Recipe Costing
If you create value-added products on your farm, you want to understand your cost of production to ensure your products are priced accurately.
When calculating your costs, you need to track a lot of numbers:
- How many portions you’ll get out of each recipe.
- The cost of each ingredient, converting the purchase price to the amount used in your recipes
- The cost of packaging
- The time invested in producing and packaging your products.
The math isn’t hard, but it does take some work.
This recipe costing tool will help you calculate your costs easily, and make adjustments as the cost of your inputs changes.
The template is bundled with a one-hour coaching call. Because of all the nuances of the process, and the idiosyncrasies of each business, we want to make sure you can use this tool effectively and efficiently.
Inventory Management
Tracking your inventory is one of the best ways to manage the day-to-day operations of your restaurant/café. By taking a monthly count, you can manage:
- Food Costs
- Waste and Potential Theft
- Turnover
At a very high level, you can track how much you spend on food relative to your revenue. Most restaurants will set a benchmark of 20% -40%. If your food cost goes up drastically, the cause is one of three things:
- You are not portioning your food properly or too much is being thrown away
- You have a problem with theft
- Your costs have increased, but you haven’t raised your prices to reflect that change
On a more micro level, you can the cost out individual recipes. By knowing the cost of a dozen eggs, a pound of butter and a pound of cheese, for example, you know how much a single egg, ounce of cheese and butter cost… and you can then decide how much to charge for a plate of scrambled eggs.
You can also keep track of inventory that needs to be moved quickly or may have been forgotten about.
“The process of food costing was tremendously helpful. Knowing all the costs, we can make the right decisions and charge the right amount for our products. I feel so much better at the end of the day.” Natalie McEachern, Glutenus Minimus
How to Track Inventory:
Create a spreadsheet and list each item that you carry. List the unit price and total on hand. Each month, count how many units you have on hand. If you want to be fancy, you can also convert the case price into the portion size so that you can efficiently cost out your recipes.
You can also download our template. With this template you will be able to:
- Easily track the value of your inventory
- Track the portion cost of each ingredient
- Track the food cost of individual recipes
To learn more about inventory management, read our article here: https://www.juliashanks.com/inventory-management/