Stop Storing Your Cash on the Shelves

Let me ask you a question: If I walked into your restaurant right now and offered you a stack of one-hundred-dollar bills, what would you do with them?

Would you put them in the bank? Or would you stack them on a dusty shelf in the back of your dry storage room and leave them there for three months?

It sounds ridiculous, but that is exactly what most restaurant owners do every time they place an order.

One of the hardest lessons to learn in this industry is that Inventory = Cash. When you see a fifty-pound bag of flour, cases of olive oil, or stacks of napkins sitting in storage, you need to retrain your brain to see stacks of cash that are tied up and unable to work for you.

The Bulk Buying Trap

We have all fallen for it. The sales rep from the big food distributor calls you up.

"Hey Dave," they say. "If you buy 10 cases of tomato sauce today, I can knock $2.00 off each case."

You do the quick math. "I save $20! That’s smart business."

So you buy 10 cases. But you only use one case a week. That means for the next two and a half months, you have hundreds of dollars sitting on a shelf gathering dust. That is money you can’t use to pay payroll. That is money you can’t use to fix the broken A/C unit.

You trapped your liquidity in a tin can to save twenty bucks. That isn't smart business; that’s the Inventory Trap.

Food Should Be a River, Not a Lake

A healthy kitchen should have high Inventory Turnover. This means food comes in the back door, gets cooked, and leaves out the front door (in a customer’s stomach) as fast as possible.

You want your inventory to flow like a river. Most struggling restaurants treat their inventory like a stagnant lake.

The "Just-in-Time" Philosophy The best operators practice "Just-in-Time" ordering. We want the fish to arrive the morning we serve it. We want the produce to run out right before the new truck arrives.

Does this feel scary? Yes. It requires you to know your numbers. But it keeps your ingredients fresher—which makes your food taste better—and it keeps your cash in the bank until the very last second.

1. Calculate Your Turnover

Walk into your walk-in cooler. Look at that case of lemons. When did it get there? If it has been there for more than 4 days, you are over-ordering. If you are sitting on dry goods for months "just in case," you are hurting your cash flow.

2. Determine the "Skeleton" Inventory

You need to find your "Par Level"—the absolute minimum amount of stock you need to survive a busy Friday night. Most owners operate with a "Safety Blanket" of 20-30% extra food because they are terrified of running out (86'ing) an item.

While running out isn't ideal, throwing away spoiled food or sitting on dead cash is worse. Get comfortable getting close to the line.

3. FIFO or Die

This is Day 1 culinary school stuff, but it saves bank accounts. F.I.F.O. stands for First-In, First-Out.

When the new milk arrives, the old milk moves to the front. When the new tomatoes arrive, they go under the old ones. It requires discipline. If your staff is lazy and just throws the new box in front of the old one, the old one rots. You end up paying for that product twice.

The Bottom Line

A packed pantry might look like "abundance," but to a business consultant, it looks like inefficiency.

Lean inventories force creativity. They ensure freshness. And most importantly, they free up the capital you need to actually grow your business.

Is your dry storage costing you a fortune? If you are tired of working hard but staying cash-poor, it’s time to look at your purchasing strategy. At Dave’s Cuisines, we help you streamline your ordering so you buy only what you need, when you need it.