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Food Cost Smarter. Not Harder.

Using reciProfity will help you improve your restaurant education and food IQ instantly, but no software can replace your good ol’ brain power when it comes to thinking on your feet and overcoming everyday challenges.

  1. How do I make food costing work for me
  2. How do I make my kitchen staff understand its importance
  3. How do I deal with kitchen staff issues
  4. How do I look for price creep

In an effort to make our customers some of the smartest businesses out there use this blog to keep your cranium as sharp as the knives in your kitchen. You can find a lot of the same how to’s on other websites, we’d like to offer you some real insight into how owners think about their businesses. 


Start with Food Costing 101 – The Magic of Restaurant Software and Food and Recipe Costing.


The Cost of Goods Sold Confusion

From our resident expert on Cost of Goods Sold , Matthew Starobin,  comes this timely article in Modern Restaurant Management Magazine

In a nutshell, if you don’t know your REAL Cost of Goods sold you’ll never really know how much you are making, or how to increase your earnings.

It can’t all be “in the chef’s head”. What happens when prices go up? Or when you don’t account for trimming and shrinkage? Read the article and get yourself enlightened!

Modern Restaurant Management Magazine

Modern Restaurant Management Magazine

Everybody is replaceable

I had to fire one of my cooks recently. It was tough, because he’s a really smart young kid who’s been with me for almost 3 years. I’m not gonna lie, the way I handled this situation was a textbook example of how NOT to deal with a problem employee.

“K” had no kitchen experience when he started with me but his instincts and tirelessness immediately made him stand out. I started spending more and more time training him and quickly gave him more responsibility. He went from peeling onions to running the grill station in just a couple months and was happily cranking out hundreds of covers without breaking a sweat.

He became my go-to guy. He didn’t mind putting in the 16-18 hour days, carrying hundreds of pounds of food up 5 flights of stairs to a client’s event space, or keeping the newer guys in line. He knew all my recipes and all my quirks- exactly what size I like the tomatoes diced in our pico de gallo, exactly how strong I want the horseradish aioli. I eventually started letting him run his own team when we had multiple catering jobs on the same day. That’s not something I do lightly.

Then the nonsense began.

He started showing up late, hungover, or even still drunk from the night before. He would call in sick and then be seen partying that same night (this is a small city and and everybody knows everybody in our business). He got lazy and started taking way too many smoke breaks. One time I even saw him chatting on his phone when service was starting in 10 minutes and his station wasn’t ready.

One day he pulled a no-call-no-show.

Now, I’ve immediately axed other cooks for doing even half the things that “K” did. But for some reason this kid had gotten under my skin. Maybe I saw in him a bit of myself at that age, or maybe I thought that after all the time and effort I put into him, it would be a personal failure to let him go.

Most likely, I thought that through all of his screw-ups, he still played a role that couldn’t be replaced. I hated the idea of finding a new cook, training him,  getting used to him, and rebuilding what I had with “K”.

So I sat him down for a chat. I let him know that this was the “come to Jesus” meeting and that if he didn’t shape up, he was done. He choked up a little bit and told me that he really wants this job and he promises to get his act together.

And he did. He went back to being my reliable, talented right hand. For about two weeks.

Then the lateness and laziness started all over again. I completely lost my cool this time and really let him have it. He apologized and promised to get better. And I gave him yet another “last chance”.

And again, and again, and again, until the word “last chance” stopped having any meaning at all. By this point he knew that my threats were empty and that he had free rein.

It actually took another 3 months of this before I finally let him go. And you know what happened? We got through it. The rest of my team stepped up and filled his shoes without skipping a beat and I brought on a new guy who’s doing great.

Most importantly, my crew is more motivated than ever without K’s disruptive influence. Instead of covering for somebody who’s not pulling his own weight, they can really shine.

I wish K all the best. I’m sure he’ll grow out of this phase and find success, but it won’t be with me. Mostly, I thank him for teaching me that a last chance needs to really be a last chance.

From the Restaurant Kitchen – Rules vs. Guidelines


When does your staff need a long list of incredibly specific rules, and when can you trust in their innate professionalism to make the right call based on your guidelines and expectations?


My team has a RULE that raw meat can never be on the same board as veg. But we have a GUIDELINE that we prefer not to accept Euros (we’re in a country that doesn’t use the Euro but is surrounded by countries that do).


If I see a cook toss a raw chicken thigh onto a board where he’s shredding lettuce, there’s no excuse in the world that protects him from the fire and lighting I’m about to rain down on him.


But when a tourist comes straight to our food truck from the airport and she only has Euros on her, my staff isn’t going to make her walk away hungry. They know that I might not love accepting foreign currency, but I really hate disappointing customers because of slavish adherence to arbitrary rules.


This dichotomy shows up everywhere in our business:


-Do you insist that your kitchen crew wear hairnets, or do you trust them to come to work properly groomed?

-Do you use transparent trash cans to monitor waste, or have you instilled the “NO WASTE” mantra into your staff for so long that they wouldn’t dream of throwing out usable product?

-Does your floor staff have a script of how to greet each table, or do you trust their charisma and instincts and let them improvise?


There’s no right answer.


Rules can make excellent guardrails for a fast food joint with a young staff and a high turnover rate. But there’s no faster way to demotivate an experienced, professional crew than by not trusting their judgement (sometimes).

