Cost Cutting Ideas for Restaurants

You can call it being thrifty, frugal, or just plain savvy, but every restaurant owner wants to save money, especially in the current climate. Additionally, they want to cut costs while not having a detrimental outcome on their products or business processes. Fortunately, there are many different ways you can cut costs and ultimately bolster your savings. In this article, you'll learn how to cut costs for restaurants.

Cost Cutting Ideas for Restaurants Related to Dishes

Invest in Quality Glassware

Plastic cutlery and disposable plates are convenient, but they are eating into your bottom line. You pay for these items and then throw them in the trash. Sure, this may cut down on having to employ dishwashers, but when you factor in the high costs of the product along with the increase in trash removal, you’re not saving money. Buy quality glassware and your bank accounts will thank you for it.

Cut Costs by Soaking Dishes

While we’re on the topic of dishes, you should not have to run your dishes through the dishwasher twice. That will affect your water and energy bill. Instead, when there are dishes with food stuck on them, it’s best to let them soak before running the dishwasher. The food will be loosened from the dish and you won’t have to run it twice.

Labor Cost Cutting Ideas for Restaurants

Staff Properly

A lot of restaurants keep people on the schedule each day “just in case”, but that just costs you money. Schedule your workers so they’re there when you need them and not there when you don’t. This is more of art than a science, but if you have competent management that is not afraid to roll up their sleeves and help in a jam, this method can save money.

Find Staff Who Can Fill Multiple Positions

If you need a host/hostess but want to reduce costs temporarily, then try training wait staff for hosting duties. You might be surprised how easily they're able to pick up those responsibilities.

Save Costs By Reducing Staff During Slow Times

If business slows down during certain parts of the day, then try reducing staff hours during those periods. You may not need 5 wait staff and 5 chefs when you barely service a full four top from 2-3PM.

Understand Your Sales

Another cost cutting tip is to understand your sales. You might find that 90% of your business is take away or delivery during your lunch hours. You might be inclined to make the bold choice to shut down inside seating and only service takeaway orders during this time period.

Cost Cutting Strategies for Restaurants Related to Energy Usage

Shut off the Lights at Night

When you drive past a restaurant that is closed for the evening, you should see complete darkness inside. Unless you want to let passersby see your interior, all you’re doing is wasting precious electricity. Not only should you be proactive about shutting off the lights at nighttime, but you must also shut them off in specific areas closer to the end of the night. Most restaurants will stop seating people in certain parts of the restaurant in the last hour of operation. During that time, shut off the lights in other areas. They’re not doing you any good!

Switch to LED Bulbs

On that note, electricity costs add up over time. While leaving your lights on all night might not seem like it’s a big cost, imagine that cost over several years of operation. It could cover the cost of a liquor shipment. To build on those savings, it’s a good idea to switch to efficient LED light bulbs. That way, you’ll save more money on electricity. Combined with the new practice of turning off lights, you’ll save a sizable amount over time. 

Use Low-Flow Bathroom Fixtures

Check your bathroom fixtures for water-saving opportunities. Use low-flow toilets and urinals, put aerators on your sink fixtures, and decide whether paper towels or blow dryers are better for your needs. Your water and energy bill will drop rather substantially.

Only Run the Dishwasher when its Full

Back to the dishes! This time, it’s important for you to make sure you are only running the dishwasher when it’s full. If there is an emergency and you need a specific dish cleaned right now, have it hand washed. There is no reason to waste the water of a full dishwashing cycle on half the dishes. Pass that information down the line and watch your water bill shrink.

Cost Cutting Ideas for Restaurants Related to Marketing and Menu

Online Targeted Ads are the Best ROI

When looking at advertisements, most restaurants are missing out. Instead of radio, TV, or paper flyers, even, it’s best to engage social media advertisements. You can directly target a specific area with your ads on social media sites to get people excited about coming to your business. You can tell them about any new deals, offer a promotion that is online-only, or just remind them that you’re open for business and serving their favorite foods and drinks.

Re-Evaluate the Menu

As much as you may like being the restaurant that has it all, you have to consider whether it’s worth the money and effort. It’s time to look at the menu and trim it down to one or two pages per mealtime. Concentrate on buying goods that can be used in a lot of different dishes. Eggs can be used for all three meals, for example. You know that various dishes need cheese day and night. Be unique and build an identity through your food offerings, but not at the cost of a packed freezer and high spoilage.

Cut Deliveries and Time Them Better

Work with your vendors to see about rescheduling your deliveries so that you only get them two or three times a week, max. When a delivery comes in, you have to use extra staff to get the items squared away or risk your customers missing out on high-quality service. Not only can you cut down on deliveries, but you can schedule them for your off-hours, so you don’t disrupt service and cost your restaurant money.

Audit your Purchases to Stop Over-Buying

Poor inventory control costs restaurants a lot of money each year. Managers get comfortable placing the same orders week in and week out without thinking about it. While 2020 has made people rethink every element of their business model, it should serve as a wake-up call to a lot of restaurant owners. It’s time to dig into the orders to make sure the right amounts of products are being bought. If you had a one-time, flash-in-the-pan event where people started ordering a specific food item and then they stopped, then stop ordering that item so much. These audits can be difficult, but when food fads die off (like bacon a few years back) you’re left with unbalanced orders that get tossed away.

Perfecting your restaurant’s business model is about exerting as much control as possible over the minutiae. Yet, when these cost-saving tips become second nature, you can begin to optimize your business in new and interesting ways. Some of these are harder to implement than others, but your restaurant will be better for them.