3 ways to reduce restaurant costs

Restaurateurs can choose from a wide range of methods – both good and bad – to cut the costs of running their restaurants. Today we will focus on strategies that will benefit your business over the long term. And that does not mean buying cheaper ingredients or lowering the wages of your staff. Although such solutions may reduce the share of expenses in your overall budget, at the same time, they may reduce the profit made by your business. Is there a way of cutting the costs of running a restaurant without losing out? Let us tell you about 3 such methods.

Analyse your restaurant’s operating costs

Operating costs are associated with the day-to-day running of a business. These are expenses that are not directly related to the service you offer but are necessary for the proper functioning of the restaurant. Examples of such expenses are costs of electricity, water, utilities, kitchen equipment, POS software licences or staff salaries.
Start by looking at all the operating costs of your business. Scrutinise items you could be saving money on. Compare how the share of expenditure has changed over recent months and determine the areas that generate the highest costs.

Step 1 Put an end to food waste

It is estimated that around 4-10% of the food bought by restaurants is wasted before it reaches the consumer. One of the most effective strategies designed to lower restaurant costs is controlling the quantity of food that is thrown out and the size of the uneaten food returning to the kitchen. Here are some useful tips that will prevent you from throwing food – and money – into the bin:

The First-In, First-Out method

Otherwise known as FIFO, this method minimises the quantity of expired food products that need to be disposed of. Remember to clearly mark all food with an expiry date. Place the oldest ingredients at the front so that they are used first.

List of obligatory products

Analyse which menu items are most popular and, based on that, calculate your restaurant’s demand for specific products. As a result, you will avoid spending money on products that may not be used.

Digital pantries

Software that supports a digital inventory process, such as TouchBistro, allows for efficient inventory management and smart spending.

Step 2 Embrace new technologies

Reducing restaurant costs requires an open mind. By investing in new technologies, in the long term, you will save not only money but also your precious time. Not forgetting the unnecessary stress!

A POS system is a must

The food service sector is full to the brim of POS products addressed to restaurants. The high competitiveness of POS system suppliers means that in order to stand out from the competition, POS systems are enhanced with additional functionalities that make the work of restaurateurs easier – from payment management to stock control, reporting or e-restaurant creation. It is certainly worthwhile to delve into the topic and think about choosing the right POS system for your restaurant. A suitable solution will help your employees work more efficiently, which will boost the profit made by your business.

Step 3 Lower your utility bills

Another way to cut operating costs is to reduce the restaurant’s utility bills. Restaurants use a lot of energy and water to prepare food, light the dining room and kitchen and maintain the right temperature inside the premises. Simple adjustments can help you shrink your utility bills and make a positive impact on the environment.

Choose the best utility operator

Although it may seem obvious, from time to time, we should check that we are not overpaying. Take a look at the available options, compare them and choose the one that is most cost-effective for your establishment.

Invest in energy-efficient appliances

Use energy-efficient appliances. Although their purchase price may be higher than that of traditional appliances, such devices are sure to save you money on energy bills. Energy-efficient appliances tend to pay for themselves after only a few months of use.

Introduce positive practices

Take a close look at the practices of your staff. More efficient use of the dishwasher and the air conditioner, the correct manner of heating the premises and turning off all the lights after closing the restaurant are all methods that will contribute to cutting down the operating costs. Explain the importance of saving electrical energy to your employees. You may want to consider introducing a reward system for those who take special care to minimise costs.

Price increase

Costs are an inherent part of running a business. You can try cutting them, but in some cases you may have to take additional measures to keep your restaurant profitable. If you’ve tried the tactics outlined above, but your operating costs are still too high, consider raising your menu prices. Remember to inform your consumers of the price increase in good time. Many people will happily pay a little more money for their favourite meal if they understand the reasons behind this increase.


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