CostGuard Food Costing and reciProfity Cloud Food Costing Software

If you are a current CostGuard Food Costing Software user and want to know why you should switch to reciProfity Cloud Food Costing Software we’re here to tell you:

  • Cloud based Food Costing Software! You can work from anywhere on any device that has a browser! Use iPads, Macs, etc. Licensing is per user, not per device.
  • Book of Yields is included in reciProfity cloud food costing software; you can select a Book of Yields item and all its conversion and prep info will be imported.
  • More pricing flexibility
    1. A single inventory item can be packed in any number of ways. reciProfity will price it properly when you select an alternate vendor with a different pack.
    2. Prep recipes have multiple units and can have shrinkage
  • Lots of changes to nutrition
    1. USDA 2017 rules including formatting, added sugars, etc.
    2. Added fields for labels: number of servings, serving size, weight, added sugar.
    3. Assign inventory groups as ‘non nutritional’ so items in those groups (such as packaging) don’t appear as nutrition exceptions.
  • Lots of changes in Inventory and Recipe Managers:
    1. Select/deselect columns
    2. In-line editing for many of the fields
    3. Options are remembered
    4. Drag and crop column names for multi-level sorting
    5. Filter for blank, e.g., what inventory items don’t have a vendor?
  • More key features for enhanced user experience
    1. Drag and drop ingredients when editing a recipe
    2. Save and stay in recipe (actually everywhere, but recipe was the most requested)
    3. Longer name fields
  • Data Optimization
    1. After converting your data, you can merge items. So where you have 2 different ‘sugars’ in CostGuard because they are packed differently, you can merge them into the same ‘sugar’ in reciProfity.
    2. You can also merge groups. So if you import new items from a supplier and include THEIR groups, you can merge that group with a current group. You won’t need to edit each item.
  • Better tools to get the most out of your data
    1. Search Engine logic is used widely to provide intelligent results: inventory manager, recipe manager, recipe entry, etc. You don’t need to click ‘full text search’ for a different set of results.
    2. Recipe Analyzer report; sorts your selling recipes by percentage in and out of the money. It’s like the Recipe Pricing Report, but is a clickable and sortable list of the recipes.

The Magic of Restaurant Software and Food and Recipe Costing

No, restaurant recipe costing is not magic. It’s just restaurant math. And this is where restaurant software comes in super handy. reciProfity is restaurant software that does restaurant food costing math for you. So it seems like magic!

If you’ve been running restaurants for years and doing restaurant food costing you’re likely already profitable and are using reciProfity to cost out your recipes and cut down on your admin work. But if you’re newer to the game, these articles will teach you how to conquer the profitability puzzle.

Here’s a quick primer on restaurant math: Spend 30% of your revenue on food and drinks to sell to your customers. Spend another 30% on your staff. Spend 20% on everything else: rent, electricity, gas, insurance, taxes, linen, maintenance, repairs, and light bulbs. Roll 10% back into the business to make it better and put 10% in your pocket. You’ve earned it.

To get this math right, it’s absolutely essential to have an accurate Food Cost. This is the most basic purpose of reciProfity. In other businesses this is called the Cost of Goods Sold (COGS) or Cost of Sales. Your Food Costing can be expressed in two ways:

  • As a number: exactly how much money do you pay for the ingredients in a recipe?
  • As a percentage: what percent of a recipe’s sales price goes to paying for its ingredients?


Here are some other terms you should know before we get into menu pricing strategies:

  • Fixed Costs, or Overhead, are the expenses connected with opening and operating your business everyday. This includes rent, electricity, gas, insurance, and anything else that stays the same (or almost the same) regardless of your sales volume.
  • Variable Costs are expenses that change directly proportionally to your sales volume. For our purposes, these are the same as Food Cost.
  • Payroll exists somewhere between Fixed Costs and Variable Costs. Even though your payroll costs vary depending on how busy you expect a service period to be, they can’t be expressed as an exact proportion of revenue so it’s not really a variable cost.
  • Gross Margin is the difference between revenue and food cost. In other words, it’s your profit AFTER paying for food but BEFORE paying your fixed costs. Also called Contribution Margin or Gross Profit.
  • Net Income is your profit after paying BOTH fixed and variable costs. From your accountant’s standpoint this is the same as your EBITDA: earnings before interest, taxes, depreciation, and amortization.
  • Breakeven Point is the amount of revenue you need to exactly cover all your fixed costs, variable costs, and payroll. In other words, it’s the amount of sales that results in exactly zero net profit/loss. Here’s how to calculate the amount of sales you need to do in order to hit your breakeven point:
    Breakeven Sales=Fixed Costs/Gross Margin %

Simple Example to illustrate these terms:
You pay $10 for a rib-eye steak and sell it for $30.
Food Cost: $10
Food Cost%: 30%
Gross Margin: $20

Once you begin to add recipes in reciProfity you’ll begin to see how we help you determine your food cost % and match it to a target.

If you see an Actual Food Cost % that is above your Target you’ll start thinking about how best to manage that.  We’re getting you off to a good start here.

Would you change the price you charge? Or modify your ingredients? Or have a talk with your supplier?


Next up: what your target and actual food cost % really mean. And how they differ depending upon the category of your recipes. Stay tuned!

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