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Smart Cost-Reducing Strategies for Restaurants

Smart Cost-Reducing Strategies for Restaurants

While there is much talk about ways of losing money in the restaurant business, in order to come on top of the harsh competition, restaurant owners today need to improve both their cost cutting and revenue-increasing programs. Here are some of the smart money-saving strategies for restaurant owners that don’t compromise the guest experience.

Reduce the Waste

Since an average restaurant throws more than 35000 kg of food a year, watching what goes to waste is the first and the most important strategy. Start with kitchen prep lists. Every cook should have this one-page sheet telling them how many ingredients to prepare based on the day and daypart’s par. Without such a list, cooks tend to over prepare, which results in food waste. In addition, you should implement digital inventory software like BevSpot, which is able to identify ordering trends and suggest ideal quantities. Finally, train your cooks to use the FIFO method when managing the ingredients.

Improve Staff Management

The second facet that is siphoning money away is staff management. Start by reducing turnover by rewarding high-performing employees through an employee of the month program or gift cards. In addition, increase the table coverage without increasing the staff by introducing tablet menus. Guests can browse through digital menus, send orders to the kitchen, and even use the tablet to pay. Such a technology frees up serving staff to cover more orders, lowering the labor cost.

Promote Paperless Environment

Tablet menus don’t just save on labor, but also cut costs associated with printing countless menus, table tents, cocktail cards, and week-specials. In fact, turning to tablet menus and digital signage can even appeal to tech-savvy guests. According to a Toast POS report, 73% of diners agree that tech improves their restaurant visits. In addition, a report from the National Restaurant Association even shows that 1 in 3 customers are specifically looking for restaurants with digitally enhanced experience. Not to mention, guests hate table tents and other paper ‘spam’ on the table.

Insist on Regular Maintenance

Even if your kitchen full of energy-efficient appliances, regular maintenance is essential for energy saving. A maintenance calendar will ensure that every appliance is in the top shape so it always performs at its best. Apart from cleaning surfaces, have your staff regularly check the oven, refrigerator, and steamer seals, identifying those which need replacement. The same goes for tables, chairs and sofas – furniture repair and restoration is more affordable (and more stylish, for that matter) than buying new pieces. Also, consider polyurethane coating for your kitchen cabinets and countertops, as it is highly resistant to temperature, chemicals, and scratches, making the cleaning and maintenance much easier and less labor consuming.

Audit the Shift Change

According to Parkinson’s Law, “work expands so as to fill the time available for its completion”. This means that when employees are given less time for a task, they’ll work faster and get more work done than they are currently doing. In a restaurant, you can tell if the employees have too much time by observing their pace and sense of urgency during the first and last 30 minutes of every shift. A relaxed, casual pace may indicate that they could run through the same amount of work on their shift with fewer hours on your tab.

Resort to Cooperative Marketing

In addition to adopting digital signage and tablet menus, you can digitalize even further and also cut cost by employing collaborative marketing tactics. Message local businesses on Facebook, asking if they’ll share one of your posts, and offer to share theirs. Also, contact radio stations in your area about airing a weekly or monthly radio shows like ‘Ask the Chef’, where you provide expert advice and get the free exposure. The whole point is in finding free ways to raise your exposure by benefiting both parties.

Clean Beer Lines

Bartenders often pour draught beer by tilting the glass to the spout while foam flows down the drain until the glass is completely full. On average, restaurants waste from 5 to 10% of draft beer purchases by allowing them to go literally down the drain. The right temperature, air pressure and unmaintained beer lines all affect the yield you get from each draught beer keg. Ask your vendor to clean and service your beer lines regularly, and make sure your bartenders know how to pour beer correctly without waste.

Count the Cash on Hand Every Shift

Restaurants handle many cash transactions, so they need to keep a hearty amount of cash on hand for making change, paying tip floats, and other petty cash expenditures. This constant movement of cash makes it hard to account for losses, so you need a proven method for tracking cash on hand. The first rule is never mix cash received from sales with your cash-on-hand stash. Another one is to keep a constant cash supply-on-hand total that is big enough to meet daily demands for making change.

Many restaurants are losing money because they are unable to keep their costs and turnover under control. A combined cost-control and staff management techniques, along with digitalization of the ordering process, can extend the proverbially tight margin of the restaurant business and strike a healthy balance between your finances and expenses.

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by Lillian Connors // Lillian is a senior business consultant and the co-editor at She's mainly focused on business optimization and sustainable growth. In her leisure time, she likes to lose herself in a good book or drink a couple of hoppy pale ales.

Opinions expressed by contributors are their own.