The best way to regularly determine the value of your business is through periodic inventory counts and cost analysis. Therefore, counting inventory and adding up costs are essential tasks of operating a business. Determining the values and costs of running your business yields metrics that tell you where you are in relation to where you should be. They give you a target that forms the basis of your bottom line. Costs are quantified as a percentage of revenue, and total inventory tells you where your costs should be.
There is no avoiding the need to know precisely where your value is and what you are spending your capital on. Regular inventories tell you how and when to purchase and cut costs. They are the appropriate response to the dynamic nature of this business. They turn the chaotic into the controllable. Inventory is typically counted across food and beverage categories and includes nearly everything of value from the front door to the back.
Most restaurants count inventory on a monthly basis, but weekly counts provide greater accuracy and security in every aspect. There are many reasons restaurants count once a month. First of all, there is a lot to count. Even in small restaurants, counting inventory is time-consuming and requires coordination between the kitchen, the bar and sometimes a wine staff. Also, itís important to have the same people counting the same inventory each week, so that they are familiar with counting sheets and inventory locations. These tasks donít usually fit into the day-to-day operations of running a restaurant.
However, the value of counting inventory every week is too great to be neglected. The biggest reason to count once a week is to pinpoint waste. Waste happens in every kitchen and in nearly every bar. The larger the kitchen, the more likely waste is to occur. Many kitchens develop waste sheets on which anything that is thrown out or misused can be documented. However, not every prep or line cook remembers to use a waste sheet. By counting once a week, a chef and an operator can stay on top of waste and quickly become aware if it is a regular occurrence.
Weekly counts also shed light on inventory walk-outs. Iíve never worked in a restaurant that didnít have an occasional misplacement or theft. Unfortunately, inventory can grow legs, even when it is carefully managed and put away. This is certainly true for upscale restaurants stocked with expensive wines, steaks or seafood. However, it also true in any case in which many employees are surrounded by valuable goods.
But the most important reason to count every week is to get arrive at frequent report cards for your business. Why wait till the end of the month or quarter to really know how youíre doing? Go the extra mile to get the full picture. As mentioned earlier, when inventory is counted once a week and compared to costs, you will always know when your numbers arenít quite where they should be. For example, if your bar costs are high and your inventory is stagnating, you might have a bartender overpouring your cocktails. Furthermore, if you methodically break your inventory across food categories, such as salad, dessert, proteins, plate/table, etc., the numbers you arrive at will tell you everything you need to know about the nuts and bolts of operating your restaurant
It is worth remembering that counting goes by quickly when it is done every week at the same time by the same people. Monthly counting can be an ordeal. From my experience, counting once a month typically involves staying late after closing, hunkering down and rolling up the sleeves. Itís easy to forget where items are stocked and that separate, secret location where the extras are. Counting that is done once a week by a group of managers or employees each taking on a category or two gets knocked out quickly. It can dovetail into the course of a regular workday. In the end, there are too many advantages in most cases to neglect weekly counting.