Few restaurateurs would be surprised to learn that up to 70 percent of restaurants do not make it to the 10-year mark. Margins in our industry are often so thin there is very little room for error.
That’s why smart operators keep a constant vigil on expenses. But while it’s important to keep costs in line, this strategy can be taken too far. Customers will notice if you have fewer servers than you need, or if you use lower-quality ingredients, both of which can cause them to not come back. By cutting costs in ways that don't compromise the diner's experience, you can keep your customers happy while preserving your bottom line. Here are four ways restaurant operators can keep cost in line without sacrificing service:
1. Be smart about supplies. If you are receiving multiple deliveries from multiple vendors every week, try consolidating to one or two vendors and having those vendors deliver just once a week. You may find that less-frequent deliveries enable you to buy in bulk and save. Because you'll be ordering larger quantities from the vendors you keep, you may be in a position to negotiate better prices, as well.
Once supplies are in your restaurant, make sure that all your inventory goes to use. Carefully track what comes in so you know what you have at all times. If you have a surplus of extra items stocked in your kitchen, build a special around them. Offer drink specials based on whatever you have an excess of behind the bar. By making use of your entire inventory, you can reduce ordering and get profits out of the money you have already invested in the products you have on hand.
2. Make beverage savings add up. Instead of automatically bringing glasses of water to guests when they sit down, wait for them to ask. This not only cuts down on water waste. It can increase the number of sodas, iced teas and other beverages you sell. You can support the policy by putting cards on the table advising that water is brought on request as a conservation strategy. You can also increase your profits by promoting drinks with high margins. According to the Wall Street Journal, fresh brewed iced tea can cost as little as five cents a glass. Diners will enjoy the fresh offering and you will see better revenue.
3. Keep portions in proportion. Consistent portions let your guests know what to expect. Creating a consistent experience means that they won't feel cheated by a plate that comes out with a smaller amount of food one time and a noticeably larger portion the next another. But even more important is the fact that consistent portioning keeps your costs in line. Train all of your employees to serve consistent portion sizes. It may not seem like a big deal to plate a larger scoop of stir-fry, but it adds up to significant quantities over time. You can also determine portion sizes by making them reflect the cost of their ingredients. For instance, a simple pasta with marinara costs less per serving than shrimp scampi. This can be a difficult balancing act, but most customers understand that certain ingredients are far more costly than others.
4. Show scheduling savvy. You should always have enough people on a shift to cover your restaurant's needs, but it's equally important to use your employees well. Schedule fewer employees on days that are usually slower. On busier days, schedule your most efficient and skilled employees. Learn which servers work well together. Often, servers who have good rapport will work together and cover a room more efficiently. Talk to your servers and watch them in action so that you are always using your employees to the best advantage.
It can take some time to identify the areas where you are spending more than you should. Sometimes experiments in cost cutting will not work out as planned. But by carefully observing where your money goes and making adjustments as necessary, you can significantly cut your expenditures, making your restaurant one of the businesses that survives and thrives.
Ezra Adler is the e-commerce marketing director for online kitchen equipment and supplies seller Culinary Depot.