canteen
Use financial management strategy to ensure success for the year ahead

With increasing pressure on school canteens to turn a profit and so provide a source of income which can be used to boost the school’s coffers, effective financial management strategies are more important than ever.

The old days of canteens merely being expected to break even seem for the most part long gone – and those that make a loss are more often than not shut down by schools which simply can’t afford to keep them running.

No wonder then that government bodies and education departments across Australia are providing financial management assistance and training workshops for canteen managers and staff.

Just like any operation which seeks to make a profit, canteens need to set budgets, minimise costs and monitor their progress in order to ensure success. Canteen managers should therefore meet with school staff responsible for canteen finances at the beginning of term one and work out financial targets for the year, based on last year’s results plus any expected significant changes such as increased enrolments or the need for new equipment.

Canteen staff can make a valuable contribution in this regard, so make sure they’re included in the discussions – they know better than anyone else the current state of equipment maintenance and which items may need to be replaced during the year. This will make it easier to accurately estimate necessary expenditure, and by pooling information in this way, budgets can be more realistically set.

The focus of the meeting should be to set a target for the desired profit to be generated by the canteen. With this determined, it’s then possible to work out how much you need to make in sales and then work out the minimum markups needed over your wholesale food costs.

Once these goals have been identified, it’s the canteen manager’s job to break them down into targets to be met each term and even each week.

Because these will be based at least in part on the expected costs of food sold, it’s imperative to accurately cost and carefully plan your menus.

Freshly made menu options may include several different ingredients, plus packaging – all of which needs to be individually measured and costed if you’re to come up with an accurate cost price.

Take for example a chicken salad sandwich. If the sandwich uses two slices of wholemeal bread, the cost of the bread will be the cost of the loaf, divided by the total number of slices, multiplied by the number of slices used.

The same formula can be applied to each ingredient and packaging component to calculate the total cost of the sandwich – providing that you use standard measuring equipment to measure the amount used and consistent units of measurements to calculate the cost.

When it comes to setting your selling price, remember to apply your minimum markup across the board to all menu items. The alternative – to mark some items up and others down – might be tempting in order to create lower-cost green items vs higher cost amber ones, but it will add an extra level of complexity that you’ll likely not have the time to manage.

The other important consideration is that the menu must be affordable for your students – items which are too costly need to be replaced with affordable alternatives to ensure they ‘move’ and are not sitting around providing you with unwanted stock.

Given that many canteens now create their own meals inhouse, it’s also important to standardise recipes and post these up in your food preparation area. You need to ensure consistency of portion sizes and ingredients in order to cost out each recipe effectively, just as a commercial foodservice operation would do. It’s also a great idea to put up photos of each step along with one of the finished product to help guide staff.

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