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Cost Control

Cost control in hotels and restaurants is one of the most important systems for protecting profitability. Our cost control consulting service covers restaurants, hotel restaurants, resort hotels, à la carte restaurants and high-end food and beverage operations. We analyze recipe cost, portion standards, inventory tracking, purchasing, storage control, waste ratios, menu profitability, food and beverage cost percentage, cost per overnight stay, breakfast, lunch and dinner costs. We identify...
Cost Control
Cost Control

Cost Control

MALİYET KONTROLÜ-cost control

COST CONTROL
Cost control in hotel and restaurant operations is not simply about checking product prices. Real cost control means seeing the full relationship between purchasing, recipes, portions, inventory, storage, production, service, waste, staff, energy, overheads, selling price, menu performance and guest count.
 
A restaurant may be full but still fail to make money. A hotel may operate with high occupancy while its food and beverage department is losing profit. A menu item may sell well but leave no real margin for the business. This is exactly where cost control becomes essential: it reveals the real picture, not the visible one.
 
As Chef Ahmet Özdemir, I provide cost control consulting for hotels, restaurants, à la carte restaurants, high-end restaurants, resort hotels, VIP organization kitchens and professional food and beverage operations in different parts of the world. This work is not only about making calculations; it is about showing exactly where the business earns money, where it loses money and which mistakes grow every day because they are repeated.
 
In our approach, there is no guessing. There are no assumptions. There is no “this is how it has always been” mentality. The numbers say what they say. Because in cost control, the most expensive mistake is discovering the truth too late.
 
COST CONTROL IN RESTAURANT OPERATIONS
In restaurants, cost control begins with the real working order of the restaurant. How many items are on the menu? Which products are selling? Which products are only taking up space on the menu? Which dishes bring profit? Which dishes slow down the kitchen? Which product sells well but creates low profit? Which product sells little but increases inventory cost?
 
The first goal in restaurant cost control is to separate the areas that make money from the areas that lose money. Because not every sale is a good sale. Some products create turnover but not profit. Some products sell less but create strong margins. Some products both sell poorly and increase storage load. As long as these products remain on the menu, purchasing, stock, preparation, staff time and kitchen space are used unnecessarily.
 
The following core areas are evaluated together in restaurant cost control:
Menu sales performance
Product-based recipe cost
Portion standard
Food cost percentage
Beverage cost percentage
Purchasing prices
Storage entries and exits
Inventory count differences
Waste and loss ratios
Staff production efficiency
Service intensity
Table turnover speed
Cost per cover
Average check
Best-selling products
Products causing the highest loss
Products that should remain on the menu
Products that should be removed from the menu
 
When cost control is carried out in restaurants, attention must not be given only to expensive products. Meat, fish, seafood, specialty cheeses, imported items and high-quality oils naturally carry high risk. However, products that appear cheap may also carry serious risk.
 
Rice, bulgur, potatoes, flour, bread, salad ingredients, garnishes, sauces, tea, coffee, breakfast products and open-service items may seem inexpensive. Yet when they are used in high volume, small portion mistakes, uncontrolled production, over-preparation, improper storage and daily waste can create serious cost losses.
 
For this reason, cost control must focus not only on “the most expensive products” but also on “the most frequently used products.” Sometimes the real loss of a business does not come from an expensive product, but from a cheap product consumed without control every day.
 
COST CONTROL IN HOTEL OPERATIONS
Cost control in hotels is broader and more sensitive than in restaurants. Because in a hotel, the evaluation does not involve only one restaurant; breakfast, lunch, dinner, snacks, pastry production, bars, room service, banquets, meetings, weddings, open buffets, staff meals, VIP invitations and private events must all be assessed together.
 
To reach accurate results in hotel food and beverage cost control, looking only at total purchasing figures is not enough. The hotel’s overnight stays, room occupancy, guest count, breakfast, lunch, dinner, extra consumption, buffet intensity, group guests, child guest ratio, half-board, full-board, all-inclusive system and banquet usage must be analyzed together.
 
