How do you align food costs with business objectives?

1 Assess your current situation

The first step is to evaluate your current food costs and how they relate to your business objectives. You can use various methods to measure your food costs, such as the food cost percentage, the prime cost, or the contribution margin. You should also analyze your menu mix, your portion sizes, your inventory levels, and your waste management. By doing this, you will identify your strengths and weaknesses, as well as your opportunities and threats.

2 Set your goals and benchmarks

The second step is to define your goals and benchmarks for your food costs and your business objectives. Your goals should be specific, measurable, achievable, relevant, and time-bound. Your benchmarks should be based on industry standards, best practices, or your own historical data. For example, you may want to achieve a food cost percentage of 25% or lower, a prime cost of 60% or lower, or a contribution margin of 40% or higher. You should also align your goals and benchmarks with your target market, your value proposition, and your competitive strategy.

3 Plan your action steps

The third step is to plan your action steps to achieve your goals and benchmarks. Your action steps should be realistic, actionable, and prioritized. You should consider various aspects of your food cost control, such as menu engineering, purchasing, receiving, storing, prepping, cooking, serving, and accounting. You should also consider how to optimize your resources, such as your staff, your equipment, your suppliers, and your technology. For example, you may want to update your menu items, negotiate better prices with your vendors, implement portion control tools, train your staff on food safety and waste reduction, or use software to track your food costs and inventory.

4 Implement your plan

The fourth step is to implement your plan and execute your action steps. You should communicate your plan clearly and consistently to your staff and other stakeholders. You should also monitor your progress and performance regularly and adjust your plan as needed. You should use various tools and techniques to implement your plan, such as checklists, schedules, recipes, standard operating procedures, inventory systems, cost sheets, and reports.

5 Evaluate your results

The fifth step is to evaluate your results and compare them with your goals and benchmarks. You should use quantitative and qualitative methods to measure your results, such as financial statements, customer feedback, quality audits, or mystery shopping. You should also identify the factors that contributed to your success or failure, such as market trends, customer preferences, operational issues, or external factors. You should celebrate your achievements and learn from your mistakes.

6 Continuously improve

The sixth and final step is to continuously improve your food cost management and alignment with your business objectives. You should keep yourself updated on the latest industry developments, customer expectations, and best practices. You should also seek feedback and suggestions from your staff, your customers, your suppliers, and your peers. You should also review your goals and benchmarks periodically and revise them as necessary. You should always strive to deliver value to your customers and to your business.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?