How to avoid unnecessary restaurant expenses
The hospitality industry has been on a roller coaster ride in the entire Coronavirus lockdown. All businesses have faced a massive blow off but the restaurant and hotel industry was at a worse stage. Ever since then, the restaurants and the hotel industry are trying to figure out to retrieve its losses. But now that the lockdown is lifting, though, with some guidelines, all restaurants and hotels are buckling up to seize the ground once again. But the most stand question is- How to strategize the Restaurant Finances and align the restaurant business’s goals with them?
The question stands as an alarming concern for all. While the employees are in panic of being sacked, the restaurateurs and industry managers are still trying to dope out the way to salvage the restaurant finances. Restaurants are reviewing its emergency funds and the options of credits, it can still sit.
Tracking where your money is going and employing them judiciously, is somewhat a daunting task. Even though it might seem, whatever you are doing is absolutely correct, you can always discover better ways to cut down your expenses but before that understanding the reason why they happen is important.
While some are unavoidable, some can be prevented. Here we have jotted down some points for you to consider.
No or Low Investment :
Investing a little at regular intervals rather a whole lot in one go can be a great idea. You can look up to adapt certain strategies to meet the dynamics of the market. While with no investment, you can still make the available resources dance on your creativity.
Quick Tip- Try investing in a new stock of cutleries and crockeries, glassware, packaging materials, lightings, wallpapers, which can not only boost your sales but can also be a surprise element after lockdown for your customers. If not, without investing, try to make changes in the decor, placement of chair tables, new style tabling, etc.
Lower Inventory Levels
To have a heavy flow of inventory and stocking them up for future use, takes a giant chunk of the expenses. This also leads to a lot of spoilage and waste when not used. Try intricate daily inventory in a key item that is to buy what is needed. This is one of the most basic, yet effective cost controls in the restaurant business. You can always compare your POS (Point of Sale). Only optimizing what is needed can save you a lot. Hence, inventory management is very significant.
Quick Tip: Always use the "first-in, first-out" rule with produce. Label each product to make sure the oldest ingredient gets used first to save them from spoiling.
Something is better than nothing:
When it comes to cost-cutting or reducing restaurant expenses, mostly the restaurants start curtailing their labor cost that is laying off their employees. In this crucial time, when everyone needs each other support you need to be their support. Rather than sacking, you can ask your employees to work in shifts, maybe at a low salary. By doing so, You will not only provide them with a job but the restaurant management can be done efficiently and effectively.
The problem is always in the head and the solution is always in the hand. Exactly the one you are holding right now- your phone. Social media and digital marketing is a new age advertiser and promoter, help you reach a wide audience at a fraction of the cost. Rather than using those traditional ways, start using the best of the internet. This will help you to learn the daily change and future changes in the trends and customers' tastes and preferences. Show off your measures and solution to be a hygienic service provider. Ramp them off your websites and blogs.
A healthy relationship with the suppliers:
It is advisable that you share a good bonding with your suppliers. Not only will it help them to understand you in situations of crisis, but you might also get special benefits. So now is the time. If you have kept the rapport really well you can always ask them for some discounts or negotiate during bulk orders.
Quick tip: Join a Group Purchasing Organisation. When mass order is simply not possible, take help from your peers. Yes, competitors might turn out beneficial in this case. Organize yourself in a small group so that you can purchase one item in bulk and share it accordingly.
Saving through Economic Habits:
Train your staff members with the utmost care. From the very beginning, teach them to take conservative measures, starting from--- handing out extras to customers - extra condiments, extra tissue paper, extra bags. It's easy to not pay attention and just toss 5 packs of condiments in a single order, but it leads to a significant increase in expenses in the long term. Also, some like- switching off fans and lights when not in use, closing the doors of refrigerators properly to avoid unnecessary wastage of food. Also, make sure that they adhere to it.
Digitalize your restaurant. Use mobile apps to get orders placed. Use tablets to set up your á la carte. So if a mobile app can directly connect the person to the menu without waiting for a waiter to tell them about it, what can be better than this? How about a display menu? The printing cost is heavy. Bid adieu to the paper menus! Save paper, save money!
High Rated Menu:
There are times when a higher food cost can mean more profit. Such is the case when you promote and sell more high-cost dishes. Shorten your menu. Cut down all those which are rarely ordered or need an entire set of new ingredients. Also plan in a way such that multiple dishes use the same ingredients. Wasting food in the name of the variety is simply not a smart play. This high food cost can definitely bring you more profits. You can take help of the Menu Engineering
Donate your leftovers:
If you are completely clueless about what to do with the leftovers, the best step is to feed the poor. Of course, you can keep them in the refrigerator till next use, but be a little cautious now. Don't play with your customer's health and help them enjoy fresh food. No one has ever become poor by giving. So help locally, and get popular globally. Customers will be impressed. Who knows that this would attract the media someday?
Prepare a Budget and Donate to Emergency Savings:
Now you know where to bear the expense and where to shed it. Where you know you can save, always keep it for emergency savings. Cutting down your costs requires preparing your estimated costs beforehand. To know how much you can save, you have to know how much you are spending and moreover where you are spending. Your excel sheet can do wonders!
Starting a Restaurant business can be a powerful cash machine unless you have streamlined planning for the complex service of your restaurant. You can always use the Restaurant Management System. Planning the running capital as well as the fixed capital can help you see profits, even after the break-even points. It is always those small things that matter and takes you to the skies. Start planning to resume your restaurant businesses.
In brevity, plan your work and work out your plan.
Save money and money will definitely save you.