Within the final month, I’ve offered workshops and seminars to a number of thousand owner-operators in eight cities. The overriding theme of the seminars is getting again to restaurant enterprise fundamentals. In each single seminar, I’ve requested the attendees to reply the next query: “How a lot does it value you to make a 14-inch cheese, pepperoni, mushroom and ham pizza, together with the field?”
In a typical room of 200 individuals or so, solely two or three will elevate their arms and announce the reply. That is scary to me. I notice various are shy and could also be embarrassed answering the query in a public group setting. On the identical time, although, I misplaced many of the eye contact within the rooms. People have been praying that I wouldn’t name on them to reply the query.
Now it’s your flip. I’m addressing that an identical basic query to Pizza Immediately readers. Write down, proper now, how a lot it prices you to make that pie.
Don’t know the reply? You then’ve failed the take a look at.
If you’re undecided of your actual meals value in proportion, in addition to {dollars}, how are you going to value your menu? A technique is to collect up your entire rivals’ menus and unfold them out in your kitchen desk and take a mean. You don’t need to be the very best or the bottom. However while you do this, you’re assuming that the opposite guys have accomplished the maths and have a deal with on true prices. I wouldn’t wager the store on it.
Computing the price of a pizza shouldn’t be a simple activity, particularly when the price of the uncooked elements is continually altering. You recognize it’s a must to do it. Your complete future is on the road. It’s time to cease the guessing. Let me describe how it’s accomplished.
First, you will want to put aside a number of blocks of uninterrupted time. I like to recommend three classes of two hours. Session one will likely be dedicated to assembling your final two months’ meals invoices. You’ll additionally have to weigh out your topping weights for each pizza, salad, appetizer and some other entree in your menu in ounces (grams). I do that activity with a digital digital portion scale that has a tare (zero reset) perform. I first write down my doughball weight, then transfer on to sauce, cheese and different elements as I construct the precise pizza on the size. Through the use of a corrugated pizza circle as an alternative of a dough, I can recycle the toppings after each weight and never waste them. I name this info the Weighout Sheet.
Out of your invoices, you’ll want to find out value per ounce on every ingredient. If you are going to buy your cheese by the pound you’ll have to divide the worth per pound by 16 to get value per ounce. If you happen to purchase your onions by the 50-pound bag you’ll have to compute the edible yield ounces (EYO) per bag. You’ll bear in mind what number of ounces per bag or field of onions or peppers are trim and waste. Do the identical on elements which are packed in one-gallon jars and quantity ten cans, like ripe olives and banana peppers. Drain off the entire liquid and weigh the EYO of all of those toppings. This could do it for Session I.
After you have accomplished the maths on the weights and value per ounce in your pizza in addition to salads, sandwiches and different entrees you’ll want to begin performing some addition. Welcome to Session II. For pizza bins, packaging and different issues like sheeted dough and disposables, you’ll want to present the ingredient a unit/ every value. That is proper about the place I personally dropped the ball.
Thus far I received the maths proper, however discovering a spot to assemble the entire data is an issue. At first, I compelled myself to make use of the massive inexperienced accountant’s columnar work sheet paper. Printing tiny and writing all of these numbers in these itty-bitty bins was virtually an excessive amount of for this ADD pizzaman. After I purchased my first pc, I transferred the entire information to a spreadsheet program like Excel. This was a large leap from pencil and paper till I inevitably entered a price in a improper cell and crashed the sheet. However since I spent hours and hours doing the algebra for the cells, I often might discover out the place I went improper and repair it. I used this technique for a few years. I searched the world over for a greater approach and located none.
After you’ve created and formatted your worksheets now you can begin seeing how a lot it prices to assemble a pizza. You’ll add the sum of the dough, sauce, cheese, pepperoni, mushroom, ham and pizza field. Divide this whole into the menu promoting value and also you’ll lastly know the true splendid foodcost for that pie. It will do it for Session II.
Session III is the OMG session. On paper, you need to be working, hypothetically, a 30 p.c (or much less) meals value. In actuality, your financials are displaying a 37 p.c meals value. How can this be? The place is the lacking seven p.c? That’s some huge cash. It’s very often the distinction between success and failure, actual earnings or dwelling on bank card debt. The important thing right here is replicating every pizza precisely as you probably did in session one. I’m speaking actual portion management by utilizing scales, spoodles or cups to dole out each ingredient, each time. If you’re not weighing it, you’re winging it. Each ounce counts. Particularly in nowadays of rollercoaster pricing and escalating bills.
The distinction between splendid and precise foodcost is the sum of the next: non-food gadgets in your weekly invoices like hand towels, rubbish luggage, cleaning soap, and so on. These purchases ought to be categorised as provides and never charged to meals value. Most distributors escape non-food gadgets on invoices. I deliberately added in the price of a pizza field and advocate it if an operation’s product sales exceed 50 p.c in carryout and supply.
The subsequent space to be involved about is worker waste. This may be important. I allowed my managers 1.5 p.c right here.
The ultimate darkish space is theft or under-ringed/reported gross sales. Each time I go to a pizzeria shopper and the meals value is approach out of whack, I start scrutinizing these areas straight away. You’d be clever to start doing the identical at this time. In any other case, you may be leaving 1000’s of revenue {dollars} behind.
Now, again to the unique query. How a lot does it take you to make that pizza? If you happen to don’t know, get began discovering out proper now. ?
Huge Dave Ostrander owned a extremely profitable unbiased pizzeria earlier than changing into a guide, speaker and internationally sought-after coach. He’s a month-to-month contributor to Pizza Immediately and leads seminars on operational subjects for the household of Pizza Expo tradeshows.
