When you boil any business down, you ultimately have two goals – to increase your revenue and to reduce your costs.
And when it comes to running a restaurant, this advice is especially important.
Because while running a restaurant is a passion for most people in the industry, the truth is that margins in the F&B industry can be dreadfully low, which requires a sharp business eye for cutting costs.
Yet while cutting costs is so important, so few restaurants actually have the experience to know how to effectively cut costs without negatively impacting their customers.
Here at Chef Collective, we have years of experience helping chefs around India operate successful and profitable food businesses. We know that if you focus relentlessly on reducing your costs, you will have a well-oiled business that is highly profitable and will feed hungry customers for years to come.
Here are the 6 best ways to chop your kitchen costs today…
1. Calculate inventory management and waste control
All successful chefs know that to have a profitable restaurant, you need to have good inventory management. To make sure that you aren’t spending too much on raw produce, it’s important for you to have a projection the weeks and months ahead. Over the course of the year, doing inventory management correctly will save your business an enormous amount of money. Plus, you’ll never have to tell your customers that you are out of a certain dish or ingredient.
Granted, we understand that predicting demand is a complicated process, and it’s usually the rule of thumb to order slightly more than you anticipate that you need.
To cut down on food waste, consider taking unused raw produce or excess cuttings in your kitchen to make seasonal dishes or new promotions. By getting creative, you can cut costs and waste.
It’s also important to keep track of your waste so you can make improved projections for the upcoming months. Be sure to keep a tight hold on these numbers, as you will eventually see patterns, and better understand the ebb and flow of your restaurant, therefore allowing you to cut down on waste.
Here at KitchenPlus, we make data collection as simple as possible with our proprietary software, which means you can easily identify where your company can reduce waste and increase profits.
2. Locate new suppliers
Restaurant owners are very familiar with the difficulties of finding the right suppliers, especially if you require more bespoke ingredients. That said, discerning which supplier is best for your business can be challenging.
Spending time looking for alternative suppliers is the best way to secure the right deal for your restaurant. You can also use your current supplier as a benchmark for assessing future suppliers, ensuring you find the best available supplier for the industry. However, it’s essential that you do not risk damaging your food quality for a lower price.
Cloud kitchens provide you with a method of consolidating your suppliers. Should you be operating multiple brands from a single kitchen, this provides a great opportunity for you to integrate your supply for all your brands, saving you money.
3. Assess your labour costs
A major expense restaurants face is their labour. Typically, restaurants have a large labour pool to handle customers during peak hours. Calculating precisely how much labour you need is a fantastic way of managing your labour costs.
Should you find yourself needing a lot of employees to handle simple tasks, contemplate transitioning into a cloud kitchen. Delivery focused restaurants require less labour, cutting down costs drastically. A team of 3 people in a cloud kitchen, can handle the workload of a team of 15 working within a typical restaurant.
With more people switching to online delivery, cloud kitchen operators saw enormous success during the coronavirus pandemic.
4. Create a nurturing environment
Restaurants often face high rates of labour turnover. This requires near consistent training of new employees, which is consequentially financially and time-intensive. This often leads to restaurants losing money each time a member of staff leaves – therefore labour retention is critical.
Creating a working environment that nurtures talent will promote increased job satisfaction and retention. A method of doing this is to utilise team building activities, rewarding employees, and responsive job feedback.
Building up a positive working environment will increase employee satisfaction. This encourages them to stay on and be part of the team due to the growing sense of attachment that they will feel. In the long run this will save you capital on training and development expenses.
5. Update your menu
All the dishes you serve have an individual profit margin depending on the ingredients used to prepare them. So that you are able to reduce expenses, consider which dishes you should continue to produce based on their popularity and returns.
Occasionally, restaurants may have dishes core to their brand, and removing them may severely handicap your ability to attract customers. Therefore for these items, removing them from your menu may harm your ability to generate profits. Therefore, it’s important to find a balance between dishes that generate profits, and those that attract custom.
A benefit of having less menu items is that your logistics are made simpler by requiring less individual suppliers to cover your food production.
Under the cloud kitchen model, collecting data about the dishes that are the most valuable to you is easy; with a core terminal, you can very quickly, statistically assess each menu item for their demand, profitability, and supply, so you can plan out business strategies that improve your profits.
6. Move into a cloud kitchen
A common trend for successful restaurant businesses during the coronavirus pandemic is the use of food delivery to supplement the ban on dining-in. Through readjusting your restaurant model, you effectively cook more food for customers in a shorter period of time at a low cost.
Operating a cloud kitchen is one of the most effective methods of transforming your restaurant to a delivery focused kitchen. Cloud kitchens are delivery focused, featuring less in-house staff, overheads, and improved flexibility; they’re optimised to improve your scalability and profitability.
7. Contact us today
Should you be interested in opening your own cloud kitchen, reach out to us today, and we will be happy to answer any questions you may have, and provide you with more information regarding our cloud kitchen services to get you started on your journey.