Many factors influence the cost of pizza at any restaurant. The challenges of maintaining a healthy profit margin also continue to grow. It’s not the rising overhead cost, the labor shortage, or shifting consumer habits.
Restaurant owners cannot control specific trends and fixed costs. This highlights the importance of focusing their efforts on what they can improve. Management of ingredient costs is essential regardless of the restaurant’s type.
In any restaurant, profit and cost must be balanced. It is essential to have enough ingredients to satisfy patrons’ expectations. However, avoiding the surefire profit-busters such as small batches, specialty ingredients, or food wastage would be best.
You will absorb some ingredients to create an unforgettable experience for your customers. But how can you figure out the right amount to avoid food costs reducing profits?
Benchmarking
Comparing your business operations with similar restaurant operations can help to identify performance metrics and best practices. Find ways to network with other operators or contact non-competing peers for ideas and collaboration. It is possible to save money by learning from experts in the restaurant industry.
For example, you can outline ingredient costs and order needs every week. This can give you a realistic picture of the following:
- Inventory of ingredients and costs
- Cost-control issues that could arise
- Appropriate pizza pricing
- Profitability
Pizza Ingredient Cost Projections
Failing to match benchmarking with your business needs can quickly impact restaurant profitability. While customer loyalty programs, online ordering, and revamping menu items can help increase sales, they will only improve profit margins.
A few best practices for inventory control can be used to reduce the cost of goods and prevent missteps.
Don’t overbuy
Food soiled is money wasted. You can double-check and refine your projected numbers by quickly estimating the table turnover rate for an entire evening. If your restaurant has 100 seats and is open for six hours, you can turn each table three times, meaning you’ll be able to serve 300 people at once.
You won’t reach capacity every night. You can adjust your ingredient order to accommodate these busy days. This is an excellent way to understand better how much dough you need and how many crusts you should prepare.
Add 10% to the average dough amount for each day to account for unanticipated traffic.
Request supplier quotes
Getting a few quotes from distributors and suppliers throughout the year is a good idea. This will give you more options and ensure you get the best price. Take a look at the volume. Is a vendor offering a lower threshold to get more significant discounts? This simple thing could make the difference between great and terrible profitability.
Compare actual and ideal food prices.
The actual food cost (how much you pay for ingredients) often differs from the ideal food cost (what your components should cost). This is because measuring all food and accounting for all waste is impossible. The rising costs indicate that your sales mix includes high-food cost items that drive greater profitability, and your projections are correct. If the reverse is true, it could suggest that there are underlying issues such as theft, poor staff training, or improper ingredient portioning.
Calculate your profitability
To determine if and how much profit is being made, compare ingredient costs with total sales. It is an excellent practice to keep an inventory of essential ingredients such as dough/crust, pepperoni, and cheese every week and for all other monthly ingredients and supplies. Although it can be tedious, taking inventory is essential to keep your ingredient costs down and your overall profits in check.
Be aware of common misconceptions.
Although many restaurant owners and chefs hold deep beliefs about ingredients, some may need more information. Sometimes, fresh is the best. It is worth considering whether frozen dough balls or par-baked pizza crusts are better options if hidden costs to make homemade pizza dough daily are taking away profits through labor costs, inventory control, and spoilage.
A common misconception is that these options are more expensive or must meet the same quality or clean-label new standards. Look for an ingredient supplier that can also serve as a strategic partner. They can help you determine if this cost-saving strategy is right for you.
Our interactive cost calculator will help you better understand the impact of making your dough on costs and profitability. To access the calculator, click on the button below. Feel free to contact us with any questions.