MIL OSI – Source: Heart Foundation – Press Release/Statement
Headline: Making money from food
Anyone involved in the hospitality business knows that turning a profit from selling food can be extremely challenging. Many have tried and failed. Having a great product doesn’t necessarily mean you’ll have a great business.
Firstly, you need to know how much it will cost to make your product. This will help you work out how much to charge customers. And of course, the end price must be enough to cover all of your costs and leave you with a profit.
What kinds of costs do we need to consider? Well, there are those regular week-to-week costs, like rent, electricity, maintenance and wages. Then there are variable costs, such as food, beverages and equipment. And if you’re fitting out new food premises, that’ll cost money as well. All in all, it can be a fine balancing act making enough from your food to cover all these dreaded costs.
One of the trickiest costs to manage is food. In many kitchens, chefs cook intuitively and to their own taste. This may work for some establishments but it can make it is very difficult to accurately budget for a particular dish. This is even truer if you have different chefs producing the same dish on different occasions.
We recommend your chefs develop standardised recipes so no matter who’s preparing each dish, you’ll know the quality and quantity coming out of the kitchen. This will help you keep track of food costs and ensure a consistent product is being served.
To help you produce standardised recipes we’ve developed the following spreadsheet. It allows you to calculate ingredients needed for any number of serves, the cost of the recipe and the food cost percentage.
Food cost percentage takes the cost of the food and adds on a mark-up to give a retail price this is expressed as a percentage. Depending on the type of foodservice the food cost percentage can range from 25% (restaurants and bars with high set up cost) to 40% (tearooms and takeaway business with low set up cost).
For more information on keeping your food costs under control check out this link from the Restaurant Association of NZ:
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