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RESTAURANT Buyers Guide Ebook V2 PDF
RESTAURANT Buyers Guide Ebook V2 PDF
Introduction 03
A r e y o u s t r u g g l i n g w i t h h i g h c o s t s i n y o u r r e s t a u r a n t o r b a r , w i th no
real visibility into where your business is losing money?
F o o d a n d b e v e r a g e i n v e n t o r y m a n a g e m e n t is c r u c ia l .
W i t h a r o u n d 2 5 t o 3 5 p e r c e n t o f a r e s t a u r a n t ’ s o p e r a t i n g b ud g e t
d e d i c a t e d t o p u r c h a s i n g f o o d (t h a t ’ s n o t e v e n t a k i n g i n t o ac c o unt
b e v e r a g e i n v e n t o r y c o s t s f o r t h e b a r ), p r o p e r i n v e n t o r y m a na g e m e nt
can significantly improve expected revenue.
I n v e n t o r y m a n a g e m e n t i s t h e p r o c e s s i n w h i c h y o u r b u s i n e s s m o ni to r s
a l l o f i t s s t o c k . T h i s p r o c e d u r e i n v o l v e s y o u r r e s t a u r a n t o r b a r ta k i ng
r e g u l a r i n v e n t o r y c o u n t s ( w e e k l y , m o n t h s o r q u a r t e r l y ), a l lo w i ng y o u to
m o n i t o r e x a c t l y w h a t i n v e n t o r y y o u h a v e a n d w h e r e i t ’ s b e i ng us e d .
T h i s p r o c e s s w i l l h e l p y o u r b a r o r r e s t a u r a n t t o f i n d w h e r e m o ne y i s
being wasted, improve your ordering processes and drive up
profitability.
T h e k e y t o a n y s u c c e s s f u l b a r o r r e s t a u r a n t i n v e n t o r y m a n a g e m e nt
s t r a t e g y i s t h e i m p l e m e n t a t i o n o f a n i n v e n t o r y m a n a g e m e nt s y s te m .
T o h e l p g u i d e y o u t h r o u g h t h e p r o c e s s o f f i n d i n g a s o f t w a r e s o l uti o n
t h a t w o r k s f o r y o u r o r g a n i z a t i o n , w e ’ v e c r e a t e d t h i s c o m p l e te b uy e r ’s
g u i d e t h a t l o o k s a t w h a t a n i n v e n t o r y m a n a g e m e n t s y s t e m i s , w h y i t’s
use is more successful than a spreadsheet, how your business will
benefit from its use and how much these systems cost.
W e h o p e t h i s b u y e r s ’ g u i d e h e l p s t o a n s w e r s o m e o f y o u r i n v e nto r y
management system questions!
B u t h o w d o e s i t h e l p y o u r b u s i n e s s a c h i e v e t h i s ? T h r o u g h i ns i g h tf ul
a n a l y t i c s t h a t l o o k a t y o u r b u s i n e s s ’ s i n v e n t o r y p r o c e s s e s at a g r a nul a r
level.
T h e r e s u l t ? I n c r e a s e d c o s t s a v i n g s a n d s m a r t e r i n v e n t o r y d e c i s i o ns th a t
significantly improve the profitability of your bar.
L e t ’ s t a k e a l o o k a t s o m e o f th e b e n e f i t s o f a f o o d / b e v e r a g e i nv e nto r y
management system in more detail.
There are a number of reasons why restaurant and bar owners will
b e n e f i t f r o m i n v e s t i n g a n d i m p l e m e n t i n g a n i n v e n t o r y m a n a g e m e nt
system into their accounting processes, here are a few of the key
benefits.
C o m p l e t e v i s i b i l i t y i n t o y o u r in v e n t o r y
L o s i n g m o n e y i n f o o d a n d b e v e r a g e i n v e n t o r y i s e a s y t o d o , b ut i t c a n
h a v e a h u g e i m p a c t o n y o u r b o t t o m l i n e . T h r o u g h t h e u s e o f a n i nv e nto r y
m a n a g e m e n t s y s t e m , y o u w i l l h a v e c l e a r v i s i b i l i t y o f w h a t ’ s c o m i ng i n
and out of your restaurant or bar. You know exactly where you are
e x p e r i e n c i n g i n v e n t o r y i n e f f i c i e n c i e s t h a t a r e a f f e c t i n g y o ur
profitability.
Cost savings
Poor food and beverage inventory control is
actually one of the leading causes of lost money
for bars and restaurants. Put a stop to those
hidden costs by using an inventory management
system to gain complete visibility and analytics
into your inventory processes and decisions.
