4 Tips for Cutting Restaurant Costs While Boosting Efficiency
Like most businesses today, you may be looking to reduce your costs to improve your overall bottom line. However, you know you need to be careful so you don’t reduce the efficiency of your staff and your overall processes. Many restaurants that want to cut costs look to their menu prices. Their first instinct is to raise their menu prices to cover operating expenses. This isn’t the best idea, though, because you just may lose the customers you need.
So, we put together the four tips you need for cutting your restaurant costs while boosting your efficiency.
This way, you see higher profit margins, your restaurant becomes more productive, and you don’t hemorrhage customers.
What is Cost Efficiency?
When we talk about cutting costs and boosting efficiency, we’re really talking about cost efficiency. What is it?
Cost efficiency is when you save money in your restaurant by either changing the way you do something or changing a product to work in a better way. (tweet this) You practice cost efficiency to increase your bottom line and improve your efficiencies.
So, cutting costs and boosting efficiency really go hand in hand inside your restaurant if you do them right. Let’s review some ways to do this.
#1: Look at the Small Things
When cutting costs at your restaurant, you don’t always have to look at the biggest things. You can look at small things that really make a big difference.
One example to get you started is something American Airlines did in the late 1990s. They used to serve salads to their passengers. Well, they decided to eliminate just one olive from each salad plate. The cost savings were more than $40,000!
So, you can see that the little things – the micro-savings – can have a really big impact. While cutting costs, the removal of that olive also boosted efficiency as staff had many fewer olives to plate.
The best part about changing small things is that customers often don’t notice them. Here are some ideas for you:
- You can also reduce the number of items in your salads.
- Look at your takeout processes. For example, you might only send one packet of ketchup or salad dressing instead of two. Or, you can limit the number of napkins and only send silverware to people who request it.
- Look for the small changes that add up that customers won’t notice.
#2: Monitor Customer Waste
Another way to cut costs is to look at what your customers are leaving uneaten on their plates.
If you are regularly throwing away leftover food, you are really wasting your money. If your diners aren’t finishing their meals, make them smaller. If there are things on their plates that many of them aren’t eating, don’t include them.
You want to be careful here, though, as you don’t want to reduce menu items so much that people notice.
Things to think about might include the number of sides on a plate. For example, Mexican platters are notoriously large. Consider reducing the amount of beans and rice if you notice people aren’t eating them all.
In addition, you also want to monitor your waste. Don’t over-order. And manage your food inventory well so you don’t have excess spillage.
#3: Reduce Employee Turnover
Did you know that the cost of employee turnover is nearly $6,000 per person for a typical front-line employee? This means that every time you have to hire and train a new employee, you are losing money, productivity, and efficiency.
The best way to cut costs and be more efficient is to reduce employee turnover. This is hard in the restaurant industry, but there are ways you can manage it.
Hire the right people from the very beginning. Make sure new employees can work well in your company culture.
- Pay them a competitive salary and benefits. Restaurant workers turn over a lot because of low pay. Offer better pay and benefits to increase employee retention.
- Offer professional development opportunities.
- Be flexible with their schedule. For example, if you have parents on staff, be willing to work with them around their kids’ sporting events.
- Have a thorough onboarding program.
- Do team bonding activities. Create a “family” at your restaurant.
- Offer positive enrichment and reward your team members when they do something well.
#4: Reduce the Size of Your Menu
Trim the “fat” off your menu and remove unpopular dishes. Not only does this reduce inventory costs and waste, but it makes your kitchen staff more efficient. You free them up to cook the items they are really good at.
Plus, the more items you have on your menu, the more inventory you need. This increases your chance of loss.
You also improve the efficiency of your menu. Why? Extensive menus are overwhelming to diners. By simplifying your menu, they can easily see what they want to order, and they just might order more because they aren’t stressed out trying to find something to eat.
Cut Costs and Boost Your Overall Efficiency
You can increase your restaurant’s overall revenue by managing and reducing your costs. Get rid of the extras or the things that aren’t really necessary. Look over your spending patterns as well as your waste.
You want to be very transparent with this, so you can really get a handle on your spending. You’ll find that a boost in efficiency will naturally follow once you cut your restaurant costs.
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