleep (that sounds amazing).
It is Time to Invest in Technology
The single best thing you can do to bring down inventory costs is invest in inventory technology. DiningEdge allows you to scan products and place orders online. You can even generate charts that track how you are doing, where you are seeing losses and how certain brands are performing. These tools take all the guesswork out of the equation and streamline the entire process.
Figuring out the best way to handle purchasing for your business, bar, restaurant does come down to staying organized and not procrastinating. Using DiningEdge. Get a free demo can help make the entire process a lot less painful, which means that you are more likely to stick to a weekly or bi-weekly schedule and enjoy the benefits of having extra cash in hand and not tied up in your inventory.
So, start to work smarter, a little bit harder, while also saving time and reducing risk of loss!
See you in another EdgeBlog!