Eight Tips for Saving Money

Eight Tips for Saving Money

One of the keys to long-term growth in this business is learning how to save money one dollar at a time. This is a challenging for many reasons, but the most important relate to energy and attention. Managers have to be energetic and vigilant. They may know how to save money, but having the perseverance to lead a cost-saving organization – even at the end of long shifts and days, month after month – is a major challenge in this business.

It is very common for operators to implement cost-saving measures that peter out over time. The anecdote for waning attention is to demand perseverance while implementing multiple cost-savers at once. Benchmark progress on a weekly basis and know what cost savings look like – both on the bottom line and around the building.

Saving money in this business is about cutting one dollar at a time here and there. This is very hard to accomplish but it’s a sign of a winning restaurant. Here are a few tips to help guide a management team.

Portion Control

The single most important standard is to monitor portions. This can be done in many ways, including using measurement tools like scoopers and jiggers, and having Kitchen and Front-of-the-house managers always on hand. But real cost savings is the product of an organizational culture that starts at the top.

Pinpoint specific costs that get out of hand quickly and stay on top of them. One that plagues many restaurants is bread and butter, which is difficult to portion out and which servers often control. If your bread-and-butter service is bleeding dollars, make it an organizational priority and watch what happens.

Throw Away Nothing

This is a rule that should be implemented at every restaurant. The real impact of this rule is to challenge employees to find a way to be resourceful and stay on top of expiration dates. Inventory should be rotated so that the oldest is used first. A manager or trusted employee should know the walk-in refrigerator like the back of his hand, and know what is about to expire.

There should be a public inquiry anytime food is tossed. This is a major challenge in a larger restaurant, and errors will certainly happen. But there is no excuse for tossing food in a smaller restaurant. This commitment should be made today in any kitchen that hasn’t already done so.

Partner with Repair Specialists

Creating partnerships is a very helpful tool in a small business environment. In many cases, small repair and maintenance companies will lower costs for long-term commitments. Managers should look for personal relationships and even solicit the help of employees when it comes to repairs.

Pay with Gift Cards

It’s always good to ask if vendors or partners will accept store credit as payment. Many will, especially for smaller invoices or long-term agreements. Items like online marketing, table flowers, or specialized desserts can often be paid for with trade arrangements, especially gift cards that are honored during lunch or dinner.

Shop Around

It is a habit of most managers to remain loyal to two or three vendors. There are many reasons for this, including the value of time and long-term vendor relationships. But shopping around occasionally can yield lower costs. This might seem negligible in a given week, but can quickly add up over time.

Cut Labor

This tip seems obvious in theory but is too often neglected in practice. Shift managers may not see the value of cutting labor during slow shifts or may prefer to play it safe. But labor costs should be monitored, especially in a slower, smaller restaurant where cost percentages add up quickly.

Schedule Wisely

The front- and back-of-the-house schedules should be the product of active forecasts that consider past sales and existing reservations. Too many scheduling managers neglect forecasts or simply copy/past a schedule from week to week. Low labor costs start with a schedule that closely follows anticipated revenues to determine staffing needs.

Make them Good Hours

It’s a fact of life that restaurant managers work long. This can create some tired bodies, especially at the end of a long week or during the holiday season. But it takes energetic, vigilant managers to cut costs. For this reason, a manager’s hours should be good hours. A strong case can be made for limiting manager hours enough to be sure that every manager is energetic throughout a shift.

This can create a bit of a paradox, especially when it takes more managers (and higher labor costs as a result) to do so. Managers should be fresh and ready to go, and there are times when adding a little labor to make sure this happens is a good idea.