Edit
Operations

20 ideas for cutting costs inside your restaurant

As eateries look to survive the next couple of months with little sales, here are some ideas for trimming to the bone.
Photograph by Jonathan Maze

As restaurants contemplate a spring with only a fraction of their normal sales at best, operators have to make things work financially.

Cut costs to the bone, experts say. “We have to get as conservative as possible,” 50-unit franchisee Jeff Offutt said. “Once we get there, it will not be conservative enough.”

We've compiled a list of potential cost-cutting ideas using interviews, social media ideas and suggestions from investment firm CapitalSpring.

1. Be proactive with lenders. Seek any relief possible, including deferrals, accruals and suspensions of interest-only payments. Banks with SBA-backed loans can defer payments for three or six months.

2. Ask for franchisor help. Request royalty or ad fund deferment or abatement. Many have already offered assistance.

3. Consider negotiating a rent deferral, essentially extending the lease a few months.

4. Ask vendors to extend payment terms. Many vendors are offering other types of support. Seek that out.

5. Cut capital spending. Perform only critical maintenance and repairs. Cancel remodel projects.

6. Cut menu items. Focus on easier-to-execute and higher-margin menu items. Get rid of poor-performing items. Minimize the number of ingredients.

7. Reduce the number of supply deliveries. Request fee waivers on minimum orders.

8. Deplete your inventory. Keep the minimum amount needed to manage your business.

9. Reduce labor schedules to reflect lower volumes. Consider day-on/day-off scheduling to keep critical staff.

10. Deploy workers on other tasks, though be careful of dual employment and exempt employee rules. Have them work on marketing, delivery, window cleaning, etc.

11. Shorten hours to only the higher-revenue dayparts.

12. Cut audio and TV subscriptions. You don’t need TV subscriptions if nobody is dining in.

13. Turn off unused grills or other equipment. “Unplug everything you don’t need.”

14. Request fee waivers from banks and other companies.

15. Reduce services. Decrease the frequency of trash pickup, cut window cleaning and power washing, etc.

16. Pay utilities with a cash-back credit card.

17. Turn off the HVAC to the lobby.

18. Turn off automatic payments. That will force you to consider everything you pay for.

19. Negotiate better rates with credit card companies anticipating bigger volumes.

20. Deposit excess register cash into the bank. Go to zero petty cash.

Want breaking news at your fingertips?

Get today’s need-to-know restaurant industry intelligence. Sign up to receive texts from Restaurant Business on news and insights that matter to your brand.

Trending

More from our partners