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How to Reduce the Costs for Your Restaurant Business – 8 Effective Ways

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How to Reduce the Costs for Your Restaurant Business - 8 Effective Ways

The financial health of a restaurant does not depend solely on increasing profits, but also on reducing costs, which is essential in all ventures. Even more so in the current moment of the coronavirus pandemic in which we live. The situation affected several types of business, one of the most affected, the food service sector. Sales fell by 56% , according to Cielo data.

And yet, a study done by SEBRAE, indicated that 7% of bars and restaurants closed their doors definitively because of the losses. And 92% had a drop in revenue.

To compensate for this loss, it is essential to plan for cost reduction so that you have greater savings and financial balance. Therefore, in this article we are going to show you 9 steps for you to reduce your restaurant costs.

1. Evaluate Your Expenses

Mapping all expenses is a fundamental task to reduce restaurant costs. Through a survey of expenses, it is possible to identify which consumptions are important, which can be reduced and which can be left out. In addition, it can be a good time to take advantage of and classify your restaurant’s fixed and variable costs. By segregating expenses in this way, it becomes easier to assess whether a fixed cost needs to continue to exist or not. For this you can use Pricebook to calculate your expenses and profits.

2. Examine Your Menu

Keeping a varied menu can be attractive to customers. However, too many options can be difficult to manage, especially when it comes to inventory management. Therefore, try to develop an intelligent menu, checking which are the most accepted suggestions among the clientele and avoiding waste. Also note the possibility of assembling dishes that align with the seasonality of the food . After all, seasonal fruits and vegetables have better prices and are tastier.

In addition, it is important to standardize recipes. The size, type and weight of the ingredients used in a recipe must be determined on data sheets . In this way, the presentation of the product and its cost will be standardized, ensuring greater customer satisfaction and savings for the restaurant.

3. Have Good Suppliers

Having a good relationship with suppliers is essential to reduce costs in the restaurant. They must offer quality and good conditions for your purchases. Make sure that when you buy in larger quantities, you get better prices. But be careful: bulky purchases require great inventory management.

Furthermore, it is essential to always keep yourself well informed about the prices practiced in the market and, if necessary, do not hesitate to change suppliers. Sometimes, it is worth bringing inputs from other regions, as long as the deadlines, quality and freight cost do not make the operation more expensive.

Related: Benefits of Restaurant Equipment Financing

4. Optimize Your Stock

To reduce expenses, it is essential that you make good use of your raw material and all products in stock. That’s why it’s so important to assemble your menu with a strategic look. Check which dishes are the most popular and which are not so requested. With the suppliers in order and the menu aligned, it is necessary to know how to keep the operational stock reduced, avoiding the waste caused when the food reaches its expiration date. Include in the routine, for example, the labeling of perishables to minimize deterioration, in addition to using control sheets with relevant information, such as entry and validity of stored products.

5. Perform Preventive Maintenance Of Equipment

Malfunctioning equipment can lead to wasted energy and, consequently, to the risk of loss of merchandise. A great example of this is the freezer, which, with excess ice, starts to work overloaded. Therefore, also schedule periodic maintenance on your equipment, respecting the deadlines recommended by technicians.

6. Save Electricity, Water And Gas

A considerable part of the costs of a restaurant is related to consumption bills, such as electricity, water and gas. It is true that consuming these resources is part of the company’s operation, however, to reduce costs it is necessary to save even on essential expenses. To effectively reduce bills, it is necessary to invest in staff training and implement an organizational culture that preaches waste reduction throughout the restaurant operation.

Since it is useless for the proposal to reduce expenses to be adopted only by the entrepreneur. It is necessary for the entire team to understand the seriousness of food waste and become aware of the importance that small daily actions, such as turning off the lights when they leave an environment, have for the economy at the end of the month. Instruct everyone that sustainability is the key word for business.

7. Make Partnerships With Other Establishments

Often a small restaurant has no bargaining power. However, a group of united establishments can obtain advantages in distributors of the food segment, such as promotional values ​​in the purchase of inputs and discounts on deliveries. For this, it is necessary to promote the integration of local entrepreneurs, which can result in the formation of a purchasing group.

Related: 5 Creative Ways to Set Your Restaurant Apart

8. Optimize The Motoboy Route In Delivery

Well-planned routes will help your restaurant reduce expenses. Therefore, it is interesting to set up a delivery operation, always trying to allocate orders from nearby locations on the same motoboy route. However, remember that this strategy aims to speed up the service, so don’t wait too long for more orders before closing the route. Set a grace period for this.

Another interesting action is to evaluate the paths that couriers take. That’s because a shortcut won’t always be cheaper. For this reason, jointly draw up key points and locations with the highest concentration of deliveries.

Also remember to take a moment for your employees to get to know the route and learn how to get to destinations, without having to pause delivery to look for the location. It may seem like a trivial situation, but this increases the cost of delivery.

James Smith is the writer for Munchkin Press. He is a young American writer from California and is currently traveling around the world. He has a passion for helping people and motivates others.

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