Saving money means making money too. Here is a list of ways to accomplish both.
The hospitality business is one of the few industries I know where there are more ways to lose money than make money. There’s an old joke that’s sad, but true, about the industry: How do you make a small fortune in the restaurant business? You start with a large one.
At a pre-tax profit margin of less than a nickel on the dollar, controlling costs becomes a critical issue for us everyday, no matter what kind of operation you run.
And while I’ve managed a few spreadsheets in my life, I admit that I’m no expert on the Uniform System of Accounts. (I thought General Ledger was a WW II hero.) But I draw comfort from the fact that—like me– there are three kinds of people in the world: Those who can count and those who can’t.
So let’s start at Square One: All money is not equal. For instance, $100 in sales is a hundred dollars less expenses and taxes. A $100 in savings is $100. So saving money—while it doesn’t supplant the importance of making sales– absolutely contributes to profitability. As Mike Dell ‘Angelo, COO of the Briad Group, which franchises both Wendy’s and Friday’s concepts throughout the Northeast, points out: “If a new manager takes over a store that has been running a significant deficit and he or she consistently reduces that deficit, they’re being successful.” Digging out of the hole is first necessary to lay the path to profitability.
So while making money is obviously critical, sometimes losing less money is just as important. And how do you lose less to make more? Not surprisingly, it adds up to a lot of little things.
Follow your recipes.
A driving force behind high food costs in the kitchen or behind the bar result from cooks or bartenders that choose to follow their own recipes or measure “by eye” instead of using the prescribed spoons, cups, scales or shot pourers. This creates inconsistent portions, and the guest experience also becomes inconsistent.
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 short term smart 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.
Offer a 20% “Commission” to any employee for an idea they contribute that saves you money.
Why not? Your employees talk about areas where you’re wasting money or creating unsafe conditions in your business every day. Why not have them share the insight and reward them with 20% of the money you saved? Respond promptly to all suggestions and post the best ideas for everyone to see. This helps eliminate multiple submission of the same idea and shows everybody that you take their ideas seriously.
Play the “Price is Right” at employee meetings (or orientation).
At your next meeting (pre-shift or all-employee), display everyday workplace items that employees use or abuse (i.e. sugar packets, butter, crackers, silverware, napkins, plates, glasses, ramekins, table tents, menus, an extra ounce of meat, a handful of fries, etc.). Out these on a table in the front of the team with a card face down featuring the price of each item or portion. Employees in teams of two try to guess the right answers.
Post your monthly invoices
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.
Weigh, Count, Inspect and Verify Prices on all Deliveries.
Don’t get lazy when checking in deliveries from vendors. Be routine and fastidious with each order.
Display “Breakage” Publicly.
Every time an employee or customer breaks a glass or dish in your restaurant, don’t just throw it away anywhere, keep it in a specially-designated “breakage” bucket near the time clock that every one can see when they clock out.
Offer a Free Pre-Shift meal for every employee.
This strategy helps eliminate food theft during the shift.
Magnetic trashcan traps
will catch most silverware before it’s accidentally tossed.
And finally, sell more of what you have.
This may be your best cost-cutting strategy of all. Selling rotates perishables quicker, makes advertising more effective, saves labor faster, and makes the guest happier. And best of all? Selling doesn’t cost, it pays.