Debunking costly inventory myths
I know what you’re thinking—you know you need to do inventory at your restaurant.
You’ve seen the stats. You’ve read some of the articles. You’ve heard the consultants preach about how to take inventory.
But do you know why taking inventory is important? In all the noise about how to do this back-of-house task, there aren’t a lot of explanations leaving room for myths to float around about inventory.
But the fact is your inventory represents a full third of your budget.
What you have on hand from food to cleaning supplies to the staff’s aprons represents the ebb and flow of money from your restaurant. Ignoring inventory and holding onto industry myths means you’re wasting your time and money.
Because taking inventory is such a critical process in making sure your restaurant succeeds, we’re debunking the most dangerous myths about restaurant inventory.
Myth #1: You can take inventory when it’s convenient
Even if you know inventory should be regularly scheduled, you’re probably not adding it to your staff’s chore chart. It’s one of those things you do when you have a slow night, right? It’s just too long, boring, and painful to be one of the things you add high up on your to-do list.
Here’s the uncomfortable truth, though: Food prices have gone up 25 percent in the past five years, but even worse, they’re fluctuating on a daily basis.
Ordering too much of one item or letting it spoil because of overstocking means money down the drain that you could be spending on better quality food, paying your staff more, or renovating the dining room.
Stop believing the myth that you can do inventory when it’s convenient, when you have time, or every once in a while.
Unfortunately, those excuses aren’t good enough to keep your restaurant in business. You can be one of the 75 percent of restaurants who struggle with making profits because of food costs, or you can be one of the 25 percent of restaurants who are successful because they invest in taking inventory regularly.
In order to be effective at all, inventory has to be scheduled once a week on the same day every week before your orders are dropped off. This will make certain you always get a consistent count from week to week.
Myth #2: It takes too long to train staff
Let’s shoot this myth down right now. You do not have to train everyone on your team to take inventory.
In fact, the more people allowed to do inventory, the more chance of error, waste, theft, and overstocking. It’s just too hard to make sure everyone on your team understands the exact process and follows it every time.
Instead, train two to four team members on the inventory process. Not only can two people catch more mistakes than one, having the same people take inventory together encourages consistency, and they learn to get the job done faster over time and save labor costs. Additionally, there’s less of a chance someone is going to steal food with two people doing BOH tasks together.
Myth #3: Eyeballing it is fine
It’s no big deal to just walk through your kitchen and take a mental calculation of how much food you have, right? As a seasoned restaurant professional, you can account for general fluctuations in inventory at a glance. It’s not really a spectacular or complicated process.
But it’s not an accurate process, either. Relying on your intuition doesn’t show you exactly how your numbers have changed from week to week, and that’s the exact data you need to make decisions about your money.
For example, you may see as soon as you walk into the cooler you have a surplus of chicken wings, but you can’t tell exactly how many extra. Is it a day's worth or a week’s worth? If you run a special to use up the wings before they go bad, you wouldn’t know whether to serve five or 15 per platter.
In this situation you’d more than likely guestimate the price you attach to your chicken wing special rather than take the time to look up the price per unit.
The idea that inventory can be once-overed by a chef or manager is a myth. In reality, you won’t know what you spent on food, how much went to waste, or why.
Myth #4: It just takes too long to do
Inventory is so manual and takes hours to complete. It feels like a never-ending task.
Usually you trek around your kitchen, pantry, and cooler to take counts. Then it’s a matter of locating the last prices you paid and typing all that information into a spreadsheet or accounting system. Talk about tedious.
Because inventory is so boring and takes so long, your staff (or even you!) finds shortcuts and cuts corners. And because of this, not only are you wasting time, you’re also wasting money not getting a good count in.
Believe it or not, this is a myth. Inventory doesn’t have to be such a time suck. There’s a better way, a much faster way, to take inventory. It will keep your staff on their toes, and it’s all online. This game-changer is inventory software.
I bet I know what you’re thinking…
Myth #5: Inventory software costs a lot & takes a long time to set up
If you are like most restaurant operators, you’d rather deal with food waste than use archaic software that costs $10 thousand to $20 thousand a year takes months to set up and get your staff trained on. And up until now, that’s the only choice you had when it came to using inventory software.
But taking inventory is just too important and too complicated for a simple paper checklist tacked to a clipboard and accompanied by a spreadsheet of numbers.
This is where modern technology steps in with apps and software that work on your smart phone and do all the tedious work for you. We’re talking advanced reporting in the palm of your hand, price lookups, cost of goods sold (COGS), usage by day, days on hand reports, and reports by category about your COGS.
In five minutes, you can see what you have on hand and how much it costs so you can make a decision about how many of those extra chicken wings to serve on your special and at what price.
Who said technology is too expensive and hard to use? It’s definitely a myth. You’ve got options.
The Reality of Inventory
A good part of your operational costs are tied up in the items you buy, so effective inventory management is fundamental to your restaurant making it or not.
This one process minimizes food waste, determines what food and supplies you order, and is one of the biggest ways you can cut costs. Managing inventory is a way to maximize every dollar you spend and save in an industry where prices go up and down every day.
How you approach taking inventory at your restaurant, whether you face reality or believe the myths, is critical to the success of your business.