Managing Food Cost Recession Style

Two weeks ago, we talked about the futility of managing food cost by compromising quality, reliability, or supplier relationships. (See Food Cost: This Horse Is Lame. Stop Beating Her, Brother…“)

Here’s the deal: You shouldn’t be paying more for the ingredients than the other guy but you shouldn’t be spending the majority of your time checking prices either. Cost is just a part of management and not a whole other job.

It is easier to grow your revenues by 5%
using the right marketing tactics than it is
to bring your food cost down by the same 5%

I know it’s a stretch but… if you were to knock down your food cost by 5%, what would it mean to you in terms of profits? On a $100K monthly revenue and $30K in food cost, that’s  a respectable $1.5K in new profits. Not bad so far.

Alas, you don’t have to be a betting man to know that inevitably food cost will go up again, wiping out the savings you have worked so hard to create.

On the other hand, when it comes to marketing, you have 2 options:

  1. Get more new guests to check out your food, or
  2. Bring in existing customers more often.

The latter is much easier than the former. One good way to do that could be a V.I.P. Club. Not only can you get them to come in more often, you can get them to bring their friends too.

A V.I.P. Club that increases your revenue by the same 5% will put an extra $3.5K in your pocket — that’s $5.0K in extra revenue minus $1.5K in food to feed all the additional customers!  The best part is, you can do this again and again, month after month. Once a successful marketing method is in place, it works month after month, indefinitely, with little additional effort.

Now, which one would you rather have: A doubtful $1.5K once or a more likely $3.5K over and over again?

READY TO TAKE YOUR RESTAURANT BUSINESS SERIOUSLY?

Say "enough's enough" to half-empty dining rooms, humdrum shifts, and wondering which half of your marketing budget was wasted.

73% of teenagers and adults are walking around with a smartphone (iPhone, Android, or Blackberry) in their back pocket. They use is for everything: Playing games, checking emails, texting their friends and ... googling your restaurant's website. If your website is not mobile ready, you're missing out on a lot of walk-ins. Download our Restaurant Commando's Mobile Readiness Checklist.

Watch this quick video about how to set up a Birthday Club that practically runs on an auto-pilot. This is going to be the easiest, fastest money you will ever create in you restaurant business.

About Chief Commando

Well, actually, Chief Commando is two people, Troy Authement and Alex Makarski. Troy and Alex combined their knowledge and experience to help independent restaurant owners and emerging chains create more growth and more profits in their businesses. Together, they provide a unique blend of expertise not available anywhere else in the industry.

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