10 ways to cut unwanted costs in Restaurants

October 11, 2019

Find out 10 ways to cut unwanted costs in your restaurant and increase your restaurant profit marginally without cutting either the quantity or the quality of the food

If you think opening your dream restaurant in a city of your choice was the toughest thing to do, then you are gravely mistaken. The real speed breakers lie ahead as maintaining a restaurant always pose more challenges than starting one.

Many restaurant businesses fail to garner much profit even after having a decent number of customers, the reason being their cost management. If you are spending a lot of money on unwanted things then your restaurant is bound to have a lackluster fail in the near future.

If your restaurant is suffering from the same problem then you are definitely at the right place as we are going to discuss 10 ways to cut unwanted costs in restaurants. These points will help you increase your restaurant profit marginally without cutting either the quantity or the quality of the food. So, let’s begin our journey to find and eliminate your additional costs:

1. Better Training Of Employees

Training your employees is the first thing that you should do as a business owner. Most instances of losses are recorded when untrained employees tend to work directly in the restaurants. Each and every one of your staff should be trained to minimize the restaurant’s losses and keep an eye on unwanted costs. Having a trained team helps in other ways too as a trained staff member knows how to deal with all types of customers. These small things also help in spreading the good word about your restaurant:

2. Use Weather At Your Advantage

Don’t waste electricity in running air conditioners in winters or rainy seasons as there’s already enough chillness in the air. Use the outside weather to your advantage whenever you can. This will help you cut your electricity consumption hence decreasing your running costs as well. Not only the cold weather, but warmer one could help you as well, as you can shift some tables outside in winter to have people enjoy the sunshine and street view. Also, save electricity by turning lights off in the daytime. These changes will help you decrease your electricity marginally.

3. Reduce The Number Of Freebies

Reduce the number of free items you are giving to your customers in the name of marketing schemes. They add a lot of negative costs to your business as well. These marketing schemes not only drag your business profits down but also give your customers a bad habit of having free products. This scheme could help you for a short time but these types of marketing tactics are not always good in long hauls.

4. Inventory Management And Optimization

Inventory management is one of the most important parts of every business. This provides you a sense of tracking on your existing items so that you could know which things are costing you more. For example, if you are buying chicken for R27 and Cheese for R65, you might think cheese is costing you more hence you would try to control the use of cheese. But with inventory management software, you can see if you are buying cheese as frequently as chicken or not. So, all your restaurant inventories, however small you may think, must be optimized via an inventory management system.

5. Introduce Employee Rewards

Rewarding your employees provides a sense of competition in your staff so everybody will give their best to your restaurant. Setting goals like saving most electricity or saving most ingredients can help you cut unwanted costs while giving them a reason to work harder. The feeling of competition gets the best out of everyone. You can introduce concepts like the employee of the month, best-saving employee, employee of the year, etc. Also try to give them actual physical rewards such as movie vouchers, travel tickets, etc.

6. Automating Processes

Use of Point of Sale system eliminates the risk of human errors from your calculations. This is the most efficient way to cut your losses and have a correct balance sheet up to 2 decimal points. There are a lot of machines as well as software that could help you cut unwanted costs marginally, some of them being billing system, POS system, kitchen appliances, inventory managers, etc.

7. Reduce Wastage

Reduce food wastage by controlling portion size while serving. You can start by introducing a budget-friendly version of each dish for kids so that your food doesn’t go waste on children’s plates. As you start giving smaller portions, you will see a decrease in your kitchen costs with immediate effect. Also, the wastage of smaller products such as tissues, disposable containers, cleaning, and toiletry kits also increases your restaurants’ losses so keep a check on those as well.

8. Use Free Alternative Marketing Platforms

Marketing of your business is an essential part of the growth but spending a fortune on it is probably not that good for your business. If you are a new joint in town, then it’s important to spend on both offline and online marketing but after a while, you should restrict these spendings. There are a lot of alternatives that you can opt for such as creating facebook pages and interacting with groups and communities online. Also, you can ask reviewers to come & taste your food and then spread the good word for you.

9. Switch To Energy Saving Equipments

Switching to 4 or 5 stars rated equipment can help you save a lot of electricity, hence saving you from potential losses. Your 5 star Air conditioner or Refrigerator could help you cut your bills in half and help you clean the environment as well. Along with these, you can also go for installing solar panels on the roof to power your lights with it at night time. It is a great option for restaurants with access to direct sunlight. Your energy-saving equipment might cost you a bit to set up but it will prove to be a lifesaving option in the long run.

10. Maintain A Daily Accounts Ledger

Maintaining your accounts is one of the most important aspects of cutting unwanted costs. Here you can review your past purchases to see if you are buying something not that useful to your business. Also, you can get these ledgers audited by accountants to get the maximum return on your investments too. Having a dedicated billing system for maintaining your day to day accounts is the best option you can get. There are a ton of POS system providers that provides you with the same.

These were some of the major points of consideration for any restaurant to cut their costs up to 50% in a matter of days. You can make a checklist and find out which of these problems your restaurant has and what could be a possible solution for each of them.

The fastest solution to decrease your cost in a restaurant is to get a restaurant management system. So, don’t wait anymore and start taking your business to new heights.

by Yaseen Amod of Ideasvoice SA