In a real hotel cost analysis, the following questions must be asked:
How many overnight stays did the hotel have?
How many breakfasts were served against these overnight stays?
How many lunches were produced?
How many dinners were served?
How many guests used the open buffet?
How many guests moved to the à la carte restaurant?
How many room service orders were received?
How many banquets, meetings and private meals were organized?
What was the cost of staff meals?
What is the difference between food produced and food consumed?
What gaps exist between products purchased and products sold?
 
Any cost evaluation made without answering these questions is incomplete. Because in hotel operations, cost is not created only in the kitchen; it is created together with overnight stays, occupancy, service system, guest profile and departmental usage.
 
As in large-scale hotel and resort analyses such as Acapulco-style operations, a strong cost study should not only show total spending. It must reveal consumption per overnight stay, cost per meal period, open buffet loss, purchasing price differences, stock movements and department-based expense distribution. In large operations, a mistake that looks small can turn into a major figure at the end of the month.
 
COST ANALYSIS THAT TELLS THE TRUTH
The most important point in cost control consulting is to tell the business not what it wants to hear, but what it needs to know.
If a product is expensive and not sold correctly, it is risky.
If a product is cheap but consumed without control, it is also risky.
If a menu item sells a lot but leaves no profit, it is risky.
If a storage area is full but the count is not accurate, it is risky.
If a software system is used but its reports are not read correctly, it is risky.
If a kitchen produces heavily but has no standard, it is risky.
If a hotel operates with high occupancy but does not know its meal-period cost, it is risky.
 
We reveal these risks with numbers. How much of each product was purchased, how much was used, how much was sold, how much went to waste, how much remained in stock, how much price difference occurred and how much profit was left; the full picture becomes clear.
 
FULLY FORMULATED RECIPES
The foundation of cost control is fully formulated recipes. In a business without recipes, real cost cannot be known. Because the cost of a dish does not consist only of the main ingredient; sauce, garnish, oil, spices, cooking loss, gram weight, portion size, presentation and side items served with the dish are also part of the cost.
 
In fully formulated recipe work, the following details are defined for each product:
Net gram weight
Gross gram weight
Cleaning loss
Cooking loss
Portion quantity
Garnish quantity
Sauce quantity
Spice and supporting ingredient quantity
Plate presentation standard
Product cost
Selling price
Profit ratio
Target cost percentage
 
When this system is established, everyone in the kitchen produces the same product with the same gram weight, the same technique and the same cost standard. As a result, the business works through a system, not through individuals.
 
INVENTORY TRACKING AND STORAGE CONTROL
In a business without inventory tracking, cost control remains only on paper. If it is not known how purchased products enter storage, under which conditions they are stored, which department they are issued to, how much is used and how much is lost, real cost cannot be seen.
 
The following areas are controlled in professional inventory tracking:
Daily storage exits
Weekly inventory counts
Monthly main counts
Department-based product usage
Kitchen, bar, pastry and banquet exits
Critical product stock levels
Minimum and maximum stock quantities
Expiry date tracking
Spoilage and disposal records
Count differences
Storage security
Authorized delivery system
 
Storage is the silent cash register of the business. A product lost in storage is money leaving the cash register.
 
IDENTIFYING THE DEFICIENCIES OF EXISTING SOFTWARE SYSTEMS
Many hotels and restaurants use professional software systems. However, using software alone does not mean cost control. If the software is not set up correctly, recipes are missing, stock cards are opened incorrectly, units are mixed, purchasing entries are uncontrolled, reports are not read or staff do not use the system properly, the software only piles up data.
 
In cost control work, the deficiencies of existing software systems are also analyzed:
Are stock cards correct?
Are product units standardized?
Are recipes fully entered into the system?
Are purchasing prices up to date?
Are storage exits regular?
Do POS sales match kitchen production?
Are bar and kitchen usages separated?
Are inventory count differences reported?
Does the staff use the software correctly?
Do reports taken from the software help the business make decisions?
 
