night at a restaurant
Business Tips

How Restaurants Can Reduce Their Costs

All businesses could do with reducing their costs and thus helping to increase their bottom line. But there are some industries where it’s of even greater importance. The restaurant industry is one of them. This sector has been through a tough time over the past couple of years when access to restaurants was largely restricted.

While there are definitely some seeds of growth, which promote a more optimistic outlook, the reality is that many restaurants need to make up for lost revenue. And while getting people through the door will play a big role, so too will reducing expenses.

The good news is that there are nearly always ways to do this! Some will have a small impact; others will have a big impact. But when you add the value of all the cost-saving measures together, you’ll see that they can have a huge impact on your bottom line. 

In this blog, we’ll run through a bunch of ways to reduce your costs. 

The Low-Value Items

You’ll likely offer a fair amount of dishes. But not all of the meals that you offer will generate the same amount of profit. In fact, you might have some dishes that only generate a tiny profit. These are the meals that people rarely seem to buy.

restaurant

But because you need to have them in stock just in case someone buys them, they’re still costing you money. It can be difficult to cut dishes from your menu, especially if you have an emotional connection to them, but ultimately, it’s important to remember that you’re running a business

Streamline Suppliers 

You may have a lot of suppliers for your ingredients. But is that the best approach? Not always. You’ll likely be paying a delivery fee for each supplier that you work with, and in any case, you have to be there to accept those deliveries. That’s not always the best use of your time (or money if you need to hire an employer to accept the delivery). Instead, look at working with as few suppliers as possible.

There may be one in your area who can deliver more or less all the ingredients that you need. This will make your business easier to run (less stress!) and have an impact on your bottom line. Just be sure that the supplier you’re working with is as good as the companies you were working with before. There are plenty of ways to reduce costs, but compromising the quality of your ingredients is not one of them. 

Look at Portion Sizes

asian cuisine on table

It goes without saying that the more food you serve, the greater your costs will be. So wherever possible, look at reducing the size of your portion sizes. When we say “wherever possible,” we really mean it! It’s best to look at the dishes where your customers tend to leave food on the plate.

There’s nothing that you can do with food that customers leave on their plates. You have to throw it away. If there’s one dish where this happens, again and again, cut down on portions. If your customers aren’t eating it, then they won’t notice anyway, and you’ll be on the right path towards saving money!

Succinct Menus

Some restaurant owners believe that they need to offer a million different dishes that cater to all tastes. The thinking goes that if you offer something for everyone, then everyone will come. But this isn’t the right approach. Having a menu that’s many pages long will cause more problems than solutions. For one thing, it might drive people away.

food menu

If people are in the mood for pizza, then they’ll go to a pizza joint, not a place that sells steaks, pizzas, noodles, burgers, and everything else. Second, it can make staying on top of your inventory much more challenging than it needs to be. Plus, it makes things easier to manage in the kitchen. Your staff will make food more quickly if it’s one of twelve dishes you serve, rather than one of eighty. 

Opening Hours

It’s not true that the longer you’re open, the more profits you’ll make. You’ll most definitely get more customers, sure, but that doesn’t necessarily mean that it’s valuable. There will be times when only one customer comes in. That’s one more than you’d have if you were closed, sure, but the cost of staying open won’t be worth the value of the customer.

You can reduce costs — and just make your life easier — by keeping your opening hours limited. Just don’t make them too limited. People need to have faith that you’ll be open if they’re going to swing by, but if it seems like you’re always closed, then they won’t make the journey.

Energy Bills

You’ll have a lot of overheads to contend with. Some of them can’t be helped, such as the rent of the building (though do ask for a reduction, if you think it’s appropriate!). There are some overheads that are within your control, however. For example, the amount that you spend on energy.

money next to calculator

There are plenty of ways to reduce these bills. Upgrading your lighting, working with a trusted commercial refrigeration service to ensure your appliances are in full working condition, and getting smart about your temperature control are all effective methods, for example.

Just by taking these steps, you might find that you see a significant reduction in the amount of money you spend each month. 

Used and Refurbished Appliances

You can further reduce your expenses by reducing the amount of money that you spend on your appliances. You’ll need a lot of them to work well. But how much they cost you is within your control. For instance, you could look at buying used and refurbished appliances. They’ll do the same as new items but cost much less.

Conclusion 

Taking all of the tips that we’ve outlined above on board may not solve all of your problems. But we can promise that they will, at the very least, help to make things a little easier to manage. 

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