May 31, 2013

business basics

Smart Purchasing: Four Ways to Pump Up Profits

By Ed Avis

If your restaurant is like most, you probably are happy about every dollar left in your bank account at month’s end. Managing purchasing procedures can boost that total.

While entire college courses are taught on this topic, we’ve uncovered four tips that any Mexican restaurant owner can quickly apply:


Analyze Your Menu

Smart purchasing starts with a carefully planned menu. When considering new menu items, think about the long-term inventory impact of every ingredient. Some questions to answer include:

*Will you be able to source new ingredients needed to prepare the dish off-season?

*How will sales of that new offering affect your stock needs for other menu items?

*Can you use ingredients you already stock in those new menu items?

Regularly examining your ingredients to wean out things you might not need is important, says Rupert Spies, a senior lecturer of food and beverage management at Cornell University.

“You look at your inventory and say, ‘Do we really need five different kinds of olives? Can we do with three? Or two?’ It’s a give and take,” Spies says. “That’s what a good purchasing person does.”

At Margarita’s, a 23-restaurant chain in the Northeast, new menu offerings sometimes emerge from an in-house staff contest, according to Brisbane Vaillancourt, Margarita’s director of training. A key requirement for the winning recipe: the restaurant must be able to efficiently source all the ingredients.

“We go through all the entries and say, ‘Is this something we can do in the restaurant and make profitable? Is this something we can source?’” Vaillancourt says.


Create a Specifications Book

A “go-to” source book with a detailed description of every ingredient you purchase is a must in any restaurant kitchen.

“The specifications are the framework of everything you do,” says Spies.

Why are specifications so important? They help you deliver a consistent experience to customers—your chiles rellenos will taste the same every time a customer orders them—and they help you determine exactly what you need to order.

Common details spelled out in a thorough spec book include:

INTENDED USE. For example, if you’re using onions in salsa, you might want a different type of onion than you use in fajitas.

PRODUCT NAME. Do you want a specific type or brand of tomato? Request it specifically.

QUALITY. Most vendors carry good, better, and best levels. You might prefer the best quality chicken for a dish that contains a whole breast, but lesser quality for burritos that feature shredded chicken.

SIZE. Some items are measured by weight (a 12-oz. cut of steak), others by count (shrimp).

PACKAGING PREFERENCE. Do you want individually wrapped chicken breasts? Reusable tubs for masa? Packaging made from recycled materials?

PRESERVATION METHOD. Do you prefer fresh, frozen or canned varieties?

RIPENESS. Will you use your avocados the day they are delivered, or do you want them to keep a week?

EXPIRATION DATE. The date you accept depends on how quickly you plan to use the product.

At Salamandra’s Mex Grill in Grayson, Ga., Executive Chef Carlos A. Cisneros specifies at least five characteristics for every item.

“When we are going to add a new ingredient we need for our menus we choose the one we like and specify the description, brand, presentation, price, and item number for the vendor,” Cisneros says.

What happens if you don’t have specifications? The distributor will make the specs for you and bring what is available—even though it might not be what you really want.


Be the Restaurant No Vendor Can Cheat

Some clients check everything carefully, and some don’t. Unfortunately, some vendors take advantage of that fact. Don’t be one of the restaurants that can be cheated—check your orders carefully when they come in to make sure you’re getting precisely what you ordered.

“A vendor will be more watchful of the quality he delivers to you if he knows that is your procedure to review closely product received; he is not going to deliver old tomato to you, he is going to pass it to whoever does not normally review orders,” says Cisneros.

How often do problems arise with deliveries? Cisneros says not often at his restaurant, because Salamandra’s works with a few dependable, loyal vendors.

“We don't shop around every day like many restaurants do, we are loyal to our vendors and they have to be to us, too,” Cisneros says. “If something goes wrong they know they have to make it right quick, or else we will look for another vendor and they can end up losing a customer that orders every week, not only sometimes.”


Prevent Theft

A lot of money moves through your kitchen, and temptation often follows money. Consider this sadly common scenario: A delivery driver becomes friends with the employee who checks incoming orders and one day makes an offer: “If you let me invoice for A quality produce but give you B quality, I’ll split the difference in cost with you.” This is a tempting, hard-to-catch offer, especially if thousands of dollars of invoices are moving through the restaurant each week.

Another common problem is the offer of gifts in exchange for preferential treatment.

“If I’m a vendor and I go to your restaurant and say, ‘Here’s something nice [to purchase], and by the way, here are a couple of tickets to a baseball game,’ it’s hard to say no,” Spies says.

How do you prevent these common, profit-draining problems?

First, make sure at least two people are involved in making decisions, inspecting deliveries, and approving invoices. If you concentrate that power in one person, the opportunity for a little corruption increases.

Second, if you are the owner or general manager, make your presence known throughout the restaurant, even when you think you are too busy to leave your office. If people know you will be frequently walking around, chatting with workers, and randomly looking at deliveries, the temptation to steal will shrink.

Carefully managing your purchasing procedures will add some work to your already busy schedule, but it could also add a few dollars each day to your bottom line.

Ed Avis is the publisher of el Restaurante Mexicano.

May 31, 2013

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