6 clever ways to cut cost at your restaurant

Giada Pezzini | 18 May 2016

6 clever ways to cut cost at your restaurant
Restaurant operators survive on slim margins, and cost cuts are an unpleasant but often necessary part of the work. There are, however, smart strategies to save a buck, and bad ones, which may save you some money in the short term, but will be counterproductive in the long run. We have spoken to operators in the industry, and here are six of the best suggestions we have come across to bring savings without jeopardizing your reputation:

1. Reduce the number of vendors and deliveries

Every delivery you receive has an attached cost. Save money by getting less frequent deliveries, from as few vendors as possible. By ordering larger amounts of food less frequently, on top of saving on delivery costs you may be able to get a discount for buying in bulk. If you deal with fewer vendors you’ll also have to manage fewer invoices – which translates into quicker, less costly accounting. Businesses we spoke to underlined the importance of always paying your bills with vendors timely: you will be in a stronger position to bargain deals.

2. Look for the small drivers of savings

Reducing dish size or quality is a common, but very unpopular strategy for cutting costs. But what about all the rest? On Forbes, an expert in restaurant money-saving strategies suggested that reducing the size of the lemon wedges used to garnish drinks can bring about great savings, with little to no change to the quality of the beverage. Are there any other food items you use as garnish that you could downsize? It’s not just about the food, though. Are you using individually wrapped portions of salt, pepper and sugar? You can save money on all these items by using bulk dispensers instead of individually packaged items. If you operate a takeout service, you can reduce your costs sensibly reducing product packaging. Go easy on the free napkins in each bag. Don’t give extra portions of salt, pepper, sugar and creamer unless customers ask for it. Don't buy expensive plastic bags printed with your logo: use brown paper bags and stamp them with your logo. Buy used when you can: do you really need all new kitchen appliances? Many of these changes will not only save you money, but also make you look more environmentally conscious. Plus, telling customers to “Take only one napkin – Think of the environment” works better than saying “Take only one napkin, they are expensive”.

3. Follow the seasons

Seasonal ingredients are not just more flavorsome and fresher: they can also save you some money. To take full advantage of the freshest (and most inexpensive) local vegetables and herbs you can tweak your recipes based on seasonality, and create time-limited seasonal menus and dishes which can change every few weeks. By varying your menu frequently you can also attract more returning customers - offering exclusive and limited-time products is a tested way to increase sales and strengthen loyalty.

4. Slash unpopular dishes

Too many restaurants make the mistake of running very large menus. Although the pressure from customers to include certain items can be high, a menu with too many items can end up being confusing for customers, and hard to maintain. With too many dishes on teh menu it’s harder to maintain the same quality. Most importantly, large menus are money pits which make you lose money in at least three different ways:
  • Have too many dishes on the menu, and customers will take longer to pick a dish and order. For every extra minute that a table is occupied without ordering, you are losing money! Shortening your menu can help you turn more tables.
  • The more dishes on the menu, the more kitchen space you need. Before you design your menu, consider how much kitchen space and equipment you have. If your cooking area is too small to manage, say, multiple dishes being sautéed at the same time, do not include them in your menu - or you'll slow down service when multiple guests order them during rush hour.
  • Finally, the more dishes you include, the more inventory you need. Fresh food spoils fast, so the more ingredients you need to buy, the bigger the risk that your margins will end up in the garbage can.
To keep healthy margins, experts advise removing the least popular dishes from your menu, and keeping only the best sellers, and high-profit items. How many dishes should you keep? As a rule of thumb, you should include seven dishes maximum per menu category.

5. Smart design your menu

Are you using your menu to its full potential? Having your brand's colors and design is necessary, but not enough. Follow these few simple menu design tricks to push the right items, and increase your margins:
  • Identify your high profit items (expensive dishes with relatively low ingredient cost), and make them very visible and attractive by using bold type, different colors, and framing elements such as boxes. Don't be afraid to use attractive drawings, or even pictures if they fit with your brand image.
  • Most researchers seem to agree that when diners read a menu, they start from the top-right corner. This “sweet spot” is the right placement for the items you most want to sell. Design your menu based on diners’ eye-scanning pattern: remember that what catches the eye first has greater advantage over anything that is seen later.
  • Put high-profit dishes next to very expensive ones; the first will appear affordable by comparison, and more diners will gravitate towards them.
  • Do not line up your items’ prices in a column. Although you may think it looks more elegant, when prices are aligned in a tidy row diners tend to pick based on the cost, rather than the dish, and generally choose cheaper options.

6. Get help from your POS and management system

Is your POS and restaurant management system an asset to your business? Or, like many restaurants, are you using an outdated software that only covers less than half of your tasks? New technology can be a big investment, but if you choose a solution that supports your employees, it can pay itself back quickly. A unified management system can help you identify and reduce waste, order only what you need, reduce manual work and time spent on analyzing data, and even schedule and manage your staff within budget. Add the ability to run your point of sale on mobile devices, and you can speed up order-taking and payments, and turn more tables.

If you want to get more information about how a new POS and management system can help you increase your revenue, don’t hesitate to contact us: our restaurant technology experts will be happy to advise you.