What is food cost?

Food cost is the percentage of total restaurant sales spent on food product.  It's easy to figure out:  net food purchases divided by net food sales to reveal a percentage of cost.  Average rule of thumb is to keep it around 30% or less.  There's several things you can do to improve this number.

Track your costs and inventory.

Look at your food costs every day and track them.  Any number of things can effect change in your costs and you need to stay on top of it to see what could be the culprit.  You could be selling too much of something and not enough of another.  If you have a strong month for a dish or special and change your inventory to compensate, you must monitor those sales to know how and when to adjust your orders.

Portion size is king.

Training your staff to weigh proteins and use portion bags can be crucial to your food costs.  If you teach them in the beginning to know a portion of salmon should be 4 ounces and no more, it will keep your costs and menu prices down.  This also helps with consistency in ordering and inventory.  Plus, if an employee is well trained from the beginning, they will pass these good habits along to other staff and will eventually be able to eyeball portions and know what is too much or too little.

No more waste.

Decreasing waste and getting creative with unused portions of protein and veg will help immensely.  Pork scraps can be boiled into side dishes to add flavor.  Vegetable greens can be braised and added as filler or offered as a side.  Also, back of house should not be afraid to 86 items from the menu if all of the necessary ingredients are used.  I've visited many lunch spots that serve dishes until they run out.  If your menu items are tasty enough, your customers will remember to show up early next time!

Food rotation.  Food rotation.  Food rotation.

I can't stress this enough.  Keeping a good rotation system in your kitchen and labeling things properly will keep you from having to throw things out unnecessarily.  Dot It offers 5 different label material types for every application in your freezer or kitchen.

Coordinate with FOH.

Advise your chefs and kitchen staff to be more interactive with servers.  Food costs will inevitably spike from time to time and telling your wait staff which low cost items to push will really help your bottom line.