If you’re in the restaurant business, you know that every dollar counts. You’re faced with some of the smallest profit margins out there (4–7%), and making the most of what you have can make a big difference in how much you can make.
Here are some simple and often overlooked ways to save your restaurant money. They’re easily implemented and proven to make a dent in costs, boosting your bottom line.
1. Energy Efficiency
Running a successful restaurant means being as efficient as possible, from ingredients to delivering service. Energy is no different. You may be wasting as much as 25% of your energy bill.
You can start saving by changing your lights to energy efficient bulbs ($20 savings per bulb per year), orienting seating to rely more on daylight, using dimmers to better balance artificial light with daylight and take advantage of the sunshine, and keeping lights off when you don’t need them.
2. Regulate Temperature
Heating and cooling systems are notorious for driving up costs. Some simple things you can do to eliminate waste is making sure your thermostat is working properly and at a fixed temperature. Once you’ve established the comfort range necessary, stick to it and make sure your staff doesn’t alter it on their whim.
Keeping your environment well sealed to outside cold around windows and doors can help, and for heaven’s sakes, don’t leave refrigerators open endlessly while they’re being restocked when deliveries are made.
3. Trim Food Costs
Cut out the fat. There may be unnecessary ingredients hiding in some of your dishes or expensive ingredients that you can replace with a cheaper alternative or substitute. Cross-utilize menu items in different dishes and look at gaining efficiencies in labor by making more of some repeat items fewer times a week.
4. Product Sourcing
Carefully analyze where you are sourcing your ingredients and products from and see if you can streamline the number of vendors you’re using. Consolidating vendors and purchasing from those closer to your locations can reduce the number of deliveries made along with their costs.
5. Save On Water
Low flow is the way to go. Installing low-flow faucets and toilets can save 20 – 40%. Soak your dishes rather than run them under hot water endlessly to remove stuck on food, and run dishwashers only when they’re full.
6. Worker’s Compensation
Carrying worker’s compensation is necessary. However, it’s based on a forecast of your upcoming year’s labor costs. Changes in reduced staffing aren’t necessarily reflected in those forecasts.
They aren’t always updated when renewing policies as well. So keeping your labor figures up to date ensures that you don’t pay more upfront and have to wait till year end for a rebate.
7. Tax Credits
Employers who hire specific groups of people are eligible to receive tax credits under Small Business and Work Opportunity Tax Act and the quick service segment has a 23 percent employee eligibility rate.
It’s worth investigating whether your restaurant can qualify if among your employees are those on welfare, Native American, or disabled veterans.
A caring and alert staff can save you money as well. Getting them trained to seek out efficiencies while spotting and alerting you to problems and inefficiencies is worth the investment.
If you’re not using online scheduling and still working on paper or excel spreadsheets, you are wasting time and money. Online scheduling can cut hours off this time-consuming task and also allow you to better manage your labor costs.
Your POS system should have scheduling built in, allowing you to create and manage your workforce and their schedules, provide them with easy access to their schedules and changes along with time off requests, from anywhere.\
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If you don’t have a POS then you need to get one. The Point-of-sale system is at the heart of your business operations.
It should handle everything from employee scheduling to processing transactions and everything in between: inventory management, vendor management, customer management, bill and receipt generation, credit card transactions, and in-depth business reporting.