Restaurants are serving up amazing meals in 2022 with one central goal in mind – profitability. Here are some steps owners and operators can take to balance food costs and stay in the black.

Back to Basics

Before you can hope to be profitable, even in the best of times, it’s important to have a clear understanding of how to get there. For that reason, it’s important to understand what makes up your Gross Profit Margin. Gross Profit Margin is the percentage of revenue left over after you pay expenses – food & beverage costs, wages, and overhead. As you revamp menus and look for ways to save and make money in the new year, remember that your Food Cost Percentage (FCP) should be around 25-30% and your labor costs should be another 30%. After overhead charges, ideally, you’ll be left with a net profit of around 35-40%.

It’s a good idea to price out your full menu from scratch to assess how close you are getting to a 30% FCP. Not every menu item needs to have a 30% FCP, but the menu as a whole should balance out when you average the FCP of each dish.

Reduce Waste

With margins tighter than ever, there’s no room for food waste. Implement an inventory management system that allows you to know exactly how much product you have to work with, and make sure your entire staff are well trained on FIFO (first in, first out) and other proper storage protocols, including labeling and temperature control. Look for creative ways to cross-utilize ingredients as well as ways to use the entire ingredient, improving the yield (and thus profit) of each item. And pay attention to prep. Chefs should prep only what they need for service to avoid throwing away food at the end of each shift.

Trim Your Menu

Once you’ve taken a look at the numbers, you’ll probably notice areas where you are paying too much for items that don’t bring in enough revenue. Menu efficiency can be an excellent way to focus on high profit margin items while lowering your labor costs. As you cull your menu items, consider raising prices where necessary, and look for other ingredients that could bring costs down on menu items that are customer favorites so that you can continue to offer them.

Standardize Recipes and Portion Sizes

As you reevaluate your menu, you have the opportunity to standardize your recipes and your portion sizes. This is one of the techniques that chain restaurants use to stay profitable, and it’s extremely effective. Work with your BOH staff to make sure all cooks are trained on the standardized recipes and use portion cups and scoops to take the guesswork out of portioning.

Communicate with Your Guests

The new year presents a good opportunity to communicate and connect with your audience to let them know a bit of what’s going on behind the scenes. Especially if you are changing your menu or hours of operation, consider creating a statement to share with your guests (via newsletter and social media) about those changes. Stick to the facts and try to avoid placing blame; just let people know what’s going on in clear, honest language (and make sure to have someone edit for typos and errors before you send it out into the world).