In today’s business climate, restaurant owners and managers face the challenge of reducing costs without compromising quality and the guest experience. Due to restrictions on operations and increased spending on maintaining sanitation and hygiene, many restaurants are experiencing a sharp decrease in profits. Here are some ways you can streamline your expenses to achieve profitability while also maintaining quality.
For restaurant owners and managers, it has always been difficult to reduce expenses without sacrificing the quality of the food and the satisfaction of the guests. However, with the emergence of the “new normal,” operational limitations and increased costs associated with maintaining cleanliness and hygiene have resulted in a significant decline in profits.
Operating costs for the food service industry involve payroll for staff, rent, and food costs, among others. Some costs are fixed, while others are variable and semi-variable. Operating expenses, on the other hand, are the maintenance and administrative costs of running the business on an everyday basis. Operating expenses for a restaurant include POS, restaurant tech licenses, utility costs, and kitchen equipment.
Restaurant cost control is an analysis of the business’s financial performance, setting achievable and realistic financial benchmarks. This process starts by setting projections which are then compared to the restaurant’s actual performance. Cost control does not necessarily mean cost-cutting. Reducing food quality, advertising budgets, and maintenance will help sustain the bottom line but will eventually diminish the guest experience. Cost control practices are meaningful only when they are well thought out or planned meticulously with an aim to maximize profits, evaluate current processes, and optimize the best-in-class experience.
To reduce restaurant expenses, consider the following tips:
Reduce Excess Inventory — To limit waste and spoilage, inventory on hand must be reduced. With limited available inventory, the staff will also be able to handle and portion the products better.
Make The Most Of Your Products — By using every last bit of food and reducing wastage, costs can be reduced to a great extent. For instance, use onion skin, carrot tops, chicken bones, and celery leaves to prepare a broth.
Calculate Food And Drink Costs — Check the cost against the menu prices. Find out if the costs are leading to a profit or loss and if there is any way you can adjust the menu to remain profitable.
Use Software For Tracking Expenses — Good software can simplify the process as it integrates inventory, sales data, payroll costs, and other operating expenses.
Streamlining Orders — By working with a single supplier who has the capacity to supply most of the products you need, you can lower overall prices. Enter into a prime vendor agreement that promises lower prices for the stipulated period.
Examine Employee Schedules — Restaurant owners must identify the busiest and slowest times and adjust their work schedule so that employees are not idle, eating into their bottom line.
Pre-portioning Ingredients — Portioning ingredients ahead of the preparation time speeds up cooking time and curbs additional expenses due to overly generous portions.
Cross-train The Staff — Cross-training employees will reduce the number of staff required. When one employee takes on a range of tasks, money can be saved to a great extent.
Use The FIFO Method — Utilize the food and ingredients before their expiry date. If the oldest produce is placed in front, the staff will use it up first and reduce the chances of waste.
Optimize Energy Usage — Energy optimization can be achieved by following just small steps that require no additional effort.
Implement a free online ordering system — Restaurant owners need not invest a lot of money in a customized online ordering system. They can use third-party food delivery apps or even develop their app to offer free online ordering.
Leverage Social Media — Social media platforms are free, and they offer a great opportunity to connect with customers. You can offer discounts, loyalty programs, and other promotions to keep your customers engaged.
In conclusion, cost control is an essential aspect of restaurant management that helps owners and managers to keep their finances in check. Implementing these tips can help you reduce expenses without compromising quality and guest experience.
By reading this blog, you would have gained insights into effective strategies for reducing restaurant costs while maintaining operational efficiency. Should you require further guidance on restaurant digital marketing, feel free to reach out to us.
But did you know that you can cut costs on hotel stays by opting for service apartments instead.
You get the facilities of a hotel along with the comforts of a home.
There are many service apartments in Mumbai that you can stay in if you go on business trips to the city on a regular basis or are traveling in a group for an extended stay.
Service apartments offer you unmatched privacy, often come with a fully-equipped kitchen and laundry facilities, and help you cut costs on business travel and long-stay accommodation expenses.
Availability of a Fully-Equipped Kitchen: Unlike a hotel, a service apartment comes with a fully-equipped kitchen, which means that if you would rather cook yourself than eat out and spend extra money, you can do so.
Centralized Locations: Some accommodations that offer both long and short stay apartments in Mumbai are centrally located, giving you easy access to travel to any part of the city you need to go without spending large sums of money on transportation.
