In order to produce your menu items for your guests, you need to order the proper raw materials for your restaurant. This typically requires purchasing food and supplies from one or more vendors every week. Choosing a vendor and placing an accurate food order can be a tricky process, so consider the following guidelines when selecting vendors and purchasing inventory for your restaurant.
Choosing a Vendor
Choosing a vendor is much like hiring a new employee. It is best to find a company and people with whom you work well and feel comfortable. At a minimum, a vendor is responsible for delivering food or supplies at a price within your budget. However, do not make a decision based solely on price. You will need to work out several details about product specifications, delivery times, and terms of payment, and so choosing a vendor with whom you can forge a good working relationship will be helpful in the long run. Use the following guidelines to find a vendor that will suit your needs:
Check references. Get to know the company, and ask them what other restaurants they serve. By contacting those restaurants, you can get an idea about the vendor staff as well as the way they do business. You are not only looking for someone to supply you with product, but someone to help you succeed as well.
Look for quality product and service. Good vendors are not always the ones with the cheapest prices. Without quality food and supplies, your restaurant will not bring in the customers and the revenue it needs to survive. Additionally, quality customer service is the foundation of a good working relationship, so look for a vendor who can provide great, consistent service to you and your restaurant employees.
Ask about packing dates. Before settling on a vendor, always ask about meat packing practices, if applicable. Find out the typical time between the slaughter date, the packing date and the shipping date. Although the topic is unpleasant, determining this information ahead of time is critical ensuring you receive a fresh product. Check to make sure that there is never be more than six days between the kill date and the shipping date on the meats you purchase.1
Keep vendors to a minimum. You probably cannot purchase all the products you need from the same vendor. For instance, you usually need to purchase liquor and food from different vendors, and you may even find that you need to order some food items from one vendor and other food items from another. However, keeping track of a lot of invoices wastes time and energy, so try meet your needs with the fewest possible number of food vendors.
Negotiating the Best Deal
Even when you find a vendor that appears to fit your restaurant needs, you may have to negotiate certain aspects of your business relationship before all is said and done. Be sure to settle all your business terms before securing a food vendor.
Negotiate product standards. You should feel confident that your vendor will provide quality food products for your restaurant. In the event that 10 cases of potatoes arrive and half of them are rotten, you want to be sure that your vendor will take care of the problem. Adhere to your standards and make sure you know that your vendors guarantee their products in the event of a mishap or problem.
Discuss the delivery schedule. Most vendors service other companies in addition to yours, so you may need to negotiate a schedule that works for you both. Do not schedule deliveries for peak business times at your restaurant, and agree on a window of time in which the delivery should arrive. Many restaurants choose early morning hours for delivery times.
Settle prices and payment terms. Product prices and terms of payment involve negotiation. Be sure you discuss product specifications, including item quantity, overall yield and the prices expected for the products. Maintain stringent standards and keep quality your priority. Additionally, be sure to discuss payment terms. Many vendors want payment within 30 days or less, but others may offer more flexibility—policies and requirements vary by vendor.
Determining How Much to Order
When purchasing supplies, pay attention to your inventory levels as well as your sales throughout a given period. Try to create a system for ordering in your restaurant so that you spend your money wisely and keep your food cost in check. The person in charge of purchasing needs to know the kitchen inside and out, and be able to make the best choices for the restaurant’s needs. Depending on the operation, kitchen managers, executive chefs and general managers are usually good choices for this position. Usually, having only one or two persons responsible for all the purchasing for the restaurant can help keep things under control.
Pars and Build-To Amounts
An efficient way of establishing order amounts is to use a system of “par levels,” also known as “build-to amounts.” These are synonymous industry terms for the amount of food and supplies your restaurant should always have on hand for the coming period between deliveries.
Par level. The best way to determine par levels is to keep an eye on your actual usage over a period of time. After a while, you will get a feel for how much of every item you need to have on hand each week to accommodate your sales. When it comes to determining par levers, experience is the best teacher.
Build-to amount. The build-to amount is just another way of saying par level. When ordering, you essentially need to “build” your inventory to par level. Before purchasing food, you should have build-to amounts or par levels in place to know how much you need to order every time. Ordering too much can add to your weekly expenses and increase food costs for the period. Purchase too little, and you might run out of food or supplies before the next delivery. To determine the order amount you need for your restaurant, take the “build-to amount” and subtract the amount you have on hand.
If you find that you are going through 10 -12 packs of hot dogs every week, your par for hot dogs might be twelve packs. Twelve packs may be too much some weeks, but you might order them as a safeguard in case you unexpectedly run out of hot dogs. Just be careful not take this too far. Ordering too much inventory has a negative effect on your food cost and actually increases the odds that your kitchen staff might get careless and waste more food.
For instance, as you look through your inventory, you see that you only have one case of potatoes on hand. Your par level for potatoes is five cases.
Using an Order Guide
One of the first steps in figuring out how much food or supplies to order is by determining the inventory you have on hand at the time. Usually this requires taking a look in the walk-ins and storage areas to determine what and how many items you already have in your kitchen. It helps to have an order guide that you can print out and use as you look at your inventory on hand. Your order guide should detail the item and unit of measure, as well as the inventory you have on hand, the build-to amount or par level, and the resulting order amount. Keeping track of several previous orders will help you determine how much to order this time around.
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Projecting Sales for Accurate Orders
Most restaurants will negotiate weekly deliveries for their food and supplies from their vendors. One thing to look out for is the number of days between the time you order and the time you receive the delivery. If you have several days to wait for the delivery, you will need to factor in the sales your restaurant sees during those days in order to purchase enough food and supplies to make up for it.
Determining Your Projected Sales
Determining your projected sales is one way can help you estimate about how much business you will do between the time you placed the order and the time you receive it. Use the following guidelines to determine the projected sales:
- Estimate the per person check averages for dinner sales throughout the week.
- Make an approximation of how many guests your restaurant will see for the dinner meal period each day.
- Total the customers and multiply by the estimated check average.
- Repeat the above steps for all meal periods and any other sales, such as bar sales.
Your projected sales total is just an estimate, of course, based on previous sales, or even how much your restaurant brought in at the same time last year, if your restaurant has been open that long. After a few orders you will get a better feel for your sales trends. This is just another way to get a feel for how much business you will do in the coming days, and if you need to order extra inventory or not.
Download a sample Restaurant Order Guide (PDF)
- The check average for dinner sales are typically $15 per person. Determine this by looking at check averages in the Point of Sale (POS) reports from previous weeks.
- Approximate the number of guests served each day. This information can also be determined using data from POS records from previous weeks:
- Monday: 60 guests
- Tuesday: 80 guests
- Wednesday: 70 guests
- Thursday: 100 guests
- Friday: 150 guests
- Saturday: 170 guests
- Sunday: 70 guests
- The per-person check average of $15 multiplied by 700 total guests will result in the projected dinner sales for the week:
- Repeat this calculation to determine the total projected sales, which includes lunch sales, bar sales, sales during off-peak hours and sales from catering.