By Jeff Pence
This time of year is often consumed by projections and deadlines to submit next year’s food budget. Although the numbers may seem enormous, don’t lose sight of the fact that financial success in the kitchen is won or lost by pennies at a time. There are three ways to determine a dining-services budget. The best way is cost-projecting—determining an actual cost per camper and multiplying that figure by the number of expected campers. The next best way is using the previous year’s actual expenses and adjusting for expected changes in the coming year. The least desirable—yet still often-used method—is “winging it,” hoping the money doesn’t run out before the end of summer.
Beginning with the least desirable method, here are the pros and cons of each:
1) The “wing it” method often applies to camps that have a management mentality of “We’ve always done it that way.” For those camps lucky enough to have a fixed camper enrollment, stable expenses, and satisfaction with the previous year’s service, this is a workable model. If, however, enrollment numbers fluctuate and food and labor costs rise, or if last year’s food service was less than noteworthy, then you need to change the approach.
2) Reviewing the previous year’s budget method is viable as long as one can predict the new variables. Before addressing enrollment numbers and changes in food and labor costs, first ask, “Was I happy with the food service last year?” The most effective camps evaluate budget costs with a return-on-investment mentality. The business of camping is all about filling beds and changing lives. Every budget category should be reviewed as “Did we get a good return on our investment?” Each category is competing for the same “spendable” dollars.
- Which expenditures generate the best return (i.e., camper days or filled beds)?
- Are campers happier with new mattresses or a second lifeguard for waterfront activities?
- Will enrollment increase by remodeling the dining hall or repaving the entrance drive?
This type of “return-on-investment” thinking keeps a camp healthy and growing. Those staffs that want to use a past income statement as a blueprint for future operations should make sure that what is being done today will take the camp where it’s expected to be down the road.
3) Cost-projecting is certainly the most time-consuming method of budgeting, but is well worth it. Once the kitchen is properly staffed, determine food expenses by “costing out” each component of the meal. Depending on the expertise of the staff, the numbers can be determined by portion-costs or production-costs. An example of portion-costing is a 4-ounce serving of chicken breast at $4 per pound = $1 portion-cost. An example of production-costing is spending $38 a case on chicken to feed 25 campers; the portion-cost per serving, then, is $1.52 (38/25). One shortcut to figuring indirect food costs (i.e., seasoning, condiments, and self-serve tabletop items) is to find an average cost and apply it to projections. For example, add 20 to 25 cents per meal, or 5 to 10 percent of the total costs to cover the indirect food costs. Most staffs will find that many items have a similar cost per serving, so generalizations can be used to save time (i.e., all sides of vegetables average 40 cents per serving, or all dinner rolls with butter average 17 cents). Once the menu is analyzed to arrive at an average cost per meal, it is easy to figure the projected budget by multiplying the cost per meal by the number of camper meals served per week, month, or season.
No matter which method is used to project dining costs, each will give a benchmark to compare actual to projected costs and keep the camp on track to financial success. A weekly cost analysis is recommended to stay in control of food expenses. A simple beginning-inventory plus purchases minus ending-inventory will give a real-time cost of goods sold (or food costs). Divide that figure by the number of meals served, and that is the actual cost per meal. Any significant variance from projected costs should be investigated in a timely manner to maintain control of expenses. Controlling labor expenses is easy to track. Some kitchens are staffed by professional chefs with a full-time support staff, while other kitchens are run completely by volunteers. No matter where your camp falls in this range, be sure to include hidden costs, often up to 30 percent additional, like unemployment taxes, FICA employer taxes, and insurance costs and benefits directly related to the food service.
The key to effectively control dining expenses is to use the numbers as a tool for financial success. Apply the Marine Corps mantra: “analyze, adapt, and overcome.” No matter how well-intentioned your program, the long-term effects of your efforts will only be realized if you survive financially each year to serve again.
No camp ever plans to fail; often it just fails to plan. Today's campers have a higher expectation for food quality and variety than just a few years ago (not to mention diets and ever-increasing food allergies). Mealtime is the one time at camp where all campers sit together. Young or old, campers or staff, three times a day they gather under one roof for food, fun, and fellowship. The quality of a camp’s mealtimes is a barometer of the overall quality of a camper’s experience. Follow the success guidelines of “plan to work and work the plan,” and you will have a great camp season ahead.
Jeff Pence is Operations Manager with Signature Services Corporation in Dallas, Texas. He is a University of Illinois Business graduate in Organizational Behavior with 30 years of experience in food service and camp dining. He may be contacted at email@example.com .