Improved efficiency
Are you still analyzing your inventory counts using
manual spreadsheets? Inventory management
software will automate these backend processes,
g i v i n g y o u m o r e a c c u r a t e i n s ig h t s a n d a l l o w i n g
5
your team to focus on higher-value
responsibilities.
All of These Benefits
Better customer satisfaction Lead to Higher Profits
When customers visit your
restaurant, they expect to be able to Profit margins are
order their favourite dish. If you typically incredibly
can’t deliver that due to a product slender in the
shortage, it has a serious impact on hospitality industry, and
not only customer satisfaction, but that means successful
also customer loyalty as well. Your inventory management
ability to meet customer is crucial, for your bar or
expectations, revenue targets and restaurant. After you
profit goals is directly influenced by account for the
your ability to successfully manage ingredients, the venue,
your restaurant inventory. the staff and all of your
business’s daily
Reduced waste operations, there may
Restaurants are unpredictable, and only be a small profit on
without proper inventory each menu item.
management procedures products
can easily become unaccounted for. This means that one
In fact, shrinkage (commonly known small miss-calculation in
as variance) caused by theft, product your pricing, or a hiccup
spoilage, breakage, spillage or human in your inventory
error is a common issue for most counting, could seriously
restaurants, and without proper impact how much profit
inventory management you won’t your business brings in.
even have the visibility to see that An inventory
it’s happening. management strategy
that uses insightful
The benefits of successful software will ensure
inventory management are endless your business is
for your restaurant or bar, and can profitable.
result in huge ROI. The cost savings
and improved profitability you
realize will ensure your
r e s t a u r a n t / b a r h a s a l l t h e d a ta i t
needs to grow!
CAN’T I JUST USE A MANUAL
SPREADSHEET TO MANAGE MY
INVENTORY?
A s a b a r o r r e s t a u r a n t o w n e r y o u k n o w j u s t h o w i m p o r t a n t i t i s to k e e p
track of your inventory.
A c c u r a t e d a t a i n t o y o u r i n v e n t o r y l e v e l s g i v e s i n s i g h t f u l a na l y s i s a r o und
how your business is financially performing; what your periodic
a u t o m a t i c r e p l a c e m e n t ( P A R ) l e v e l s h o u l d b e f o r e a c h i t e m (th e i d e a l
a m o u n t t o o r d e r ) ; w h e r e y o u r b u s i n e s s i s m i s s i n g p r o d u c t s; a nd a h ug e
n u m b e r o f o t h e r f i n d i n g s - w e c o u l d d i s c u s s t h e b e n e f i t s o f a c c ur a te
inventory data forever!
T h e p r o b l e m i s , m o s t b a r s a n d r e s t a u r a n t s a r e s t i l l u s i n g p e n, p a p e r a nd
m a n u a l s p r e a d s h e e t s t o k e e p t r a c k o f i n v e n t o r y c o u n t s a n d a na l y ze th a t
information.
S p r e a d s h e e t s a r e a n i n e f f e c t iv e m e t h o d o f g a t h e r i n g a n d ana l y zi ng
inventory data.
A l l o f t h i s r e s u l t s i n a s e r i o u s l a c k o f v i s i b i l i t y a n d c o n t r o l o v e r y o ur
restaurant or bar’s inventory.
I n v e s t i n g i n a n i n v e n t o r y m a n a g e m e n t s o l u t i o n f o r y o u r r e s ta ur a nt o r
b a r i s a w a y f o r y o u r b u s i n e s s t o a u t o m a t e a n d m a n a g e i t s i nv e nto r y
processes in one centralized and easy-to-use platform.
T h i s c a n h e l p y o u n o t o n l y s t r e a m l i n e a l l p r o c e s s e s a s s o c i a te d w i th
i n v e n t o r y m a n a g e m e n t , b u t a l s o g a i n c o m p l e t e c o n t r o l a n d v i s i b i l i ty
i n t o y o u r c u r r e n t i n v e n t o r y . T h r o u g h i n s i g h t f u l a n d a c t i o n ab l e d a ta , y o u
c a n m a k e s t r a t e g i c d e c i s i o n s t h a t d i r e c t l y i m p a c t t h e p r o f ita b i l i ty o f
your restaurant or bar.
T h e r e ’ s s i m p l y j u s t n o w a y o f a c h i e v i n g t h i s b y m a n a g i n g y o ur f o o d a nd
beverage inventory using spreadsheets.
WHAT INVENTORY COSTING METHOD
SHOULD YOU USE ON YOUR SYSTEM?
