Five cost-saving ideas for restaurants

Restaurants are one of the most difficult businesses to own and operate because it is so easy to become overwhelmed with operation costs. For this reason, creative penny-pinching can become somewhat of an art form. Here are five simple ideas to cut costs and raise profitability for your establishment:

  1. Teamwork is key in businesses with “so many moving parts.” Staff meetings bring workers together to improve systems and procedures, generate ideas, and solve problems. However, employers may be required to compensate employees for attending these meetings. With a staff comprised of so many part-timers, this can be costly. A cost-saving alternative is to hold staff meetings with representatives from each employee group. Instead of having the full staff attending, invite one bartender, one wait staff member, one kitchen worker, and your managers. This could be a way to continue the benefits of team meetings while cutting down on the expense and scheduling difficulties.
  2. If you are having some challenging times paying food vendors, you may reduce your food deliveries by offering a limited time special menu for a few weeks. You can have a few options (requiring a limited supply of ingredients) and promote it in a positive way. It is easy to align your limited time menu with a holiday promotion or a local festival or event.
  3. Promote the lowest cost and highest profit margin items the most. Place these menu offerings in the upper right corner of the menu and use the center, left-side for high cost items like lobster and salmon. Encourage wait staff to promote these higher profit margin and lower cost menu items.
  4. Cut your energy bill with motion sensors that automatically turn lights on and off in bathrooms and storage areas. Install compact fluorescent or LED bulbs that draw less electricity. There are many incentive plans and grants available for energy conservation. Contact your energy supplier and NYSERDA for programs in your area.
  5. Cross-train employees to do several jobs. They will enjoy the variety and additional hours. You will save in disability and worker’s compensation costs by having fewer part-time employees.

Bonus Tip 1: A 2% increase in sales will affect your bottom line in the same way as a 10% reduction in food costs. Educating your front of the house staff to promote sales and upsell customers will be an effective strategy to help the bottom line. Educating your waitstaff is likely to increase sales by far more than 2%, so it will give the restaurant owner a significant ROI. You can do this by allowing the wait staff to taste the new menu items and wine-food pairings. There is nothing worse than a script. Knowing the menu items and being able to genuinely recommend items from personal experience will help your staff build a loyal customer following.

Bonus Tip 2: Consider offering a fixed price “package” option. If you creatively combine your highest profit items in a meal that appeals to value-oriented customers, you will improve the bottom line.