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You should know the following data points about your operations:

  • Food cost and margin for every single menu item – This gives you flexibility to change emphasis when the market price goes up. For example – when egg prices skyrocket, you know at what point you should focus your marketing on waffles instead.

  • Weekly spend on food, and waste. This helps you reduce inventory, dial in kitchen procedures and increase cash flow.

  • Total contract value and expiration for top 10 food contracts. Did you spend a lot of time negotiating with your chicken supplier, and then forget when the contract expired, only to have prices go up without noticing? It is really common to think you are getting the deal you negotiated, only to have it expire.

  • Total spend per year on your top 25 items. Typically your top 25 items represent 80% of your spend.  So if you keep track of these numbers, you are managing the majority of your costs.

  • Total spend per year on your top 10 food manufacturers. Know how big you are. When you understand your value to a food manufacturer, then you know your leverage.

  • Total % of Exclusive Brand products. Your distributor private labels lots of items. These items typically have more margin built in for the distributor.  Depending on your size, these prices are negotiable.

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