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Sunk costs

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Here is one favourite myth that needs to be dispelled. When you have bought food for the kitchen, cost doesn’t matter if it doesn’t get used. Just get some money back for it, that’s better than nothing. Creating ridiculously low priced specials does not send out a good message to customers and is really a symptom of the attitude towards inventory. Do you really want these food costs to hit your gross margin when you have overstocked the larder?

The flip side of this argument is that the cost is sunk, there is nothing you can about it now, so try and recover some form of revenue here. If you want to do this, at least make a note of what you have used and call it specials – cost. This way you can match the cost against any revenue you make on specials, which keeps it clear in your gross margin report. Specials should not be there to drastically undercut your main menu, or guess where the next stock for your specials is coming from.

Staff meals and publicity photos can all be done with surplus stock or even try and find a local charity or soup kitchen who would be grateful for this. Don’t let food hit your waste and don’t let cheap specials waste your reputation.

101 Restaurant Secrets

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