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Operations

How to reduce restaurant expenses

Photograph courtesy of Restaurant Technologies, Inc.

Operators have always watched costs dutifully in their restaurants, but these days, the impact of controlling costs can be even more pronounced. As the industry waits for the day when it can erase social distancing guidelines and seat guests to maximum capacity, controlling costs remains paramount.

Every restaurant has special ways of controlling costs, and applying them may help protect margins until those brighter days of increased capacity finally arrive.*

Adopt a mentality to save, not cut

When times are tough, it’s natural to look to make cuts from the budget. However, focusing on saving instead can be more beneficial for businesses long term. For example, reducing employees’ hours or getting creative with scheduling may save money just like cutting these employees via furlough or termination. However, keeping them on staff also protects restaurants from the future costs associated with recruiting and training the eventual replacements for those released employees.

Naturally, operators always need to be mindful of costs, but if there’s a way to protect against unnecessary future expenses related to a cut by saving, now’s the time to consider applying those measures for the long-term health of the restaurant.

Review the menu and ingredients

Every menu has those items that sell well and those that don’t. At the same time, every menu has those items that turn a high profit margin and those that are ingredient expensive. As operators navigate their restaurants through these turbulent times, businesses can benefit from a focus on the former in both categories—items that sell well and items that turn a high profit margin.

Streamlining the menu makes sense in many cases. As the guest list shortens, so too should the menu. This might also be a time to look at distributors’ pricing to see if it is the optimal choice, or if another ingredient option—available from the same distributor—could accomplish the same thing at a reduced price.

Review every expense

Operators may think they’re already doing this, but many restaurants take some expenses for granted instead of taking a deeper look.

For example, to manage the budget, are operators simply monitoring a bank account, or are they running a thorough financial statement and line-item review of all expenses? The latter is certainly more work, but in periods such as this, it’s necessary. This is also a good time to review labor scheduling. Utilizing a staffing software solution can provide operators with estimates of the ideal staffing size for any given day and also alert managers to employees’ full-time status so they’re aware of who requires an offer of healthcare coverage and who does not.

Train and retrain

If a certain menu item is routinely more unprofitable than it should be, now’s the time to look at training. Is the kitchen staff over-portioning in prep or in plating? Now’s the time to focus on retraining as staff has more time to focus on getting each menu item correct. Every instance of wasted product is more pronounced now, so be meticulous with staff to ensure they are creating the best product possible for guests and the bottom line.

What goes in the trash still costs money

Looking to reduce expenses? Start by reviewing what staff throws away. A restaurant’s dumpster is often a treasure trove of wasted capital. Effective training can protect businesses from wasted food, but even if staff prepares everything correctly, there are still ways to reduce the garbage expense.

First, consider reducing the frequency with which the trash is removed. After all, if the business is serving fewer guests, it stands to reason that it is creating less trash. This could allow operators to cut their trash pickup in half. Second, consider recycling alternatives for cardboard, bottles, etc. All of this ensures these materials will not end up in a landfill and can reduce trash usage even further. Research from Enevo shows that operators can reduce their trash expenses by as much as 15% if they are proactive in their strategy. To do anything else is throwing money away.

Go digital

From digital menus to digital signage, replacing existing paper articles with digital options can reduce long-term printing costs. Many restaurants today are even putting QR readers on the table, allowing guests to download the entire menu to their phone from the reader. This saves them the cost of providing menus while still allowing guests to order their favorite menu items.

Get active socially

Looking to reach customers in a cost-effective way? Social media is the ticket. Social media platforms are a great way to let people know the restaurant’s most-updated hours, as well as if reservations are required. From there, operators can expand to use social channels to highlight promotions and offers designed to bring new guests through the door and keep old regulars coming back.

Overcoming today’s challenges

The current environment is tough, but implementing some of the tips presented here can help. In addition to the above guide, Restaurant Technologies can reduce costs and support businesses through automated cooking oil, and hood and flue solutions.

*Nothing herein constitutes legal advice or other formal direction or guidance of any kind. The information offered herein is offered for general information purposes only.

This post is sponsored by Restaurant Technologies

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