Why Your Food and Beverage Costs Are High To better understand the components of the cost of sales

(COG) cycle, we have developed this checklist for analyzing food and beverage costs. Circle all items that apply to your restaurant and figure your score at the end of the checklist. We have included a few quotations (just a few) from the I thought I heard it all file pertaining to food and beverage costs. MENU INFORMATION (Menu Development, Product Information, Product Specification) 1) Menu is not easy to read or understand: whaddya mean, its got bones? !*! 2) Too many or too few menu items: I got beef tacos, beef burritos, beef enchiladas... 3) Too many unpopular items on the menu: ooh, who would eat that? 4) The food is poorly presented: wheres the entree? !*! 5) Menu items are poorly priced: did they put gold dust on the Caesar salad or what?! 6) No balance between high and low-cost items: $25 for a filet & $23 for pasta?!* 7) No consideration of product availability: large Driscolls in February, no problem 8) Not enough personnel to produce menu: the cookies burned, I was grilling veggies! 9) Poor layout of or the wrong equipment: sorry, I burned the cookies again! 10) Poor training: diabetic, sorry, I thought the dessert was sugar-free 11) Ineffective promotion of menu items: 12) No standardized recipes or cost of sales information: thats the way I make it!! 13) Using the wrong method of preparation: griddle, grill, whats the difference 14) Cooking food at/for the wrong temperature and time: medium what, huh?!? 15) No standardized service procedures: so you gave them a whole cup of dressing? !*! 16) No specifications: do we use it by the case or the jar? 17) Poor information concerning vendors: yesterday was their delivery day? !*!
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PRODUCT PURCHASING (Bidding, Ordering and Receiving) 18) No competitive purchasing: I dont care, she sounds nice on the phone! 18) No centralized purchasing: you ordered it, well all right, so did I!! 19) Ordering too much or not enough: everyone likes anchovies, a case will go fast 20) No record of costs or trends: why do we buy swordfish only when its over $9 a lb.? 21) Poor relationship with vendors: yeah, wait, Ill get that driver !!* 22) No budgeting: well, I only bought a few and Ill eat them if nobody sells them

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Standing orders instead of flexible orders: why do we have 8 cases of decaff? *! Speculative purchasing: I heard the price was going up, well use it sooner or later Graft between purchaser and/or receiving person and vendors: hey, nice watch! No receiving records or procedures: did we get this? when? who signed for it?! No check on price, quality or quantity: a jar of capers $70? 12 cases? !*! what? No system for returns and credits: oh, is that what you wrote on the invoice?! * Lack of receiving equipment: thats 40 lbs.? yeah right, a scale, what scale?

152 PRODUCT PURCHASING (Storage and Inventory) 31) Products are not refrigerated properly: well it only sat out a few hours, 4 or 5 31) Products are not stored properly: something fell in the soup again 32) No daily inspection of storage areas: I know there were 2 cases yesterday 33) Poor sanitation and rotation of products: at least the mice eat well 34) Theft in storage areas: that was a great party you threw after work!! 35) No procedures for requisitions: but I just bought 30 cases of beer!! 36) No physical inventory: come in that early, you are crazy!! 37) No inventory reporting: yeah, I wrote it on the back of, I dont remember PRODUCT TRACKING (Preparation and Production) 39) No product yield tests: $8 a portion, how long have you been cutting meat?*! * 39) No use for byproducts or leftovers: ever hear of croutons??! 40) Over or under preparation: dont worry, well use it 41) No record of waste: someone else threw it out, it looked rotten, I dunno 42) Poor record of items produced by kitchen and bar: Ill be right back with the ticket! 43) No comparison of items prepared vs. items sold: boy, we used a lot of filets!! 44) No sales and cost of sales analysis: Im not sure, what is a good liquor cost?? PRODUCT TRACKING (Financial) 46) No audit of POS system or cash registers: 20 voids for $1000, who??, when?? 46) Poor cash controls and sales records: the bar was short ONLY $100 dollars?!! 47) Server or cashier theft: hey, nice car!!

No procedures for complimentary or employee meals: they had a bottle of DP?! 49) No sales projections: huh, it was dead over Labor Day for the 3rd year in a row??
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SCORING: IF YOU CIRCLED less than 5: maybe you should a write a book from 5 to 9: very good, keep going, cost of sales bliss is very near from 10 to 20: youre not going to Hawaii for vacation this year over 20: either get ready to work your backside off or call Dr. Kervorkian Correcting some items is a matter of common sense (e.g., #22: stop yelling at the driver, #31: stop leaving food out too long) and others a matter of expense (e.g., #30: buy a scale). Many of items 12-45 can be corrected by using the forms in How to Control and Lower Food and Beverage Costs. How to Control and Lower Start-Up Costs and How to Control and Lower Other Operating Costs contain forms that will help correct some of items 1-11. Financial controls, items 45-50, can be found in How to Manage Your Money.