Know Your Food Cost Percentage. Know Your Restaurant Profits.
Calculate Food Cost Percentage
Sales play a pivotal role in determining a company’s success, making the need for an efficient tool to manage them essential. So whether you’re seeking to establish your first business, aiming to scale up your existing one, seeking to switch to advanced POS (point of sale) system software, or simply thinking of making a switch, it’s imperative you do your exploration before investing.
Setting up an effective POS system requires a lot of thought and work. With this ever evolving restaurant and retail market it becomes crucial to find your perfect fit that can help manage your sales, inventory, and customer data. This blog aims to be your companion in finding the right POS software for you!
Analyzing Your Business Needs and Identifying Industry-specific Features
With new innovations passing and business opportunities popping everyday the array of services where a POS software becomes crucial is expanding exponentially. Current POS software are available for various industries like retail, travel & hospitality, government, BFSI, healthcare & pharmaceuticals, media & entertainment, transportation & logistics, and others. Making it important for you to first write your pain points and be able to enlist your needs before embarking on a journey towards finding a POS software that works for you.
Assessing the Scalability and Future Growth Potential of the POS Software
We live in a world of updates – so when it comes to your POS software – updates are a crucial asset in helping you keep your business up to date with efficiency, speed and security. Make sure to find out the kind of updates provided by the POS software companies – if you’ll have to pay for them subsequently or they are inclusive and shall be updated automatically.
Examining Core Functionality: Sales, Inventory Management, and Reporting
As a business you may have varied requirements from a POS system like – managing inventory and sending reminders when stock runs low, recording the shift schedule of employees, generating consumer data for efficient marketing of promotional offers etc. Check and compare the services offered by different suppliers and choose the one that checks your list. Most suppliers often provide a tiered system of plans which include different services. On the contrary, customizing your POS plan is a wonderful way to make sure all your needs are met.
User-Friendliness and Intuitive Interface for Efficient Operations
Choose a POS software having an interface which is easily navigable with clear labels for all controls and buttons which shall allow quick navigation to commonly accessed screens and items, along with one-button access to frequently used functions.
Assessing Integration with Existing Systems: Payment Processors, E-commerce Platforms, etc.
It is crucial to evaluate how well your POS software will integrate with your existing payment processors, e-commerce platforms, inventory management tools, accounting systems, customer relationship management (CRM) solutions, shipping services, and any other relevant technologies that are already being utilized by your business.
Look for APIs or direct integrations that can provide real-time data exchange, ensuring that the flow of information across these systems is as seamless as possible. This not only minimizes errors caused by manual entry but also allows you to gain insights into key metrics from multiple sources so you can make informed decisions about your business.
Compatibility with Hardware: POS Terminals, Printers, Scanners, etc.
Take into consideration if the new POS software you’re looking at is compatible with your existing hardware appliances like QR code scanner, Barcode generator, Printer etc. thereby reducing any additional expenditure. Most POS software companies are now offering Cloud based POS system softwares, removing the need for hardware devices – yet again if you’re a larger organization with multiple franchises – then a traditional POS system software shall be optimal for you.
Data Security Measures and Encryption Protocols
For the modern clientele these days, data security is of utmost importance – thus security and compliances should top your list of factors while choosing the best POS system software for you. Choosing a system with two step authentication and SSL data encryption shall help your clients feel safe while sharing their details with you.
Compliance with Payment Card Industry Data Security Standards (PCI DSS)
Such compliances provide security measures for credit card transactions including encryption, tokenization, and secure networks. Vulnerability management practices such as regular software patches, network monitoring, and employee training also play crucial roles in maintaining the safety and reliability of sensitive data and preventing the organization from any sudden threats.
Evaluating the Availability and Responsiveness of Customer Support
Once you’ve invested in a POS system software, the journey doesn’t end there- in fact it begins from there. Try to choose a POS system software that is available to you on call, text and email – thus having a 24×7 availability so that if there’s ever a glitch, you don’t have to flinch!
Training and Resources Provided by the POS Software Provider
An efficient onboarding program is detrimental for deciding if your risk was worth the investment. Suppliers nowadays provide personalized onboarding programs with training support to make sure you are up to speed with all that you require from the system. If you’re an organization that is wanting to make a switch, then ask for migration programs so that all your data gets transferred without hassle.
