Prevent Restaurant Silence with Precise Raw Material Calculations!

Did you know? As many as 60% of restaurant businesses can fail in the first year, and of the 40% that survive, 35% close in the second year. Many articles discuss why these failures occur, often related to marketing and target markets. But what if the target market and marketing are spot on, yet the restaurant business still needs to succeed?

All will be revealed in this article, which will delve into the real problems related to the biggest burden of a restaurant: the raw material load.

The Overlooked Challenge of Raw Materials

For example, in a culinary business case study, Yogo (pseudonym) as the business owner purchases 117 Kg of meat from supplier A on Monday. Then, he places another order on Wednesday for 52 Kg, and on Friday for 200 Kg for the weekend when it's usually busier.

Ordering from suppliers has become routine for Yogo. As the owner and purchasing manager of a restaurant with three branches in South Jakarta, Yogo also processes information about goods received in the warehouse, transfers goods to outlets, and goods received at outlets, and confirms supplier invoices from finance, to ensure that the amount paid matches the goods received.

At first glance, the above workflow seems relatively easy, right? Yes, although many steps must be done meticulously.

However, in reality, Yogo has to repeat the entire process for about 40 suppliers to buy more than 200 types of raw materials. With simple calculations, Yogo has to process about 480 documents in a week if checking the entire purchasing process, or at least 120 documents if not verifying supplier invoices

Add to that the calls, emails, and WhatsApp messages that must be made to these 40 suppliers. Does Yogo have time to ensure the accuracy of supplier invoices? Is adding more staff to help Yogo the only solution? The answer: not necessarily effective.

The Fundamental Issue

In reality, more than 50% of purchase transactions show differences between the ordered quantity, the quantity of materials physically received, and the quantity billed by the supplier. How can business owners be sure that all payments made are in line with the goods received? Most entrepreneurs choose to turn a blind eye, as long as cash inflow exceeds outflow every month. However, raw material costs can reach up to 40% of the total restaurant expenses.

A Good Raw Material Calculation Solution?

Seeing fundamental issues like the one above, ESB directly supports the culinary business sector, especially in the aspect of financial health.

From this experience, more than 90% of clients are accustomed to relying on physical month-end calculations to find discrepancies in raw material costs. As many as 9% do not even conduct physical checks on raw materials at all, and only 1% tightly control the raw material purchasing process using ERP (Enterprise Resource Planning) systems.

This is likely because, until 2018, ERP systems available in Indonesia were only accessible to entrepreneurs with annual turnovers of tens of billions of rupiah, considering their high costs.

But now, there are many ERP systems that are more affordable and can even be rented with monthly payments. To prevent restaurants from slowly dying, the use of ERP technology is highly recommended.

ESB as a business technology solution provider also offers an ERP system, namely ESB Core, to manage operations with multiple branches through a single device.

So, this ERP program will also help you manage inventory. With a centralized system like this, your culinary business can better respond to customer demands precisely and easily!

Conclusion

All types of businesses require careful management. The use of ERP technology is one appropriate step to help prevent losses and give full control to entrepreneurs in running their businesses.

ESB, as an advanced technology solution, can be the right partner for restaurant owners who need affordable software, and various well-known merchants in Indonesia already use it. It's like the saying, "Prevention is better than cure."