Know Your Food Cost Percentage. Know Your Restaurant Profits.
Calculate Food Cost Percentage
For years, Point of Sale (POS) systems have been the backbone of the restaurant industry. They have evolved with time and have gone through different stages of changes, but in recent years, Android-based POS systems have taken over the old-fashioned POS systems. The Android-based systems provide numerous advantages over traditional systems, and that is why restaurants are migrating to them. In this blog, we will cover what Android-based POS systems are, what advantages they offer to the restaurant industry, and why more and more businesses are adopting them.
One of the key advantages of Android-based POS systems is that they offer a cost-effective solution to the restaurant industry. They have lower hardware costs, which means businesses can switch to them without having to worry about high equipment costs. Moreover, they also provide low-cost software solutions with subscription-based pricing that can help restaurants to save money.
Unlike traditional POS systems, Android-based systems are user-friendly and easy to navigate. With a touch-based interface and user-friendly flow, new employees can easily learn how to use the POS in no time. This helps the restaurant industry to save more time and money on employee training.
Another significant advantage of Android-based POS systems is their flexibility. They can be easily customized and configured to meet the demands of different restaurants. This allows restaurant owners to choose the right solution for their specific needs. For instance, a small restaurant may only require a basic POS system, while a larger restaurant may need a more complex system that includes inventory management and CRM features.
Another advantage of Android-based systems is that they can be easily integrated with other technologies. For example, they can be integrated with third-party e-commerce platforms, delivery service providers, online reservation systems, and more. This provides a unified solution for the restaurant, where they can manage all aspects of their business from a single device.
Lastly, Android-based POS systems are more robust and durable than traditional ones. They are designed to operate in harsh environments and can withstand spillages and dirt. Moreover, they support automatic backups, which means that data is much safer than in the traditional ones.
The restaurant industry is undergoing rapid technological advancements, and Android-based POS systems are leading the charge. They offer numerous advantages over traditional systems, and that is why businesses are migrating to them at an accelerating pace. Cost-effectiveness, user-friendliness, flexibility, easy integration, and reliability are only a few of the many reasons why Android-based POS systems are becoming the go-to choice of restaurant owners. If you are a CTO in the restaurant business, considering migrating to Android-based POS systems could be a wise decision for your company’s future.
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.
