Long after the successful launch of your restaurant – after the planning, the renovations, the staffing, and the stocking – money will still be a major concern. No matter how successful you become and how long the waiting list is for a seat at your restaurant, long-term growth is largely dependent on saving money. Creating a money-savings plan is just the first step; implementing these cost-saving measures over time is the big challenge. This is a common theme in periodicals aimed at smaller businesses, in general, and restaurants, in particular. The Houston Chronicle, for example, offers advice for small businesses, including restaurants, and suggests ways to cut costs.
#1 Money Saver: Portion Control
Portion control is probably the #1 area to focus on when looking to save money in your restaurant. Portion control is all about consistency; if one day your customer is served a salad covered with chunks of feta cheese, and the next day there is only a handful of feta flakes, portion control is not being regulated properly. Chain restaurants are famous for their portion control, and not in a bad way either; for when you control your restaurant portions, your customers will appreciate being able to count on the same portion every time they order their favorite dish, and you will be more on top of your costs.
Although it may seem tedious, have your kitchen staff weigh and measure portions and ingredients; you can’t just wing it and expect consistency. Every item on your menu should have a controlled portion size to keep food costs in check. Professional portion control scales are an intrinsic part of any cost-saving plan. Train your kitchen staff to use the correct serving utensils (ladles, portion control spoons) and dishes; post a chart that breaks down every menu item, with amounts and quantities (this is particularly helpful for new staff members). This list can include exactly how much food goes with each item, say, six sticks for your famous Mozzarella Sticks appetizer, or eight cherry tomatoes for your signature Cucumber, Tomato, and Avocado Salad.
Golden Rule: Throw Away Nothing
Wasted food is a concern across our planet and the “Throw Nothing Away” rule should be implemented and strictly enforced at your restaurant. Stay on top of expiration dates by using the oldest inventory first. In addition, a trusted member of your staff should know the inventory inside out – including the contents of your walk-in refrigerator. Ordering the right amounts of produce is also important. You don’t want your chef throwing away boxfuls of mushroom each week because you ordered too much.
You can reduce food waste by using as much of each item as you can. For example, use your chicken bones and vegetable scraps to make a broth. In addition, take a look at how much food your servers are throwing away after each meal they serve. If it’s excessive, your portion sizes are too big. By noticing how much food comes back to the kitchen and how much food is taken away in doggie bags, you can establish consistent and appropriate portioning levels.
Constantly Shop Around for New Suppliers
It is a habit of most restaurant owners and managers to remain loyal to two or three vendors. For one thing, suppliers and owners tend to form long-term relationships, and for another, looking for new vendors can be very time consuming. But shopping around for new suppliers periodically can yield surprisingly lower costs. These savings might seem negligible at first and not worth the effort, but they can quickly add up over time. In addition, there is always a danger if your regular vendors taking your business for granted; so, if a supplier knows you’re shopping around, he’s more likely to go out of his way to entice you with a better deal or a hefty discount.
Investigate Your Labor Costs
Labor costs should be monitored, especially in a smaller restaurant where costs add up quickly. Shift managers may be wary of cutting labor during slow shifts – so as not to be caught in the lurch if business suddenly picks up; however, if you look at the big monetary picture, you may see the value of cutting back. Staff schedules – for front- and back-of-the-house staff – should be the result of forecasts that take past sales and current reservations into consideration. In other words, don’t simply copy-paste schedules from week to week.
Check that your employees are clocking in and out when they are supposed to so you aren’t overspending on payroll; and, if we’re already talking about staff, you have to consider the unpleasant topic of employee theft. Given the opportunity, staff members could view your restaurant as a meal ticket and take advantage of lax management. Implement a good system to track your food costs, and keep a running inventory to know exactly where your food is going. If you do offer staff members a meal before or after their shifts, provide them with a set menu to avoid giving away your costlier items. In addition, take steps to improve employee retention rates; a high turnover rate can deeply cut into profits, as training new employees costs money.
What About High Wait Times?
High wait times are caused by overall poor customer service. How long your customers have to wait for a table or service, for instance, affects your profit. While that may seem counter-intuitive – because we naturally assume that a busy restaurant is a profitable one – it pays to look at why you have long wait times. The time that customers must wait before they sit down, and the time they wait again until the server takes their order is “dead” time. Similarly, the bottleneck that grows if your kitchen is slow and guests are waiting for their food is also a profit-eater. Although earlier we mentioned over-staffing as a drain on your finances, the opposite can be true, as well. If you don’t have enough staff on hand to take care of your customers, table turnover slows down (while the number of angry customers grows).
Stay Vigilant to Keep Your Restaurant in the Black
To increase your profit, it’s vitally important to manage your expenses and to know what’s coming in and going out on a weekly basis. The National Restaurant Association advises against automatically believing myths related to the restaurant business. For instance, it is not always better to have cash overages as opposed to shortages; and keeping food costs low does not necessarily mean larger profit margins. The generally accepted average profit margin for a restaurant is three to five percent, and your goal should be to maintain a better-than-average margin every year to stay in business and keep the money flowing in.