In a study by Cornell and Michigan State University, 70% of the restaurants in the study had closed after ten years of being in business. This means that watching and cutting costs could be the difference between sinking, or staying afloat. While these tips may not be the end all, cure all for your business, they can definitely help cut costs immediately.
1) Cut Down on Deliveries and Suppliers
If your restaurant is receiving multiple deliveries from multiple suppliers or even just multiple deliveries a week, try to cut that down to just once a week. If you are using multiple suppliers, try to find one that can be your main supplier. It is estimated that large chain restaurants use one supplier for 80 to 100% of their food products. Ordering from one supplier will make it much easier to cut back the amount of deliveries you have per week and will also give you room to negotiate on prices.
When you first seat your customers, don’t automatically bring water to their table. Wait for them to order drinks or ask for water. While this may cut back on your water bill, it is more about persuading them to order soda or alcoholic drinks to help your bottom line.
3) Use your Inventory
Don’t throw money away. If you have a surplus behind the bar, then offer some drink specials using the extra liquor or beer. If you have extras stocked in the kitchen, then work those foods into your weekly special or offer a new weekly special to help purge what you have left. Just like you were taught to finish what is on your plate, finish what you have in your kitchen.
4) Menu Portions
While you could cut back on portions, it’s more important to control your portion sizes. Plus, your customers will only complain if you are giving them too little. It may seem to your employees that giving a little extra to a customer doesn’t matter, but a handful of extra portions adds up and will end up costing you money. In fact, this is another reason why chain restaurants see so much success.
5) Labor Costs
You don’t need to cut back on the number of your employee base, just know how to use them efficiently You should schedule fewer people on your less busy days and more on your busier days. Know which of your employees perform the best. Make sure to utilize your best employees on the days that you will need them the most. This way your restaurant will not be overstaffed, and in turn you will not be needlessly paying your employees.
Keeping simple but strict policies in place can keep you from throwing your money around. And while it may not seem desirable to have to be so tight with your budget, just remember how competitive and difficult the restaurant can be. If you truly want to succeed you need to do everything in your power to keep money in your wallet.
We’d like to know how you are cutting costs. Leave us a comment below!