HOW PROPERLY COSTED RECIPES ARE WORTH THE EFFORT
Determining the proper cost of each item on each of your menus can be a time-consuming process, but the effort will pay off in the end. Not only will you be aware of your costs, and be able to apply proper selling prices to each item and generate proper revenues, but you can also use this information in many other areas of your business.
Above is a diagram of how properly costed recipes impact many other areas of your business.
When you have properly costed recipes (whether they are food or beverage recipes), you can take this information and use it in a number of other ways:
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theoretical costs – by multiplying your sales number of each item by the portion cost of each item, you can determine your theoretical costs, and be sure that your actual costs are in line with what they should be. You can proactively fix problems when you know what your costs should be.
Doing a comprehensive menu costing may seem like a daunting task to some establishment owners, but not doing them can be a serious mistake.
Take the time to properly cost your food and beverage menus, or outsource the project to a qualified professional. It will go a long way in making you aware of your costs, and make you able to use them in some of the areas above to be sure that you are maximizing your bottom line.
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