What Should Your Food Cost Be?

A cost control problem is when there is an unacceptable difference between the ideal and actual cost for a given period. A 2 percent varience for a restaurant that does $30,000 a week in food sales amounts to $600 a week. That's more than $30,000 a year. However, if the targeted cost is inaccurate, then you'll be left scratching your head looking for a cost problem that doesn't exist. Below are some tips to determine your ideal cost.

• Accurately cost out each menu item
• Make sure each menu item has its own POS key so you can track the unit sales of each item.
• Create a spreadsheet that calculates the cost of each menu item times the number of items sold from the POS report to give an "ideal cost."
• Compare the ideal cost to the actual cost calculation from your P&L.
• For many operators who compare their ideal versus actual food cost, a varience of more than 1 percent of sales indicates a food cost problem.

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