I f y o u ’ r e c o n s i d e r i n g i n v e s t i n g i n a n i n v e n t o r y m a n a g e m e n t s y s te m ,
t h e n y o u ’ r e p r o b a b l y w o n d e r in g h o w y o u w i l l b e t t e r c a l c u la te y o ur f o o d
and beverage costs using the software.
T h i s i s a h u g e p o i n t , s i n c e t h e s u c c e s s a n d p r o f i t a b i l i t y o f y o ur b us i ne s s
depends on accurate inventory data that guides smarter decision
making.
P a y t o o m u c h f o r y o u r s t o c k a n d c h a r g e t o o l i t t l e f o r y o u r m e nu i te m s
a n d y o u ’ l l b e l o s i n g o u t o n a h e a l t h y p r o f i t m a r g i n , b u t p u r c h a s e th e
r i g h t a m o u n t o f s t o c k a t t h e r i g h t p r i c e s - a n d w o r k o u t t h e o p ti m um
p r i c e t o s e t y o u r m e n u i t e m s - a n d y o u ’ l l b u i l d a h i g h l y p r o f i ta b l e
business.
T h e r e a r e t h r e e p r i m a r y a c c o u n t i n g m e t h o d s t h a t r e s t a u r a nts a nd b a r s
can use to determine their costs:
1. F i r s t - i n , f i r s t - o u t ( F I F O )
2. L a s t - i n , f i r s t - o u t ( L I F O )
3. W e i g h t e d a v e r a g e c o s t ( W A C )
H e r e a t S c u l p t u r e H o s p i t a l i t y w e r e c o m m e n d t h a t t h e F I F O a c c o unti ng
method is the one that most restaurants and bars use, since it is a
t y p i c a l w o r k f l o w f o r m o s t r e s t a u r a n t s t o a v o i d p r o d u c t s p o i l a g e a nd
expiration.
H o w e v e r , w e w o u l d b e m o r e th a n h a p p y t o d i s c u s s w i t h y o u th e p r o s
and cons of each method to make sure that you are using the
accounting method that works best for your unique business.
HOW TO CALCULATE YOUR
POUR COST
T h e r e s u l t ? Y o u w i l l b e a b l e t o i d e n t i f y w h e r e y o u a r e l o s i ng m o ne y th r o ug h
l i q u o r s h r i n k a g e , a s w e l l a s g a i n i n s i g h t i n t o y o u r b a r ’ s t o p a nd w o r s t
performing products.
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HOW TO CALCULATE YOUR
FOOD COST
T h e f i r s t s t e p o f t h i s i s t o u n d e r s t a n d y o u r f o o d c o s t p e r c e n t a g e.
F o o d c o s t i s t h e r a t i o o f a r e s t a u r a n t ’ s c o s t o f i n g r e d i e n t s (f o o d
i n v e n t o r y ) a n d t h e r e v e n u e t h a t t h o s e i n g r e d i e n t s g e n e r a te w h e n th e
m e n u i t e m s a r e s o l d ( f o o d s a l e s ). F o o d c o s t i s e x p r e s s e d a s a
percentage.
F o r e x a m p l e , i f a l l o f t h e i n g r e d i e n t s y o u u s e d t o c r e a t e y o ur s p a g h e tti
a n d m e a t b a l l d i s h c o s t $ 4 a n d y o u s e l l t h a t d i s h o n y o u r m e nu f o r $ 1 0 ,
then your food cost percentage would be 40 percent.
T o g o o n e s t e p f u r t h e r , y o u n e e d t o u n d e r s t a n d y o u r r e s t a ur a nt’s f o o d
v a r i a n c e. V a r i a n c e , o r s h r i n k a g e , i s a te r m u s e d t o d e s c r i b e t h e
d i f f e r e n c e b e t w e e n w h a t i s e x p e c t e d a n d w h a t a c t u a l l y h a p p e ne d .
V a r i a n c e i s s i m p l y t h e d i f f e r e n c e b e t w e e n h o w m u c h y o u s p e nd o n a
product, compared to the actual usage amount cost.
T h e c a l c u l a t i o n i n t h i s s i t u a t i o n w o u l d b e $ 1 0 (t h e v a r i a n c e
amount)/$100 (the usage amount cost) - 10%.
I f y o u r i n v e n t o r y u s a g e a m o u n t a n d y o u r s a l e s d a t a d o n ’ t e q ua te , th e n
t h a t ’ s g o i n g t o p u s h y o u r o v e r a l l f o o d c o s t p e r c e n t a g e u p , m a k i ng y o ur
menu items more expensive to create.