For missing points, more practical, clearer and business-specific solutions are produced. Sometimes the most important thing is not an expensive software system, but the right tracking system that the business can actually use every day.
 
AT LEAST 18 DIFFERENT ANALYSIS RESULTS
In cost control consulting, the business is not given only a general comment. Measurable, readable and decision-making analysis results are prepared.
 
The main analysis results are:
1. Food cost percentage analysis
2. Beverage cost percentage analysis
3. Product-based recipe cost analysis
4. Portion cost analysis
5. Menu profit and loss analysis
6. Best-selling products analysis
7. Lowest-selling products analysis
8. High-selling but low-profit products analysis
9. Low-selling but high-profit products analysis
10. Highest-risk expensive products analysis
11. Highest-risk low-cost and high-volume products analysis
12. Waste and loss ratio analysis
13. Inventory turnover speed analysis
14. Storage count difference analysis
15. Purchasing price difference analysis
16. Supplier price and quality performance analysis
17. Cost per cover analysis
18. Average consumption per guest analysis
19. Food and beverage cost per overnight stay analysis
20. Breakfast cost analysis
21. Lunch cost analysis
22. Dinner cost analysis
23. Open buffet cost and waste analysis
24. Banquet and event cost analysis
25. Room service cost analysis
26. Staff meal cost analysis
27. Bar cost analysis
28. Pastry and dessert production cost analysis
29. Energy, water and production expense analysis
30. Percentage distribution analysis of overhead expenses within total expenses
 
The purpose of these analyses is not to give the business thick files; it is to enable practical decisions. Which product price should change? Which portion should be corrected? Which supplier should be reviewed? Which product should be removed from the menu? Which product should become more visible? Which storage area has a gap? Which department has weak control? These questions are answered clearly.
 
PERCENTAGE RATIOS OF OVERHEAD EXPENSES
Cost control is not limited to food and beverage cost. In hotel and restaurant operations, the percentage ratios of overhead expenses within total expenses must be calculated. Because sometimes the business loses money not in product cost, but in overhead expenses.
 
The main overhead expense items analyzed are:
Percentage share of food expenses within total expenses
Percentage share of beverage expenses within total expenses
Percentage share of staff expenses within total expenses
Percentage share of rent or depreciation expenses
Percentage share of energy expenses
Percentage share of water expenses
Percentage share of natural gas or fuel expenses
Percentage share of cleaning and consumable expenses
Percentage share of maintenance and repair expenses
Percentage share of accounting, administrative and office expenses
Percentage share of marketing, commission and digital platform expenses
Percentage share of packaging and takeaway expenses
Percentage share of staff meal expenses
Percentage share of waste, loss and disposal expenses
Percentage share of logistics and transportation expenses
Percentage share of breakage, loss and damage expenses
Percentage share of training and quality improvement expenses
Percentage share of taxes, licenses and official expenses
 
These ratios are different in every business. For this reason, giving memorized target ratios is not the right approach. The correct method is to take the real data of the business and calculate the percentage share of each item within the total expense table. Then these ratios are interpreted together with sales, occupancy, guest count, number of meal periods, menu prices and operational structure.
 
BREAKFAST, LUNCH, DINNER AND OVERNIGHT STAY DATA
In hotel cost control, the most critical issue is reading overnight stay numbers together with meal-period costs. A hotel must know how many guests it served for breakfast, how many guests it served for lunch, how many guests it served for dinner and the real cost of this production according to overnight stays.
 
For example, breakfast cost does not consist only of cheese, olives, eggs and bread. Open buffet products, hot items, beverages, pastry products, fruit, vegetables, staff labor, energy, service equipment, waste and products that cannot be carried over to the next day are also part of breakfast cost.
 