Understanding the Pricing Structure: Upfront Costs, Monthly Fees, and Additional Charges
You should thoroughly check with the suppliers about all costs to be incurred. Some softwares come with an annual package, which is often more economical while some have monthly/quarterly payment options making it easier to switch if you don’t like the software without any loss. Ask the supplier for a demo or free trial which shall help you evaluate if the POS system software you’re looking at actually meets your requisites.
Calculating the Total Cost of Ownership Over the Long Term
Consider this before making an investment in POS system software. This includes upfront costs such as licensing fees, installation charges, hardware purchases, and ongoing expenses such as annual maintenance plans, subscriptions, support contracts, and transaction fees. Some POS providers might offer hidden fees, while others may charge flat rates for certain services. Be wary of promises regarding low pricing without understanding long-term expenses.
Researching User Reviews and Ratings on Reliable Platforms
Once you’ve shortlisted the best POS system software – start by comparing them side by side and zeroing down on the perfect one for you. You can start your search from Google and check for user reviews, ratings, customer feedback etc. This shall give you an in depth insight into the pros and cons of your chosen system and help you make an intelligent choice.
Seeking Recommendations from Peers and Industry Professionals
You can also connect with other professionals in your line of business and get feedback about the kind of POS system software they are using, the benefits and liabilities encountered – so that you can check for all the desired qualities before closing your deal with the supplier.
The era of modernization is here and efficiency plays a huge role. Thus before investing into a POS system software make sure that it is equipped with attributes to make your business run smoothly.
Federal law allows including only employees who customarily and regularly receive tips. This typically excludes back-of-house staff like cooks and dishwashers. However, some states might have different regulations.
Tips are typically collected throughout the day and pooled at the end of the shift. The pool is then distributed among eligible employees based on the chosen method.
In some states with allowed tip credits, employers can take a portion of the minimum wage based on tips received by employees. This essentially allows employers to pay tipped employees a lower base wage.
Non-compliance can lead to fines and penalties from the Department of Labor, wage-and-hour lawsuits from employees, and employee morale issues.
Tip sharing is voluntary. An employee might choose to share some of their own tips with colleagues. Tip pooling is a mandatory system where all tips are collected and then distributed among eligible employees based on a predetermined method.
No, managers and supervisors cannot participate in the tip pool.
There are no standard percentages by law. However, 15-20% is a common tipping range for good service in the USA. Tip pooling eliminates the need for individual tip calculations.
Tip pooling can be beneficial for restaurants of all sizes. It can foster teamwork, ensure everyone benefits from good service, and simplify tip distribution.
Yes, tip pooling is legal under federal law (FLSA) with some key restrictions. However, some states might have additional regulations. Always check your state's Department of Labor website to ensure compliance.
Pricing is a balancing act! You need to cover your costs (including the food cost per portion) while offering a price point that feels valuable to your customers. Consider factors like competition, target audience, and the overall dining experience you create.
Food cost calculators are great for initial estimates, but consider restaurant management software for ongoing success. This software tracks inventory, automates cost calculations, and generates reports to identify cost-saving opportunities.
Absolutely! Many online food cost calculators can handle various cuisines. Look for tools that consider ingredient types, portion sizes, and even regional pricing variations.
Consider your food cost percentage your restaurant's financial fitness tracker. It's the total cost of recipe ingredients divided by your total menu sales. Ideally, calculate this regularly, like weekly or bi-weekly, to monitor profitability and adjust pricing or portions as needed.
The standard costing model is like a recipe for consistent pricing. It uses historical data and market trends to predict ingredient costs, allowing you to budget, purchase, and maintain profit margins even when prices fluctuate.
Food cost per portion is the actual cost of creating a single serving of a dish. It considers all ingredients, including spices, garnishes, and even waste! This number helps you understand your profitability and set menu prices effectively.
Satheesh Kanchi is the Founder and CEO of OneHubPOS, He is the restaurateur behind several popular Indian restaurants in California and India. He started his career as a technology CEO, bringing that same level and learnings innovation and drive to the restaurant industry.
