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How to make your restaurant more cost effective?

Is your Restaurant’s profit struggling to increase and continuing to stay at the same rate? Then here are some methods to make your costs drop so that your profit rises.

How to make your restaurant more cost effective?

Get your Employee’s on board

Do not try and cut costs on your own as it will most definitely fail so make sure that your employees understand why you want to cut costs and what the target it is and what they can do to decrease the utility costs or food wastage. This will encourage them to start being more cost effective as they will know how to cut costs such as turning off equipment that is not being used and will see the importance of cutting costs. One way to motivate them more is by rewarding any employees that are cutting costs and ensuring that they know that you have noticed and appreciate it which will lead to them continuing to use cost cutting methods as they know they will be rewarded and appreciated.

No Freebies

Make sure the customers pay for everything they are getting so that no produce is being given out and not being paid for. You should invest in portion scales because this will prevent the employees from giving out too much food in each portion and will have a guideline to go by. This makes sure that food is not being wasted and all produce is getting a return profit which will cut the costs of the business and will also lead to the profit margin widening. Many restaurants give out free chips or bread when a customer sits down, this leads to the produce not having a return profit which prevents the restaurant from boosting their profits and could lead to the customer not wanting them and it going to waste which will lead to the food wastage increasing. To combat this, you should only give it out if the customer asks for it as this will decrease the amount of food you are giving out which does not have a return coming in which will decrease costs and could lead to the profit margin widening. One method to encourage customers to purchase drinks is by not giving out free water on the table and only giving it if they ask because this will lead to them looking at the drinks menu and will increase the chance of them buying a drink off the menu which will increase the sales and will lead to the profit margin becoming bigger.

Keep on top of your stock control

In a Restaurant, a lot of stock is being sold daily which can lead to little amounts going missing without any explanation which could mean that employees are taking it home with them. To prevent this, you should make sure you count all of your stock before you open the restaurant each day and then count it when you close the restaurant. This will allow you to check the amount sold with the amount missing from the stock and track wastage to see if any food or drink has gone missing without being paid for or being put down as wastage which will prevent the stock from going missing without a profit return. Make sure that all stock is used and any usable stock is not binned as you could make the most of products that are going out of date by making a promotional offer. For example, if the chips were on their last day of being used then you could offer them for £2 when bought as a side for any meal which will lead to the customers buying them as they will be cheaper which will increase the sales and lead to them being bought which will prevent them from being wasted and will lead to money being made which will increase the profit and decrease the cost as they will not need to pay for it to get binned.

Use your Sales Report

Your Sales report will be very useful as it will allow you to see all of your transactions and all the sales for each product. This will allow you to analyse your sales and will lead you to see what are the busiest or quietest times and will allow you to see what are the most successful products and what are the least successful products. This will allow you to cut costs because you could decide to close earlier if when you are open later at night it is very quiet which will lead to your utility bills decreasing as you will be using less electricity and heat as you will be open for a shorter period of time. It will also allow you to cut costs because you could discontinue any products that do not sell which would mean you would not have to order as many supplies. However, there is ways to boost your profit as well as you could see what your busiest time and offer deals at that time so that you get more sales such as a happy hour if it is alcohol or a lunchtime deal including it if it is food as this will lead to customers seeing it and wanting to buy it which will lead to the restaurant being busier. You should focus on marketing your most successful products as you know these are successful and people will buy them so they are your best chance of boosting profit.

Do you really need it?

A lot of money is spent while maintaining and running a business but there are always utilities or items that you are paying for but could live without. One of the main areas where restaurants waste money is employees as many restaurants are overstaffed so you should make sure you are only staffing the right number of people. For example, you will not need loads of staff on a weekday or late night as there will not be many customers. When buying machinery, you should look at used or refurbished machinery because they will be able to do the job as well as a new piece of machinery but will cost much less. Deliveries are a very big impact on the costs of a business and you may be getting multiple deliveries a week so what will cut costs dramatically is only having one delivery a week. Also being loyal to one supplier could lead to you getting deals and getting the suppliers for cheaper which will increase the amount of money you make on each delivery. These 5 simple ways will see your costs falling dramatically at an instant.

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