There are dozens of cost saving strategies in restaurants that can save thousands every year. Some are simple to implement, and others require planning. Today, we share 20 ways to cut back on costs, listing them in order of convenience.
Try these strategies if you want to learn how to reduce expenses in a restaurant.
1. Be transparent with employees.
Without your entire team’s participation, any changes you make will be slow to take effect. Additionally, telling your employees without an explanation won’t inspire change. Instead, gather your team and share the facts. Include what the cost-effective changes are, and how much money they will save the business. Knowing the numbers will help your team to visualize the impact of the changes, and take proactive steps, such as turning off unused equipment or finding ways to decrease food waste.
2. Train your staff
Once they know the facts related to your new cost-saving strategies for your restaurant, train your staff. How do you want recyclables separated? When should the lights be turned on? For instance, if the doors don’t open until noon, keep the lights turned off until your nearing opening hours.
For tips on effectively training your staff, download Lavu’s free ebook 6 Restaurant Training Tactics for an Entry-Level Crew.
3. Only run a full dishwasher.
Running a half-empty dishwasher throughout the day is akin to throwing dollars down the drain. Wait until the dishwashing machine is full before pressing “start,” and you can cut back on the water, soap, and energy costs.
4. Soak dishes.
Fill a sink with warm water and soak used plates instead of running hot water over them immediately. This will soften the food, and require less energy to clean them. Your restaurant will save on employee wages, as well as water and supply costs, by soaking dishes ahead of time.
5. Take advantage of good weather.
Air conditioning is costly. When the weather allows for it, open the windows and reduce your airflow. When the weather requires AC, avoid turning it on high unless necessary. The perfect temperature depends on the size of the space, so test different temperatures to know the ideal range for your thermostat where everyone—guests and staff—are comfortable, and your energy bill is lower than ever before.
6. Control portions.
Portion control is a simple trick to reduce costs at your restaurant or bar. It’s a technique used by all chain restaurants. Customers will soon learn what to expect, and it will keep your costs low and manageable. Today’s consumers are focused on eating healthier, so a smaller portion size could lead to new customers as well. Tips for portion control in your restaurant:
- Offer smaller lunchtime options.
- Reduce the size of sides with meals.
- Make your kid’s meals smaller (use daily nutrition information for children instead of adults).
7. Reduce free offerings.
If your servers automatically bring bread or chips to the table, cut the amount in half. You will lower costs and food waste. If a customer wants more, then you can bring more. The same goes for water. Instead of bringing glasses of water to the table, first, ask your guests if they want a beverage like soda or wine that would bring in sales.
8. Get energy-efficient light bulbs.
Changing to energy-efficient light bulbs is a fast and effective way of lowering your energy bill and being more eco-conscious. Not only do these light bulbs last years longer than regular bulbs, each one saves you $22 a year.
9. Trim down your menu.
Use your restaurant POS to track the sale of menu items to identify the worst sellers, and cut down your menu. This is particularly necessary if a poor-selling dish uses a costly ingredient that cannot be cross-utilized with other menu items. Replace it with an item that will be more popular, or just remove it entirely. Use your reports to see which menu items have the best return for your restaurant. Look for options which are those that cost the least to prepare, and fetch a higher menu price your customers are willing to pay.
Download this free Menu Recipe Cost Spreadsheet to measure and track the costs of your food items.
10. Prevent food waste.
Food waste is often the leading cost in restaurants and bars. Having an overstock of inventory might make you feel prepared, but it leads to food spoilage more often (by way of forgetting its existence, misplacing it, or theft). Instead, optimize your inventory. Use the same ingredients across the menu, and rework specials or leftovers into inventive dishes (like using stale bread for croutons).
Learn how to set up better inventory tracking. Check out Lavu’s guide on Restaurant Inventory Management Software.
11. Start taking inventory daily.
Daily inventory reduces the chances of employee theft and food waste. Keep track of your inventory through your POS system integrated with inventory tracking. (Lavu’s POS software includes restaurant inventory management.) With the help of integrated inventory reporting, you can stay on track of your inventory, and know when there are discrepancies in manual inventory reports.
12. Reduce vendor deliveries.
Streamline your delivery system to reduce costs at your bar or restaurant. See if you can use the same supplier and limit your delivery windows to once or twice a week, opening an opportunity to negotiate for better prices. Work with your vendors to get the best quality, lowest prices, and most convenient delivery times. Don’t let a food vendor persuade you to take weekly deliveries of items you won’t use. The less time your staff spends checking in deliveries, the better.
13. Alternate plasticware with glassware.
Using disposable tableware, cups, and utensils can be costlier than a one-time investment in washable silverware, plates, and glasses. With glassware, manpower is no longer required to order and stock disposable replenishments, and garbage waste is decreased.
14. Use free or low-cost online marketing.
Become a social media expert on Instagram and Facebook. Start an email campaign, and look for low cost marketing ideas for restaurants. Inexpensive marketing methods can still be effective in reinforcing your brand and attracting new customers. Try these free and low-cost marketing tactics that are boosting restaurant sales:
- Create a blog for your restaurant.
- Participate in local events, and share them on social media.
- Run social media contests that engage your customers.
15. Staff your employees appropriately.
Overstaffing or staffing the wrong people can waste money. Get to know the cycle of slow periods at your restaurant to avoid overstaffing. Then, identify the strengths of your employees and use them to your advantage. Build a schedule that fits your worker’s needs and cuts back on overtime costs using a master scheduler. When your restaurant managers in charge of scheduling have all of the tools they need to schedule efficiently, scheduling will take less time, and cost less overall.
16. Buy used equipment when possible.
Depending on the appliance, you might not need to buy a brand new one. Ask around for used equipment and see what’s available before spending top dollar. Used restaurant equipment is typically greatly reduced in price, and often fairly new. Look for recently closed foodservice businesses when buying new appliances or equipment for your restaurant. These types of restaurant equipment can typically be found at bargain prices when used:
- Tables and chairs
- Display cases
- Hostess podiums
17. Install low-flow faucets and toilets.
This overhaul will save your restaurant between 20% and 40% on water usage. Low flow faucets reduce water flow without reducing water pressure, making them more efficient and budget-friendly.
18. Invest in energy-efficient appliances.
This would be ideal for restaurants considering making renovations. Energy-efficient appliances can save your restaurant a great deal of money in the long run. Many states offer tax credits and other incentives for restaurants that switch to energy-efficient appliances, so be sure to check out what is available in your state. You could even get a tax credit for using alternative energy sources, such as solar power.
19. Create and stick to the budget.
Any decision you make for your business will cost money; be savvy in how you spend your resources. Always be realistic about how much things cost and stay within budget; this mentality will help you to keep costs low in every situation. Successful chef-owner Barbara Lynch even recommends understanding the P&L (profit and loss) to be a cost-cutting expert.
20. Reward employees.
We save the most important point for last: Reward your employees for helping you meet cost-cutting goals. Decreasing costs is a team effort, and your staff’s diligence will be the reason that you save money. Acknowledge their effort and reward them for their dedication.
When your staff feels like their efforts are valued, they’ll be more apt to work for your cost-cutting goals.
Implement Cost Saving Strategies in Your Restaurant
Now more than ever, restaurants need to be mindful of their spending. Thankfully, there are ways to reduce expenses in a restaurant. Use these cost saving strategies at your restaurant to begin to cut costs and keep more money in your business. For more cost saving strategies, download Lavu’s free Food Cost Tracking Tool. It can help you monitor food costs and identify even more ways to save. Get the free Food Cost Tracking Tool.