Likewise, at lunch and dinner, menu structure, buffet width, guest profile, child ratio, group usage, external events and excess production must be carefully analyzed.
 
At the end of this work, hotel management clearly sees the following picture:
Real food and beverage cost per overnight stay
Real breakfast cost per person
Real lunch cost per person
Real dinner cost per person
Open buffet waste ratio
Average consumption per guest
Department-based cost differences
How cost changes when occupancy changes
 
Without this information, hotel management cannot make the right decisions. Because if cost increases uncontrollably while occupancy rises, the business may seem to grow, but its profit weakens.
 
MENU ENGINEERING AND SELLING PRICE CONTROL
Cost control must be carried out together with menu engineering. After the recipe cost of a product is calculated, its selling price, profit margin, sales quantity, preparation difficulty, service speed and guest perception must be evaluated together.
 
Some products on the menu are showcase products. Some products are profit products. Some products are complementary products. Some products are only cost burdens. A menu cannot be managed without separating these categories.
 
With correct menu cost control:
Profitable products are strengthened
Loss-making products are identified
Unnecessary menu crowding is reduced
Inventory load is lightened
Purchasing becomes more controlled
Kitchen production becomes simpler
Service speed increases
Guest satisfaction is protected
 
FIELD EXPERIENCE IN COST CONTROL
Cost control cannot be done only at a desk. Accurate results cannot be achieved without going into the field, seeing the kitchen, opening the storage areas, reviewing purchasing files, tasting the menu, observing service and understanding staff flow.
 
Some details do not appear in reports. Which product is over-prepared? Which staff member increases gram weight? Which plate returns from service? Which product is forgotten in the refrigerator? Which purchasing habit increases cost? Which buffet product goes to waste every day? Which software report hides the truth?
 
These details are seen through professional field experience. This is what creates the difference in cost control.
 
WORLDWIDE COST CONTROL CONSULTING
Our cost control consulting service can be applied to hotel and restaurant operations anywhere in the world. À la carte restaurants, hotel restaurants, resort hotels, high-end restaurants, traditional Turkish cuisine concepts, Ottoman palace cuisine, Anatolian cuisine, Mediterranean cuisine, Levantine cuisine, Asian and Arab cuisines, vegan and vegetarian kitchens, banquet operations, VIP dinners and international food and beverage projects can all be evaluated within this scope.
 
Every business has a different cost structure. Therefore, we do not use ready-made templates. The existing data of the business is taken, the real working order in the field is examined, software reports are checked, recipes are analyzed, inventory movements are tracked and an applicable solution plan is prepared.
 
The goal is not only to reduce cost. The goal is to increase profitability without damaging quality, weakening guest satisfaction, lowering brand value or placing unnecessary pressure on staff.
 
CONCLUSION
Cost control is one of the strongest management tools for hotel and restaurant operations. Because a cost that is not measured cannot be managed. A cost that is not managed silently consumes the profit of the business.
 
Correct cost control is built with fully formulated recipes, strong inventory tracking, accurate purchasing, realistic portion standards, clear storage order, software control, menu engineering, overhead expense percentages and practical solutions that can be applied in the field.
 
In this work, we do not give the business only numbers. We explain what the numbers mean. We clearly reveal which product is risky, which expense is growing, which recipe is wrong, which inventory movement is creating a problem, which software deficiency is hiding the cost and which decisions will make the business earn money.
 
Real profitability in a hotel or restaurant operation begins with correct cost control. Because strong businesses are not only businesses that sell; they are businesses that know what they sell, how much they sell it for, how much they earn and where they lose.
 
Chef Ahmet ÖZDEMİR
International Restaurant Consultant
International Kitchen Consultant
International Hotel Kitchen Consultant
** All rights reserved ©. This article may not be copied, reproduced or published on another website without the written permission of Chef Ahmet ÖZDEMİR. It may be used in academic studies with proper citation.

 

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