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Showing posts from May, 2009

Cost-Cutting Measures Are Still More Profitable Than Advertisements

It is undeniable that successful companies are those that are able to maintain at least 28-35% of their food costs, on the average, where at least 50% to 70% of their total sales are spent on food inventories, consumption as well as labor costs. Because of the impact that food costs has on the overall profitability of a food service company, one must be able to manage it carefully in order to increase profits by avoiding losses.

You are probably thinking: “So how can we control our food cost?” There are many ways to do so but two of the most effective ways are to control your inventory and look into your menu pricing strategy. You may have received a good deal from your suppliers by ordering in bulk, however, think about this: you may be tying in your cash flow or store room for paying and stacking an inventory that may end up just sitting in your stock room for a long period of time. Or inversely, you may have also experienced scrambling and pulling your hair out as you scramble for t…