Nine Effective Strategies to Save Your Restaurant Money Starting Right Now

Let’s face it, most businesses are looking for ways to save money. This is especially true in the ultra low margin business of restaurants (three-to-five percent margins). Nearly 60 percent of all restaurants fail within the first three years of operation.

This isn’t because they lack tasty food, or even lack customers, but they often fail to balance the cost of their operations against the amount of money they are taking in.

If you are a restaurateur and you find yourself struggling to make it work, then don’t worry, we have your covered. Below I lay out nine actionable strategies that you can use today to start cutting down your costs.

Let’s jump in.

Train Your Staff

Get your staff involved to help you cut down costs. Let them know to keep the lights off when the restaurant is closed. Have them be mindful about dripping faucets, running toilets or running the dishwasher when it is not full. These simple things can add up over the day to day operations of a business.

Install Energy Efficient Light Bulbs

This is such a simple thing to do. An energy efficient bulb will save you an average of $22 per bulb per year. If you have 20 lights in your restaurant, that’s nearly $500 per year. It’s also better for the environment.

Use Washable Clothes for Cleaning

Instead of relying on disposable napkins or paper towel, wipe down surfaces with a microfibre cloth that you can wash. Train your staff to also be conscious about unnecessary waste. Replacing disposable items can really start to add up and eat into your bottom line.

Install Low-Flow Faucets and Toilets

The average restaurant uses about two million gallons of water per year, which translates to thousands of dollars. Low-flow faucets and toilets use 20-40 percent less water and again, training your staff to be aware of water waste can make a major difference over the course of a year.

Reduce Food Costs and Waste

This is a big one. Inventory is one of your largest expenses and if you are not careful, the short shelf life and even things food theft from employees can really start to make this line item get out of control.

The key here is to take the time to track and monitor your food costs. You need to check inventory regularly. Luckily, there are lots of handy inventory tracking tools available that will help you manage this.

Inventory management tools and some discipline will help you prevent over-stocking. You can also optimize your food usage by using the same ingredients across your menu or work items into specials. Also, try to reuse things like stale bread for croutons.

Portion Control Your Menu

Besides reducing food costs and waste with better inventory management, you can also cut waste from your patrons by controlling your menu portions. Your diners will learn what to expect and it will help you cut down on throwing out food that a customer fails to finish.

Cull Your Menu

Are there items on your menu that people rarely order? If so, consider removing them as options. Big menus mean big inventories that you need to track of and keep fresh. Smaller menus are easier to manage and will save you money.

Avoid Over Staffing

Besides optimizing food costs, you need to also be optimizing your head count. Paying employees is another huge expense. Catalog slow periods for your restaurant so you can learn the patterns of your patrons. Keep you staff lower during these slow periods. 

Reduce Employee Turnover

Many restaurants struggle with high turnover rates and reducing your turnover is often easier said than done, however, there are a few simple things you can do immediately to help.

A large number of employees will turnover within the first 90 days. To help cut down on this, you need an onboarding program. This is simply a standardized system for helping a new employee get up to speed with their responsibilities and understand their role in your restaurant.

Another recommendation is to have a loyalty program in place to reward excellent employees. For example, you could reward employees for perfect attendance, exceptional service, or even for helping you cut down on monthly expenses by paying attention to some of the items already discussed in this list.

Final Thoughts

Many restaurants struggle and if that resonates with you, then I definitely encourage you to start trying to cut down on costs where you can. The strategies I listed here are all simple and actionable things you can do today to start saving money.