There’s an assumption that food cost can, or should be, generally at 34 per cent. To understand why that average is probably not your restaurant’s target food cost, you have to understand prime cost, budgets, ideal food cost and menu engineering.
Prime cost is total cost of goods sold, plus total labour costs, including taxes, benefits and insurance. I teach restaurant owners to shoot for a 55-per-cent prime cost — not the national average of 65 per cent — and that you can run a higher food cost, lower labour cost, or a higher labour cost with a lower food cost. It doesn’t matter how you get to those 55 points.
Using a budget allows you to set your plan in progress for how you’re going to lower your food cost. For example, you can put the Key Item Tracker, Waste Tracker and the Restaurant Checkbook Guardian in place to reduce your food cost by three points right out of the gate. You do need to train everyone one month and then hold them accountable the next, because it’s not a post-it-and-forget-it set of systems.