8 Cues on Food Cost and Eliminating Food Waste
Mike Mills is affectionately known as "The Legend" in BBQ. Mills was one of the first original stars of the competition BBQ circuit.  With his ongoing mentorship, he has passed on his knowledge to many BBQ competitors, who now enjoy a great living from barbecue. From his 30 years of experience of running a successful restaurant, 17th Street BBQ, Mike learned all his lessons from the school of hard knocks. Mike wants to provide a short cut for restaurant owners in hopes they will learn from his mistakes.   

1. Avoid Underpricing Your Product

Everyone has a different way of calculating their margins and profit line. If you ask 100 people how to calculate your margin, you will get 100 different answers. If you are just starting a restaurant, the most frequent novice mistake is not charging enough for your food.


2. Take Care of Your Back Door
A steady flow of customers can make you think you are doing well, but once it slows down, your cash flow suffers. You have to turn enough volume and make a profit, so you can take care of operating expenses when things slow down. You can be slightly delusional and happy with a steady flow of customers, and not understand your bottom line or exactly how much money you're really making. You must plan ahead for the worst case scenario. 


3. Check Your Numbers Daily
If you are doing it right, you will know how much you are making every day. There are so many computer programs that provide a breakdown of income by the hour, the cost of labor, food cost, etc. I'm old-fashioned, so I calculate everything by hand. The way of the world now allows for no excuses. You should always know where you stand financially.


4. Buy One Food Product for One Use
We bolster our menu with featured items that are limited time, one-use items. These short-term features help drive sales, but reduce overall food waste.

5. Majority Rules, So Cut Out The Less Popular Menu Items 
At one time, we had a menu with 26 appetizers, and too much food waste as a result. A smaller menu with limited menu items keeps the food fresh and eliminates waste, ultimately saving you money. There was some customer backlash when we decided to cut items.  Some of our regulars only came into the restaurant for that one item. I had a ten-year-old boy furious with us because we cut the honey butter and hot rolls from the menu. He boycotted the restaurant for several months. Our decision to cut the rolls saved us a thousand dollars a month. And eventually, the boy found another menu item to love. One customer's side item preference doesn't justify going into debt. Time and labor also went into creating those uneaten side items, and that just adds to the overall cost. 

6. Good Managers Are Hard to Find
Most managers are not personally invested in the well-being of your restaurant. Managers do not want to report wasted food. As an owner, it matters when the money is coming out of your pocket. As an owner, you have to take the initiative to monitor some things yourself.

7. Mind the Multiples & Put Your Foot Down on Waste.
You buy things in multiples to get the best price. Calculate everything by multiples to understand overall cost. One year we spent a total of $34,000.00 on latex gloves. The number one cause of food-borne illness is people's hands in the kitchen. I calculated we were using one pair of gloves every 13 seconds at 7 cents a glove. As the owner, you need to have a meeting with line cooks to start a new system that minimizes waste. There are workarounds and revisions you can make to your restaurant practices to save you money.


Factor in Unforeseen Costs 
Employees working in a hot kitchen consume lots of water or soda. You need to factor in the unexpected cost of employee drinks. Our employees liked to use the large 24 oz. cups. Once the ice melts and waters down the soda, they dump out the drink and opt for a fresh refill. Then throughout the day, cooks lose track of which cup is theirs, and it becomes easier to throw away the questionable cups. It may sound cheap, but these things start to add up. 


For Example: 

1 Cook throws away 4 cups in a day.

Cup costs = 40 cents 

40 cents X 4 cups = $1.60 

then multiple it by 365 days = $584.00

$584.00 X 10 line cooks =$5,840.00. 


Now remember, we didn't even factor in the cost of soda refills, either. 

There are subtle employee work habits that can cost you. We have more than a dozen washable drinking cups in the kitchen, but employees were using the styrofoam cups as an easy throwaway option. Every hardworking employee deserves a cold drink at work. At the risk of sounding cheap, I want restaurant owners to be mindful of waste and employee work habits, calculate accordingly, and revise when necessary. Carelessness can run rampant in the restaurant industry, and left unchecked, can be the difference between success and failure.


8. Mind your Measuring 
Reducing cost is taking a careful look at your portion control. How much of each menu item is plated?


9. You want something bad enough, you earn it. 
I lived in a rural area growing up, and we didn't have a lot of money. I was raised to have the mentality that if you want something bad enough you earn it. Think carefully before going into debt for shiny new equipment and items. Shop around. There's a tremendous amount of high-quality used restaurant equipment out there. 

10. NBBQA Mentorship
One of our OnCue Consulting students took our Whole Hog Extravaganza class, and he wanted to cook a whole hog for his son's 21st birthday. He called me after the class, and I coached him through the cook on the phone. I told him I didn't care if he called at 3 a.m., I'd be happy to help him. I knew once he got it right, he would be an expert. The hog turned out great and he was so proud. Now he has the confidence to do it again and teach others. It's all about the community and giving back to the organization  and helping one another.


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