7 Cost Saving Techniques for Restaurants

You got an amazing restaurant and sales are going good but still, the bottom line is not looking too good. Well, this is one of the most common problems that restaurants business owners/managers face and mostly they cope by implementing sudden knee jerk reactions and plans. The cost-saving process is a two-edged sword that can be of benefit if used properly otherwise it can lead to long-lasting losses especially if it starts adversely affecting the quality and overall perception of your business.  

With over 15 years of professional hospitality management experience in several countries, I have observed and summarized 7 key practical cost-saving techniques in this article. These techniques are not the usual theoretical ones rather these are completely based on real experiences and incidents. I hope these will help you bring your costs down and if it does, do drop a message in the comments section below:

1.   CONTROL THE GARBAGE:

I wanted to start with the most neglected technique of all. Sorting, checking and controlling garbage can get you at least 1-2% saving in the overall costs. Separate garbage bins for food, cans, glass, etc. can help greatly as it will be easier to check how much useable items were thrown in the garbage. Staff usually is too hasty and doesn’t like to cut the onions properly or remove meat properly from the bones or scrape the cheese can with a rubber spatula, etc. Make sure you have someone in charge of this process, who is verifying that staff is peeling, decanting, squeezing, scraping and removing all the useful contents of food & non-food items.

2.   CONTROL THE SELLABLE USED ITEMS:

Many items in a restaurant can be sold even after use i.e. used cooking oil, cold/dry bread, used wood for charcoal, empty cans, etc. These items won’t get you huge savings, however, this technique will, for sure, give you some extra money to reward your staff for motivation without spending anything from your pocket.  

3.   CONTROL GAS:

Most restaurants use gas ovens, stoves, grills for saving costs as compared to electric options. Gas combusts in each piece of equipment with a mixture of air and creates different colored flames. A blue flame is the best flame as it is hotter than yellow flame and burns less gas & more oxygen as compared to the yellow flame. There is a whole lot of science behind this but simply put, blue flame reduces your gas usage and doesn’t make your pots and ceilings black. This results in lesser gas bills and lesser cleaning costs as those black pots and that blackened ceiling won’t clean by itself ??

4.   USING PROPER CLEANING SUPPLIES & DISPENSERS:

We all know chemicals and cleaning supplies are expensive and the most misused items in any restaurant. Using proper cleaning supplies will ensure that you have quality products that will do the job properly and not have to be used more to get the results. Good quality paper napkins, good strength garbage bags, right-sized garbage bags as per your operations, etc. can be expensive to buy but they give better yield and don’t need to be used more as the case with cheaper options.

Moreover, staff diluting chemicals with water manually mostly leads to extra use of chemicals with less dilution of water. Having calibrated dispensers will help you get the maximum yield out of all chemicals and reduce the chances of misuse and wastage.

5.   NEGOTIATE WITH SUPPLIERS:

I know this sounds like a very common method, but this is the least explored one too. Negotiating doesn’t always mean to ask your suppliers to bring prices down. Negotiating can mean to ask suppliers to give you free of cost (FOC) stock and to ask suppliers to sponsor some special event. All suppliers have special marketing budgets that they use to retain clients and attract new clients. If you can show them that a certain event or party will give exposure to your supplier’s products, surely your supplier will be inclined to invest in some marketing budget in your event.

With tough competitions, suppliers are always keen to keep their clients on board and not lose any client. This leverage can be easily used by restaurant business owners to get better deals, get FOC items and have special events sponsored by their suppliers.       

Last 2 are my favorites as these generate the best results: 

6.   SPOT CHECK YOUR STAFF & STOCKS:

Do you have an employee who is never interested in taking a vacation and is so committed to working hard for you that he/she is always working late? While most will assume that these are the traits of a perfect employee, you might want to scratch the surface a little and see what’s underneath. Employee theft is a cruel reality that affects almost all industries and especially restaurant businesses. 

With a very high number of daily transactions in restaurants, comes the headache of stealing and staff robbing from the sales. This causes dual losses, one is the loss of stock and second is the loss of the revenue that stock would have earned. Invest in good software and good internal control systems that can help you easily identify the variance and hence possible stealing. Nowadays the restaurant staff is getting sharper day by day and invents new methods to loot the restaurant owners. You must implement regular internal audits and spot checks to ensure cash/credit sales tally the system and nothing is given out to customers or employees without system-generated kitchen tickets. You will be amazed to see how many discrepancies the auditors will catch if given, proper authority and proper access.

7.   REWARD HONESTY:

I know this doesn’t sound like saving rather this technique is asking you to spend money, but this is where many restaurant owners/managers miss the important point that investing in the right attitude and right people always generates more profits. If you don’t reward and appreciate honest and smart-working employees, slowly and gradually you will lose them and then you will be left only with cunning and possibly thieves that will cause you more damage and more losses than you can ever imagine. Rewarding honest employees and appreciating a good attitude will improve positivity, boost morale and encourage efficiency. Moreover, all the techniques and methods will only work if your employees believe in them and work tirelessly to implement these with a full heart.