This week on Tent Talk we are joined by Food Cost & Strategic Sourcing Consultant, Sarah Delevan. Sarah works with food makers, restaurants, caterers, and retail markets throughout the US to help them become and remain financially sustainable. In this episode Sarah provides tips on sourcing quality ingredients, shares keys to understanding your food financials, and identifies mistakes food-driven businesses can avoid.
A good food convert
Sarah’s career in the food business started because she was looking for an answer. After years of struggling with painful skin problems, she sought the help of a nutritionist who placed her on a strict diet void of processed foods, soy, and sugar. Sarah’s skin responded immediately.
It just so happened that Sarah had also been reading The Omnivore’s Dilemma during this time. Her mind had been changed about food. “The combination of those two things, it was just like how could I not support this industry – particularly with local farmers and organic sustainable ranchers. I just felt compelled to join and to be a part of it,” says Sarah.
Know your costs or it’ll cost you
Now as a food financials consultant, Sarah spends her time helping clients identify ways to retain their hard-fought earnings. While there are many ways to approach food financials, Sarah likes to begin with truly understanding the cost of ingredients. By costing out all ingredients in each recipe, food makers are able to get a handle on how much they are spending on each dish or product. From there they can determine a price that will allow for a profit margin.
Sarah says one of the most common mistakes she sees is that food makers don’t know what they’re spending on ingredients until after they’ve been purchased. Also, many food makers don’t have a system for knowing the quantity of ingredients required for a production run, so they have to go to the grocery for last minute items, which drives up food cost. It’s often a lack of information that causes food makers to dip into potential retained earnings.
Be strategic about your sourcing
Sarah also assists food makers source quality ingredients for their recipes. For new food business operators, setting up relationships with vendors and sourcing specific ingredients can be a challenge. When food makers are strategic about where they purchase their ingredients, it helps with the consistency and quality of their recipes and keeps their food costs down.
Sarah recommends three things every food maker should do before purchasing ingredients:
- Clearly state your ingredient standards – If you are committed to local, organic, or biodynamic ingredients, that is going to impact your selection of vendors.
- Know is your volume – Identify how much you will need each week.
- Identify your needs – Figure out whether you’ll need additional services such as delivery.
Once you’ve identified your standards, volume, and needs, you can reach out to vendors and see if they can meet your requirements.
Numbers don’t have to be scary
Sarah recognizes that talking about financials can be uncomfortable, especially for small business owners with a mission. “You’re trying to make a difference in the world. And to feel like you could also make money by doing that is a little shameful. It feels a little dirty. But the alternative is that your business doesn’t exist and you can’t do these good things you’re trying to do.”
If you don’t feel comfortable handling financials by yourself get help! Whether talking about money feels awkward, or you aren’t good at math, ignoring the numbers won’t take them go away. Find people or tools who take the scary stuff out of your hands and can help you. A little number-crunching can impact a small business owner’s life in a big way. “Incremental change is easy to make and makes a huge difference to your bottom line and your life enjoyment,” says Sarah.
Where can I listen to Sarah’s full episode of Tent Talk?
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