Top 10 Cost-Saving Tips For Your Business to Prosper in the New Year
What can you do to meet your business' new year goals and resolutions?
With 2019 right around the corner, it's common for us to set goals and make resolutions so that we can improve ourselves throughout the new year. Businesses, too, are continually seeking to improve, so we decided to compile a list of ten ways your business can operate, look and run its best during 2019.
1. Lower Your Food Cost Percentage
Your Food Cost Percentage is an extremely important factor in whether your restaurant is able to keep a lid on its costs. It can be calculated by dividing the total cost of ingredients and the item's menu price.
Formula: Total cost of ingredients/menu item price
The magic range you want your Food Cost Percentage to be within is 15-30%. This means that the gross revenue per item should be around 70-85%. Staying within this range will ensure that your restaurant can maintain healthy profits consistently and across all items. It's important to run this formula through all your menu items so you'll know if any items in particular are costing more than they're worth. You can calculate your Food Cost Percentage directly through the following link:
2. Staff Retraining
It's safe to say that your business is likely no longer the exact same entity as when it first opened. As your business grows and evolves, chances are that the training your new staff receives may be different to what your older staff once had. It's best to retrain older staff, where applicable, so that they implement cost-saving measures that might be included in the training that new staff members receive. This way, all your staff will be on the same page when it comes to saving your business money. Alternatively, you could create an entirely new training course that all staff must undertake so that new cost-saving measures are taught to all employees.
3. Ditch disposable Plastics
Wherever possible, your business can opt to make a conscious shift away from disposable plastics to metal, ceramic or glass. Things like disposable plates and cutlery may seem cheap in the short-run, but as a long-term solution, they end up costing your business far more. Buying glass or ceramic plates and cutlery not only saves you costs in the long run because of a one-time purchase cost, but they are also kinder to the environment and reduces the amount your business has to pay to remove rubbish from the premises.
4. Joint Advertising
Work with local businesses near you to create a joint advertising program. How this works is by allowing local businesses to place flyers within your establishment and in return, you can place flyers of your business within theirs. Make sure the businesses you cooperate with are not your competitors or else you might end up losing business. If you run a restaurant business, you could place flyers in a bakery or coffee shop. These businesses are too different to steal away your customers, but are in a similar industry and might encourage people to visit your establishment. This method of joint advertising keeps your marketing budget low and gains your business more exposure with new customers relatively easily.
5. Digitized Menus and Inventory Management
The best types of cost-cutting requires modern solutions. Many businesses rely on a variety of seasonal menus and changing menu items to keep hungry customers intrigued and loyal. Digitizing your menus ensures you can edit them whenever you please and without having to print new ones regularly. When it comes to inventory management, getting information too late could result in wastage or running short on supplies, which will only increase costs. Digitizing your inventory ensures your business runs smoothly and that you can order just the right amount so that nothing is wasted.
6. Save Energy
This one might seem like a no-brainer, but in actuality, there are many small things you could be doing to cut down your energy bills. First, switch to smart bulbs, which use lower wattage and could save you up to 20 USD a year…per bulb! If you run a restaurant chain, this alone could save you thousands of dollars a year. In addition, make sure to unplug devices that draw energy on standby. For a comprehensive list of what appliances drain energy even you think they're 'off', check out the following link:
7. Cut Back on Freebies
Does your restaurant hand out free bread or snacks as soon as customers take a seat? Waiting for customers to specifically request for bread can help you figure out which customers will actually eat the bread and which customers will waste it. If you feel it simply looks better to offer bread or snacks right from the get-go, offer a smaller portion. That way, if customers want more, they can simply ask for it. These simple methods not only save cost, but help reduce food waste as an additional bonus.
8. Focus Your Menu
You can use your POS to check which items in your menu sell more than others. This can help form the basis of a more streamlined menu where dishes that are ordered less-frequently can be removed. Having to stock ingredients for food that isn't popular can lead to a larger amount of wasted money and ingredients.
9. Shop Local
This is not just a cost-saving method, but it is also playing into one of the biggest F&B trends of recent years. Seasonally-relevant ingredients not only arrive fresher, but are cheaper if they are grown locally since they avoid transport costs and potential import taxes. Besides, offering up enticing menu items based on the freshest local produce is sure to bring buzz to your restaurant and create greater turnover.
10. Deliver Better
If your restaurant delivers food, try delivering more items at once, or calculating the most optimal route so that your delivery drivers can save time and gas. Paying closer attention to delivery routes and perhaps cutting off deliveries to districts that are too far away may help you significantly reduce costs. Offer your customers the chance to pick up, as well, since it may be easier for customers to place orders in advance and pick their orders up in person, saving you the hassle of having to deliver in the first place! Alternatively, you could pair up with a local delivery business and pay them a small fee to deliver on your establishment's behalf so that you do not need to employ dedicated delivery staff and don't have to purchase a delivery vehicle.