2009 January: Value It Out






2009 January: Cost It Out

Within the final month, I’ve introduced workshops and seminars to a number of thousand owner-operators in eight cities. The overriding theme of the seminars is getting again to restaurant enterprise fundamentals. In each single seminar, I’ve requested the attendees to reply the next query: “How a lot does it price you to make a 14-inch cheese, pepperoni, mushroom and ham pizza, together with the field?”


In a typical room of 200 individuals or so, solely two or three will increase their palms and announce the reply. That is scary to me. I notice various are shy and could also be embarrassed answering the query in a public group setting. On the identical time, although, I misplaced a lot of the eye contact within the rooms. Of us had been praying that I wouldn’t name on them to reply the query.

Now it’s your flip. I’m addressing that equivalent basic query to Pizza At this time readers. Write down, proper now, how a lot it prices you to make that pie.

Don’t know the reply? You then’ve failed the take a look at.

If you’re unsure of your actual meals price in share, in addition to {dollars}, how will you worth your menu? A method is to assemble up all your opponents’ menus and unfold them out in your kitchen desk and take a mean. You don’t need to be the best or the bottom. However while you do this, you might be assuming that the opposite guys have achieved the mathematics and have a deal with on true prices. I wouldn’t guess the store on it.

Computing the price of a pizza isn’t a straightforward job, particularly when the price of the uncooked components is consistently altering. it’s a must to do it. Your whole future is on the road. It’s time to cease the guessing. Let me describe how it’s achieved.

First, you will want to put aside a number of blocks of uninterrupted time. I like to recommend three classes of two hours. Session one might be dedicated to assembling your final two months’ meals invoices. You’ll additionally must weigh out your topping weights for each pizza, salad, appetizer and some other entree in your menu in ounces (grams). I do that job with a digital digital portion scale that has a tare (zero reset) perform. I first write down my doughball weight, then transfer on to sauce, cheese and different components as I construct the precise pizza on the size. Through the use of a corrugated pizza circle as an alternative of a dough, I can recycle the toppings after each weight and never waste them. I name this info the Weighout Sheet.

Out of your invoices, you’ll want to find out worth per ounce on every ingredient. If you buy your cheese by the pound you’ll must divide the worth per pound by 16 to get worth per ounce. In case you purchase your onions by the 50-pound bag you’ll must compute the edible yield ounces (EYO) per bag. You’ll have in mind what number of ounces per bag or field of onions or peppers are trim and waste. Do the identical on components which might be packed in one-gallon jars and quantity ten cans, like ripe olives and banana peppers. Drain off all the liquid and weigh the EYO of all of those toppings. This could do it for Session I.

Upon getting achieved the mathematics on the weights and value per ounce in your pizza in addition to salads, sandwiches and different entrees you’ll want to start out doing a little addition. Welcome to Session II. For pizza containers, packaging and different issues like sheeted dough and disposables, you’ll want to present the ingredient a unit/ every price. That is proper about the place I personally dropped the ball.

Thus far I acquired the mathematics proper, however discovering a spot to assemble all the information is an issue. At first, I compelled myself to make use of the large inexperienced accountant’s columnar work sheet paper. Printing tiny and writing all of these numbers in these itty-bitty containers was virtually an excessive amount of for this ADD pizzaman. After I purchased my first pc, I transferred all the knowledge to a spreadsheet program like Excel. This was a large leap from pencil and paper till I inevitably entered a worth in a mistaken cell and crashed the sheet. However since I spent hours and hours doing the algebra for the cells, I often may discover out the place I went mistaken and repair it. I used this method for a few years. I searched the world over for a greater means and located none.

After you’ve created and formatted your worksheets now you can begin seeing how a lot it prices to assemble a pizza. You’ll add the sum of the dough, sauce, cheese, pepperoni, mushroom, ham and pizza field. Divide this whole into the menu promoting worth and also you’ll lastly know the true superb foodcost for that pie. This may do it for Session II.

Session III is the OMG session. On paper, you ought to be operating, hypothetically, a 30 p.c (or much less) meals price. In actuality, your financials are exhibiting a 37 p.c meals price. How can this be? The place is the lacking seven p.c? That’s some huge cash. It’s very often the distinction between success and failure, actual revenue or dwelling on bank card debt. The important thing right here is replicating every pizza precisely as you probably did in session one. I’m speaking actual portion management by utilizing scales, spoodles or cups to dole out each ingredient, each time. If you’re not weighing it, you might be winging it. Each ounce counts. Particularly in lately of rollercoaster pricing and escalating bills.

The distinction between superb and precise foodcost is the sum of the next: non-food gadgets in your weekly invoices like hand towels, rubbish luggage, cleaning soap, and many others. These purchases needs to be labeled as provides and never charged to meals price. Most distributors get away non-food gadgets on invoices. I deliberately added in the price of a pizza field and advocate it if an operation’s product sales exceed 50 p.c in carryout and supply.

The following space to be involved about is worker waste. This may be vital. I allowed my managers 1.5 p.c right here.

The ultimate darkish space is theft or under-ringed/reported gross sales. Each time I go to a pizzeria shopper and the meals price is means out of whack, I start scrutinizing these areas instantly. You’d be clever to start doing the identical in the present day. In any other case, you can be leaving 1000’s of revenue {dollars} behind.

Now, again to the unique query. How a lot does it take you to make that pizza? In case you don’t know, get began discovering out proper now. ?

Huge Dave Ostrander owned a extremely profitable impartial pizzeria earlier than changing into a marketing consultant, speaker and internationally sought-after coach. He’s a month-to-month contributor to Pizza At this time and leads seminars on operational subjects for the household of Pizza Expo tradeshows.

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