Check stock before loss reducing money problems, small profits

A symptom some SME restaurant owners experience is “good sales, but poor profit” or “good sales, but no profit”. The symptom is often caused just a few factors, one of which is not appropriately counting stock or inventory to check whether or not the leftover amount is consistent with actual sales. As a result, costs rise and accumulate with the ingredients bought every day with a risk for being spoiled without use. Equally scary is that this practice opens a loophole for corruption. Therefore, inventory is a vital issue every SME restaurant owner should deal with on a daily basis.

Counting your inventory is important and directly affects your business.

We would like to raise an example to demonstrate what can happen if an entrepreneur neglects inventory counting.

Let’s say you buy 90 eggs in the morning.

During the day, you sell 20 plates of rice and fried eggs (at 2 eggs per plate). This means you use 40 eggs.

อา And you also sell 30 plates of a la carte + 1 sunny-side-up, so you use 30 more eggs.

This means that you use 70 eggs in total.

It also means that, you should have 20 eggs in inventory after the restaurant has closed. However, when you actually do the count, you find out that you have 10 eggs left with 10 eggs missing. If this happens every day, 300 eggs will be missing each month. If a single egg costs 3 baht, you’re losing 900 baht every month.  And if the serving price of a single egg is 5 baht when cooked, you’re losing 1,500 baht in sales opportunities.

This is the potential damage if you don’t consistently count your inventory. Similarly, an entrepreneur might not count inventory every day, but only check to see how much is left at the end of the day in order to prepare tomorrow’s orders and fail to count based on actual usage. This can increase the likelihood of rising costs. Like we said earlier, not counting inventory or not doing it thoroughly creates a convenient loophole for corruption.

Therefore, we recommend that entrepreneurs who have never counted their inventory to begin by counting about 10 ingredients chosen based on the following:

1. High cost; expensive ingredients.
2. One-on-one usage such as beers, wines and New Zealand mussels.
3. Risk for work-related errors such as overuse, incorrect cutting and above-standard sizes, etc.

The following are additional components to counting ingredients:

1. How much of each ingredient the standard recipe says each plate should contain.
2. The sales information for each plate; anyone with a POS can extract information for immediate use after each sale.
3. A stock counting form.

Restaurant entrepreneurs have to always realize that food cost is the number-one expense of restaurants. If effectively managed, this cost can leave you with a high profit margin, and inventory counting is an important process in cost management.