Which Form 8865 Percentage 2023-2024

Hey everybody, Ryan Grump here. I am the author, speaker, chef, restaurateur, and founder of restaurantboss.com and restaurantcoachingclub.com. Today, we are going to discuss the importance of food cost in your restaurant and how to determine it. Knowing your food cost is crucial for tracking and running a profitable restaurant. It serves as the baseline for your business. Lower food cost equals higher profits. You need to track it consistently to properly price your menu items. Let's compare this to a tire store. No one would sell you tires without knowing their exact cost. Similarly, restaurant operators, chefs, general managers, and owners must know the real-time cost of every menu item. Only then can you optimize your menu and increase profits. This knowledge is also crucial for menu engineering, where simple adjustments like rearranging items or highlighting certain dishes can significantly impact profits. Food cost is not just how much you spend on food each month. It's a misconception. There are two types of food cost in your restaurant: plate cost and period cost. Plate cost is easy to understand. It's the cost to prepare an item divided by the selling price. For example, if a hamburger costs $2 to prepare and you sell it for $8, the plate cost is 25%. Determining the actual cost of the hamburger is more complex, which we will cover in another video. But for now, remember the formula: cost to prepare divided by selling price times 100 gives you the plate cost. To calculate the period food cost, you need to understand the cost of goods sold (COGS) formula. It's calculated by adding the beginning inventory and purchases, then subtracting the ending inventory. This will give you the usage. Divide this by your sales to get the cost of goods sold percentage. The cost of goods sold formula...