Trim Fat and Cut Costs

With the price of commodities rising dramatically, it is important to find innovative ways to reduce costs. As an independent operator, here are some things you can do to trim fat and cuts costs – without alienating your customers

Here are 12 things you can do to trim fat and cut costs — without alienating your customers.

  1. Meet regularly with suppliers and manufacturers’ reps, get to know them and let them inform you about specials and deals.

    Make sure they understand what you are trying to achieve in your cost-reduction strategies. You will be surprised at how helpful they can be with suggestions and ideas. They have great insights into industry trends.

  2. The most effective way to reduce costs is to eliminate waste.

    Try to find a use for everything. Make your own stocks for soups and sauces by using meat and vegetable trimmings. Consider doing some of your own meat cutting in-house. You will not only save on the more expensive pre-cut and portioned proteins, but you will have some trimmings to use for specials and stocks.

  3. When planning your food-preparation schedule for each shift and prep to the numbers.

    If you are expecting 100 covers, prep for exactly 100 covers, avoiding waste because of excess production. Make lists, be vigilant, and you will be rewarded with reduced costs.

  4. Do regular inventories — weekly at a minimum and daily if possible.

    Knowing what you have in stock will decrease the chances of overstocking and help you reduce waste.

  5. Control your inventory.

    You should be turning over your inventory at least five times a month. For example, if your purchases add up to $100K per month, your total inventory should not exceed $20K at any time. If you are getting weekly deliveries, consider twice-weekly and if you are getting twice-weekly, consider daily deliveries to avoid over-purchasing and over-production. Cut back on alcohol inventories as well, since these can be costly to maintain.

  6. Review your standard recipes and make any necessary adjustments to maintain your desired cost of goods sold.

    (If you don’t have standard recipes, now would be an ideal time to implement them). Evaluate your menu frequently to gauge its profitability. Make sure your staff is strictly adhering to the recipes — measure everything. An ounce here and an ounce there can affect your costs by 3 to 5% over the long run.

  7. Keep storerooms locked and only allow access to authorized staff.

    Knowing that they will have to search out a manager to get more will motivate employees to be more diligent in their use of products.

  8. Make sure you are getting what you pay for.

    Check deliveries carefully for quantity, quality and price. Watch out for “price creep” on high-volume items. Make sure your suppliers know that you will be checking with a fine-toothed comb. If they are aware of your standards, they will be less likely to send inferior products or change pricing without notice.

  9. Eliminate overtime.

    If you find that your staff is regularly working more than 40 hours per week, hire more staff. Every hour paid at overtime rates may add up to between $150 and $200 per month to your labor costs.

  10. Open your books to the staff.

    Share with them your food costs. Your employees will gladly tell you where they think you could cut costs without affecting customer satisfaction.

  11. Credit-card charges can run up to 4 or 5% of credit-card receipts.

    Many restaurant and merchant associations have negotiated better rates for their members. Do some research and see if you can do better than the posted rates. A 1% reduction in credit-card costs can add up to 0.5% to your bottom line.

  12. Laundry linen and uniform costs can be very expensive if you use an outside service.

    Consider purchasing a small washer and dryer unit and doing some or all of your laundry in-house.

Find more ways to save in our Case Study: A Success Story in Saving Green by Going Green.