U n d e r s t a n d i n g y o u r f o o d c o s ts a s w e l l a s y o u r f o o d v a r i a n c e , g i v e s y o u
t h e o p p o r t u n i t y t o b e t t e r c o n t r o l y o u r i n v e n t o r y a n d m a k e c h a ng e s th a t
directly impact the profit margin of your menu items.
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HOW MUCH DOES AN INVENTORY
MANAGMENT SYSTEM COST?
O n e o f t h e m o s t c o m m o n q u e s t i o n s w e r e c e i v e f r o m r e s t a ur a nt a nd b a r
owners here at Sculpture Hospitality is ‘how much does a
food/beverage inventory management system cost?’
W h i l e t h e r e a r e c o m p a n i e s o u t t h e r e w h o w i l l c h a r g e y o u f o r th e i r
s o f t w a r e w i t h o u t r e a l l y t a k i n g t h e t i m e t o u n d e r s t a n d y o u r b us i ne s s , i n
r e a l i t y t h e r e ’ s n o o n e p r i c e d s o l u t i o n t h a t f i t s a l l w h e n i t c o m e s to
inventory management.
E a c h r e s t a u r a n t a n d b a r h a s th e i r o w n r e q u i r e m e n t s , o b j e c ti v e s a nd
g o a l s , a n d t h a t m e a n s e a c h b u s i n e s s r e q u i r e s a u n i q u e i n v e nto r y
management software service.
c u s t o m e r s u p p o r t t o m a x i m i z e t h e i r u s e o f a r e c e n t l y i m p l e m e nte d
b a r / r e s t a u r a n t i n v e n t o r y m a n a g e m e n t s y s t e m . T o t r u l y o p t i m i ze th e R O I
you realize from the use of an inventory management system,
technology must be combined with expert advice.
U n f o r t u n a t e l y , t h e v a s t m a j o r i t y o f b a r a n d r e s t a u r a n t i n v e nto r y
management software providers don’t provide this service. They simply
l i c e n s e t h e u s e o f t h e s o f t w a r e t o r e s t a u r a n t / b a r o w n e r s and th e n l e a v e
i t u p t o t h e m t o f i n d t r e n d s a n d p a t t e r n s i n t h e a n a l y t i c a l d a ta .
T h a t ’ s w h e r e S c u l p t u r e H o s p i t a l i t y i s d i f f e r e n t . W e h a v e l o c a l i nv e nto r y
m a n a g e m e n t s p e c i a l i s t s w h o u n d e r s t a n d h o w t h e s o f t w a r e w o r k s a nd
h o w t h e d a t a c a n b e u s e d t o p r o m o t e g r o w t h f o r y o u r s p e c i f i c b us i ne s s .
N o t o n l y h a v e w e d e v e l o p e d a n i n n o v a t i v e f o o d a n d b e v e r a g e i nv e nto r y
m a n a g e m e n t s y s t e m , w e h a v e t h e e x p e r t s t o h e l p y o u i m p l e m e nt i t
successfully.
W e w i l l e n s u r e t h a t y o u r i n v e n t o r y m a n a g e m e n t s y s t e m i s c us to m i ze d
p e r f e c t l y f o r t h e u n i q u e r e q u i r e m e n t s o f y o u r b u s i n e s s , a n d y o u k no w
exactly how to leverage the data to boost profitability.
16
CONTACT SCULPTURE HOSPITALITY
T h ro u g h a m u t u a l p a s s i o n f o r t h e h o s p i t a l i t y i n d u s t r y , S c u l p t u r e
H o s p i t a l i t y w a s f o u n d e d i n 1 9 8 7 a s t h e p i o n e e r i n g c o m p a n y to d e v e l o p
b a r a n d r e s t a u r a n t i n v e n t o r y m a n a g e m e n t s o l u t i o n s . S c u l p tur e ’s
i n n o v a t i v e s o l u t i o n s h a v e r e v o l u t i o n i z e d i n v e n t o r y p r o c e s se s , h e l p i ng
bars and restaurants across the hospitality sector to become more
efficient and profitable.
S i n c e t h e c o m p a n y w a s f i r s t f o u n d e d , S c u l p t u r e H o s p i t a l i t y h a s e x p a nd e d
worldwide with more than 370 successful global franchisees who love
p r o v i d i n g e x p e r t i n v e n t o r y m a n a g e m e n t s o l u t i o n s t o b u s i n e s s e s i n th e
hospitality sector.
T o l e a r n m o r e , v i s i t S c u l p t u r e H o s p it a l it y : s c u l p t u r e h o s p i t a l i t y . c o m
SCULPTURE HOSPITALITY
Toronto Corporate Office
601-505 Consumers Road
Toronto, ON M2J 4V8
Canada
+1 888.238.4626