How to Cut Costs For Your Restaurant Business

Running a restaurant can be expensive. Your profits are entirely dependent on the footfall within your establishment, and there are a huge amount of overhead costs to contend with. You need to pay for an overwhelming amount of food and drink each day, as well as energy bills, entertainment, licensing, marketing, and more.

Around 60% of restaurant businesses fail in their first year, and a whopping 80% fail in their first five years. This just goes to show how difficult it is to run a successful restaurant, and the high running costs are a huge challenge. No matter how delicious your cuisine and how luxurious the interior may be, if you aren’t making enough money to outweigh your expenses, you’re not going to succeed. You need to be careful with your cash flow and take steps to minimise your outgoings.

If you are in the process of establishing your first restaurant business, there are plenty of cost-saving measures you can adopt to help you protect your finances. Here are five tips to get you started.

Minimise waste

In the beginning, it can be difficult to know exactly how much food you will need on any given day. You don’t yet have a good idea how many people you will get through the door, and your footfall will be increasing as you become more established. Your customer numbers will also fluctuate according to a range of factors including the day of the week, time of year, weather, and public holidays.

Inevitably there will be some food thrown out each day. If there isn’t, then you probably haven’t ordered enough! But you want to minimise the volume of food waste as much as possible. Try to determine your daily product requirements and only buy what you need. This will reduce your food costs and lower your restaurant’s environmental impact.

Buy seasonal local produce

Buying fruit and vegetables that are out of season is always more expensive, as they will have to be imported. So why not adopt a changing menu that is dictated by the changing of the seasons. Your dishes should consist of local, seasonal produce to ensure minimal transportation is required and that you can get the costs right down.

Order in bulk

When making orders, it is always cheaper in the long run to order in bulk. Although you will pay more for a larger order, the price per unit is much lower. So as long as you are purchasing items that you will definitely use and which will last, you will save yourself a significant amount overall. This applies to store cupboard food but also items like kitchenware, printed menus, crockery, cleaning products and furniture. Check out Connect Furniture’s contract chairs for some inspiration.

Maximise profits

You want to ensure your customers are getting good value for money, but you also want to see a healthy profit coming in. This means setting your prices to the right amount. It’s a fine balancing act between putting off frugal customers and making money but it’s important you know your worth and don’t sell yourself short. Portion size is another thing to think about, as the bigger the plate, the more money you are losing.

Push high profit items

Some dishes on the menu will have higher profit margins than others, so you want to push these items more heavily. Consider placing them on a specials menu to make them more appealing, or ask your waiting staff to recommend them to diners.

Hire an accountant

Many small business owners are reluctant to hire an accountant due to the cost, but the reality is that a good bookkeeper can actually save you more money than their fee. Hiring an accountant will give you more time to focus on the business, while ensuring that the tricky business of bookkeeping is handled by a qualified expert and minimises the risk of costl;y mistakes.

Observe and improve

In the early days of opening a restaurant, there is always room for improvement. It takes time to find your feet, and you will no doubt make plenty of mistakes along the way. It’s important you use your missteps as opportunities for improvement. Learn from your errors and ensure you don’t make them again. You should be monitoring everything that occurs in your premises from your accounting to your customer service. Ask for feedback from staff and customers and do everything you can to make things perfect. This will enable you to reduce your costs and make as much money as possible.


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