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The average restaurant dedicates an estimated 30% of its budget to food. To profit from that budget, restaurant owners should make the most of the inventory they purchase, as well as their stock. Keeping track of your inventory requires a reliable process, the right tools, and knowledge of a few key calculations.
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Whether you're embarking on launching your first restaurant, opening a second (or third) location, or ready to turn your restaurant business into a franchise, this guide will help you make the smartest decisions possible for your business
In this ultimate guide, you will learn:
Proper inventory management starts with clear, concise, and planned-out recipes. It's essential to input accurate baseline data in your recipe management system to track stock moving in and out of your kitchen. Then, verify your current inventory levels and conduct stock counts if necessary. Equipped with this essential information, you can now implement tools to increase visibility into your stock. Let’s talk about some examples of tech tools that automate the inventory tracking process.
To manage inventory in Excel (or with a Google Sheet), owners or designated employees can count stock of items in the restaurant's inventory manually, jot them down on Excel printouts, and input the food stock count into a food inventory template on the computer in a back office. A basic restaurant inventory template includes a list of food items, their unit of measure, amount, unit price, and total cost. While the process can be slow and prone to error, it’s certainly an option for certain restaurant operations.
Point of sale (POS) systems combine ordering and payment processing with restaurant management software through virtual terminals via tablet, mobile, and even phone-based systems. They keep track of menu items at the checkout counter and link to actual inventory counts, so the stock updates with every purchase recorded.
Pro Tip: Check out this Menu Pricing Template to find out how to price your menu effectively.
Barcode scanners track incoming and outgoing stock easily. They're linked to inventory management software to coincide with a more extensive barcode system, in which each product has a specific barcode. Cashiers and servers can scan the barcode at checkout counters and tables, which updates changes in the stock count.
Any physical items necessary to provide services to your patrons, like food, ingredients, and other things such as cookware and employee uniforms, are included in restaurant inventory.
Examples of items you might find in a restaurant's inventory include
It's worth noting that successful restaurants typically spend around 28 to 35 percent of costs on food products. That percentage might be higher if the restaurant doesn't manage its inventory effectively or use its stock wisely. We recommend tracking inventory in separate categories such as food, beverages, and non-food items.
How often your restaurant takes inventory will depend on the type of establishment you're running. What's most important is that you're tracking inventory on a consistent schedule and counting and monitoring your inventory frequently to see how quickly you're burning through food and ingredients, a process known as cycle counting.
Restaurant owners should keep a daily record of available food products to check each item's physical condition and know how much to purchase from vendors and suppliers on ordering day.
Come up with a plan you can stick to for your inventory management. Experts recommend restaurants conduct their inventory processes before they open or immediately after they close—plan on taking inventory at the same time and day every week or month to encourage consistency. However, feel free to track different types of stock on different schedules—for example, you may track more perishable food every couple of days and track dry goods every week or every other week.
Once you've finalized your menu and inputted each recipe into your recipe database (if you have reliable restaurant management software, that is), it's time to set up your restaurant inventory list or spreadsheet.
Restaurant inventory list essentials include
Once you've created your spreadsheet, here is how to complete it to set up your final restaurant inventory list.
Pro Tip: Try this food costing calculator to figure out what menu items are most profitable (or which are duds). Conducting these calculations will help refine your menu and lead to greater profitability.
Modern restaurants require a system that tracks sales, takes inventory, and provides other useful features, like a recipe database and streamlined accounting. Restaurant owners require a solution that will help them do the important work of managing their business without worrying about crunching numbers, calculating formulas on paper, or creating manual inventory lists. Restaurant management software can help and can integrate with your existing setup.
If you're ready to get serious about your inventory management, look no further than MarketMan, a cloud-based inventory management and purchasing app geared toward streamlining accounting, procurement, and delivery. It's a tech-forward, lightweight solution for restaurants, hospitality groups, and franchisors to reduce costs, track financials, and drive revenue. With a solid platform on a unified cloud platform, restaurant owners can easily elevate their business by integrating MarketMan with their POS system, accounting software, commissary and franchise management, and more. Request a demo today.
