11 More ways to Reduce Costs

Reducing cost means more profit.

Reduce labor cost through scheduling techniques

Labor cost is controlled through scheduling techniques, not by paying low salaries and hourly wages. You can’t control labor cost by keeping salaries and wages low. In fact, operations paying less than the going wage rate find it difficult to hire and retain the more productive employees. It’s not unusual to find low productivity and inefficiency in an operation where low wages are paid relative to other operations of its type in the immediate area. A low wage scale usually will attract marginal employees whose efficiency, work ethic, and temperament disqualify them from landing identical positions in restaurant companies paying above-average wages to above-average applicants.

Claim unused employee capacity

One way to increase productivity and maximize the same amount of labor hours is to identify unused employee capacity. Full-time employees who are clocked in and waiting for their main duties to begin result in unused employee capacity. One solution is to cross-train employees to do more than just duties of the primary job description. The employees that cannot be sent home during idle time should be assigned other activities that will allow you to reduce the total labor hours scheduled. For example, have a trained server bartend during a rush; train a dishwasher to do prep work before the lunch rush; schedule an assistant manager to work the cooking line for an hour or two during peak periods. All of those measures will increase output without increasing input and/or labor costs.

A BAD idea for cutting costs

Don’t limit your search for cost-cutting ideas to big-ticket suggestions. Some of the most effective and long-lasting ideas target modest goals. One program, called the Buck-A-Day (BAD) program, asks employees to think of ways to reduce costs by at least one dollar a day. Try focusing on five areas: reducing costs, identifying repeated problems, improving quality, getting rid of unnecessary delays, and generating revenue. In an organization of only 100 employees, a dollar saved every working day could add up to $25,000 saved by the end of the year.

Hold “save money, make money” meetings

This meeting is dimple to run, and its outcomes can be very powerful. Convene a group of about a dozen employees with two flip charts in the front of the room—one of them headed “make money, “ the other headed “save money”—and turn employees loose.

Be careful carrying, stacking and washing all glasses and dishes

Servers and bussers should avoid picking up 4 or 5 water or wine glasses at once with their hands – the infamous “glass bouquets.” It’s smart in the short-term because it seems to save time bussing tables, but it invariably causes chipped, cracked and dropped glassware. Dishwashers and bartenders should be carefully trained how to properly handle and clean glassware.

Keep knives and blades sharp

This minimizes the cost of cuts and accidents, saves kitchen hours, hedges rising insurance rates and gives you better yield.

Post your monthly invoices

Post your bills for electricity, water, heat, gas, food, beverage, insurance, lease, on bulletin boards with the totals highlighted in yellow. Now employees can relate the cost of doing business to their own expenses at home.

A way to reduce breakage costs

Breakage is a serious problem in the restaurant business In order to reduce breakage, first post a list of commonly discarded and broken items and their corresponding costs. Then divide your staff into equal teams, each comprised of a manager, a cook, a dishwasher and servers. Name your teams and write the names on the list.

During the next month, whenever a team member breaks or loses an item, it gets listed with its cost under the team’s name. At the end of the month the team with the least dollar amount of breakage wins prizes like gift certificates or cash. The competition helps employees develop careful behavior.

Inspect the trash

Watch your waste and reduce your costs with the following suggestions:

Use clear trash bags. You can see flatware that could’ve been thrown away.

Teach kitchen crew the FIFO/LILO rule. This is the cardinal rule of fresh food storage and rotation: First In-First Out/Last In-Last Out.

“Audit” your garbage. Randomly schedule various employees to sift through selected garbage cans at least once a week. Retrieve items like cocktail forks, ramekins, and flatware. Shoot for “zero-item” audits.

Save the green (lettuce, that is)

Keep your lettuce greener, longer. Always tear lettuce with you hands—using a knife turns lettuce brown. Put your torn lettuce in the prep sink with ice water and a quarter cup of salt. Let the lettuce sit in the sink until the ice melts, then drain the water right before your restaurant opens. Your lettuce will stay fresh, green and crisp for an extra day.

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