David Peters from The Restaurant Expert says many restaurants lose thousands each month because they don’t track their product inventory each week.
Weekly food inventory? Sounds like a lot of work. Well, it only takes an hour each week if you set up the right system.
Weekly food inventory video transcript
Now we’ve heard you’ve got to take inventory. All too many of us wait for once a year when the accountant says “What’s your year end inventory” to even think about it because it takes so much time.
Well one of the reasons is you’re not taking inventory properly. But let’s talk about this. I don’t want to get you do it annually. I don’t want to do it monthly on want you do weekly.
So why should I do a weekly inventory in my restaurant versus monthly. I’m going to share that with you in about 2 seconds.
Hello. This is Dave Scott Peters with The Restaurant Expert dot com. And I got to tell you I feel your pain. Reason number one why your inventory take so long is you not using a shelf-to-sheet system. We’ve set it up that in the walk in freezer in the first shelf in the first position is a 30 pound case of potato wedges. I’m going to inventory it by the case in the first position when I go down to the second position. The next product is there how I want it counted. So in this case by the case.
In the reach-in freezer I’ve got it by the five pound bag. I’m going to price it out and counted by the bag. On the line, I’ve got it by the loose ounce in the sixth position. And next five ounce portion bags of potato wedges.
See, count the product in the order it appears on the shelf. The way you want it counted. Well, I’ve got five million dollar restaurants that take inventorying under an hour on a weekly basis.
So now let’s assume you’re set up in a system in your business that you can take inventory in an hour and it’s worth the while because why. I want to know my cost of goods sold… my food costs specifically every single week. So again why weekly versus monthly.
Let’s say you’re a restaurant that takes monthly inventories and you find your food cost is high. Next thing you know the excuses fly. Well we must have miscounted. So you’ll see next month when we take an inventory while the food cost is high. It’s going to lower. We look at it in two months. I’m good. Well the truth of the matter is that second month goes by and all of a sudden your food costs are still high. It wasn’t a mistake. So you’ve made the same dumb ass mistake over and over again for 60 days and lost money hand over fist. Done nothing about it.
See now if I take a weekly inventory from one week to the next and there’s a problem. Well if I decide that it’s an inventory issue and I don’t go look for it I only have to wait one week, right?
I don’t wait a month. I wait one week. See there’s a problem I still have two weeks to fix it. But more importantly let’s say it’s not an inventory problem from one week to the next. My food cost is high. Do I have theft, waste, spoilage? Right now I have an opportunity to make sure my recipe costing cards are correct. I need to make sure on the line we’re using portion controls. I put an reports into make sure we don’t have theft. I start using a waste sheet to find the problems we do on a daily basis… stop them, fix them the same day so that I can fix this problem.
So let’s say I lost five hundred dollars in cost of goods sold in one week as a kitchen manager or a chef. I have three more weeks for the rest of the period for me to make small changes to the business to fix that I don’t lose five hundred, five hundred, five hundred, five hundred… two grand in the month. I may lose the 500 and I may run some specials on purpose that have high cash contribution with low food costs to make that 500 dollars back over the next three weeks.
Small changes. See what happens is by doing weekly inventories you go from a reactive management team to a proactive management team. You want to take control of your cost of goods sold. I’m telling you right now it ain’t annual inventory, it ain’t monthly inventory, its weekly inventory.