To all those who didn’t already know: 60% of all restaurants shut down within the first year of operations, and up to 80% restaurants close their shops in the first five years as they lack inventory managment.Running a restaurant business is a herculean task indeed, no matter how lucrative the restaurant business seems from afar
Read more about the common mistakes fits time-restaurateurs make here. We don’t mean to discourage aspiring restaurateurs out there, or to lower the morale of the current ones, but we do believe that prevention is better than cure.
So, here we have listed, in no particular order, the top Five Inventory management mistakes to avoid at your restaurant:
Failure in depicting demand trend
Restaurant stays profitable and cut inventory wastage is identifying demand trends. Properly assessing demand is crucial. Continuously investment in resources to identify current wants and needs of the customer. Not doing this or failing to do this leaves you with a non-selling stock or run out of stock which is being demanded. Consequently, recovering only a portion of your investments, uncovering the purchases made and adding up on space rents, handling costs, etc.
An in-depth trend analysis can also help your restaurant businesses anticipate upcoming trends even before their competitors. Failure at your end to figure it out paves the way for the competitors to jump in and grab the opportunity.
In order to maintain a healthy inventory, Tracking and reporting is one of the most important aspects. Poor reporting often results in over-consumption and wastage. Ensure that the Inventory Reports are updated after each Purchase Order and daily reports of the Stock Consumption and Ideal Stock are maintained. It is important to measure the daily Variance. Variance is the difference between Ideal Stock and Physical Stock. A Variance of 3-5% is acceptable and is caused by wastage and food handling.
One of the biggest errors that restaurateurs often make while running their food business is not paying proper attention to their inventory management. Overcoming all these barriers, a strong stock and inventory management can revolutionize your restaurant operations and yield higher profits.
No Recipe Management
No recipe management or Lack of recipe management often results in a mismatch of the stock. Food and Beverage managers, in most cases, conclude the discrepancy in stock and thefts, which are usually a result of over portioning or food wastage. Billing and Stock, inventory management can help maintain your Food Costs. Standard Recipes consist not only of the procedure of the dish but also the exact amount each item is required in the preparation of the dish.
The Recipe Management module automatically calculates the amount of stock consumed in the preparation of a dish as the restaurant billing software integrated with the Point of Sales software. This helps in maintaining a clear track of the items consumed based on the items ordered.
Having More Inventory Than You Need
It is easy to spend too much on inventory management, which can eat up working capital and erode profits, afraid of being caught short. Warehousing isn’t free, of course, and inventory that sits on a shelf is subject to damage, depreciation, and even obsolescence.
There is a fine line between having too little inventory and storing too much, you should avoid overstocking. It may not be a big deal at first, but this is an expensive mistake that will catch up with you. Improving your forecasting efforts is the best way to improve accuracy in this area.
No Stock Forecasting
Inaccurate forecast demand or absence of forecast can make even the best of businesses to lose on their revenues. If you don’t want to overstock the inventory and risk them getting wasted, or understock the inventory and running out of items to serve your customers then forecasting is necessary for a restaurant business.
Choose a POS Integrated inventory management System that gives you an estimate of the amount of each item that you would need in a week or a month based on the sales report and order history. You can also set re-order levels for each item, that sends you automatic alerts and reminders when a particular stock item is about to finish.
Contact cashofy Inventory Today
If you are having a restaurant with multiple outlets in industry as a food chain, then cashofy is the right place as it is a comprehensive, prepackaged all-in-one solution designed for all types of businesses.
Cashofy systems enable businesses to have greater control and visibility into their business processes. Access to this key information allows them to make critical business decisions and to maintain a competitive edge in their industry.