We often talk about the staggering variety of ways there are to lose money in the restaurant business, whether it’s in the kitchen, dining room, bar, storage areas or back office. This being true, it stands to reason that there are also a lot of things that operators can do to stem potential losses by modifying how they do business in these regions.
Here are 14 proven practices that restaurants large and small have found to be effective in reducing waste, minimising losses, and improving efficiency and overall profitability.
Use these 14 items as a checklist to identify potential problems and opportunities to improve. Although some items may not have the potential to create significant savings, what is important is the potential cumulative effect that effective implementation of just some of those practices could mean to the overall profitability of your restaurant.
1. Evaluate your inventory levels “product-by-product” and base your reorder amounts on how much you think you really use until the next delivery comes in and put in a small but reasonable safety buffer. By reducing excess inventory you’ll have less waste and spoilage and you will likely see your employees do a better job of portioning and handling your expensive products when there is less of it on hand.
2. Establish and utilise detailed specifications for every product that you purchase. Detailed specs are required to guarantee the consistency of your products and to correctly compare bids. You can also research and sample a lower grade on certain products and pick up that it will still give you the exactly same result.
3. Ensure the maximum usage of your products. Soups, garnishes and even sauces can be prime candidates for food that may be going straight to your trash bin.
4. Buy only what you require. Over purchasing is among the most expensive things you can do in this business. It leads to more waste, spoilage, and over portioning.
5. Use a scale. Weigh the products that you buy by weight. Drivers know who uses scales and who does not. Protect yourself from being shorted by at least weighing certain products on a spot basis. Many restaurants consider everything they buy by weight.
6. Focus on selling your highest gross profit menu items no matter the food price. This is the case when you promote and sell more high-cost dishes like steak or fresh seafood and promote fewer lower-cost items like spaghetti or grilled chicken. While the steak may have a high food cost it will often bring in more gross profit dollars, resulting in higher food prices but a bigger profit too.
7. Calculate and report on your cost of sales and labor costs every week. It is a fact: What gets measured improves your bottom line and your biggest and most volatile costs are food, beverage, and labor costs. These costs added together are known as a restaurant’s prime price and the most profitable restaurants in the industry know their prime price at the close of each week. When there’s a problem, they can react quickly and get it solved rather than not knowing a problem exists when this advice is only calculated monthly.
8. Lock up dispense towels, aprons, and napkins. One method to decrease this cost is to issue towels and aprons at the start of each shift rather than allow staff to get them whenever they want. Likewise, you can reduce linen napkin usage by restricting their use for service only. Never allow your staff to use napkins for cleaning.
9. Cost out every menu item and recipe. To be profitable, a restaurant not only needs to attain specific sales goals but it should also hit certain cost goals also. However, if you don’t understand what your goal should be then how do you expect to hit it? The first step to projecting a cost target is to produce a master inventory list and pricing of every ingredient you purchase. Using the master stock you can calculate the expense of every recipe and menu item for comparison with the selling price of the menu item. To learn more, visit www.foodrazor.com. (Ask us for a discount code before you sign up).
10. Proportion of menu item ingredients. Most restaurant kitchens are fast-paced, high-intensity production lines struggling to serve as many guests as possible in a short time span. Proportioning is not only essential to this process but is also necessary to control costs and adhere to predetermined recipes.
11. Schedule prep for off-peak meal periods. Controlling minimum staffing levels during offpeak meal periods is difficult because you don’t know when a busload of tourists or a rush of day diners from a conference PR show decide to pop in. Instead of scheduling prep before you open, look at doing the majority of it during open hours and offpeak times. That way should you suddenly get an unexpected rush you’ll have enough bodies to satisfy up with the demand.
12. Cross-train kitchen line cooks, bartenders, and servers. By cross-training a number of your staff to be able to perform multiple jobs it enables you to decrease the number of staff scheduled, especially for the kitchen. It also lets you supplement an employee’s hours by allowing them to work where needed rather than finding a couple of additional hours to make them happy.
13. Filter frying oil every shift. Change fry oil per week. For restaurants that serve a lot of fried items such as seafood, french fries, or appetisers, maintaining oil clean and fresh not only enhances the taste of the food but also prolongs the useful life and therefore helps in controlling the price tag. Considering the normal fryer holds anywhere from 15 to 25 liters of oil, costing anywhere from $20 to $50 to fill every fryer, having a daily filtering routine can save major bucks.
14. Turn off unneeded burners, fryers or ovens during off-peak time. A frequently overlooked opportunity for cost savings is utility costs. Unneeded gas or electric burners, exhaust hoods, steamers, and ovens can use thousands of dollars in wasted electricity each year. Add to that the additional electricity or gas for heating and cooling dining rooms. Utility costs typically range anywhere from 2.5 to 4.5 percentage of total sales. Adding the temperature setting and use of equipment into the opening, shift change and closing procedures can create considerable cost savings.
