Control Your Restaurant Costs With These 5 Simple Steps

control restaurant costs

Controlling restaurant costs is one of the significant problems that restaurants face. For a restaurant to thrive, you cannot afford to compromise on your food quality or customer service. Since the margins are usually pretty slim, it’s essential to plan, evaluate and monitor the restaurant operation to curb costs and increase revenues. Thus, you must always measure and analyze your restaurant margins and revenues, to keep track of your total costs, and the profit incurred.

Useful Tips to Control Your Restaurant Costs

Here are five mantras to keep a check on restaurant costs and rake profit!

1. Manage your Food Costs

Use these tips to control the food costs in restaurants.

  • Set a Budget: Before you set out to buy raw materials for your inventory, make sure that you are well-informed of recent rates of the food to avoid being duped or exorbitantly charged by the vendor. Set a budget and do thorough market research beforehand – make sure you stick to it, apart from an occasional minor deviation for some exotic ingredients.
  • Recipe Costing: Recipe costing helps you keep track of the incurred cost while preparing a particular item. It is essentially calculating the exact amount of raw materials required for preparing according to the recipe and the cost of each item. Find out how to do recipe costing the right way here. 
  • Engineer your Menu Carefully: Try to utilize all of your raw materials so that none would get wasted. Design your menu cleverly so that high-profit items are highlighted.
  • Manage Portion Size: Another method to curb costs is to manage the portion size of your servings. While too small portions would lead to customer dissatisfaction and negative reviews, too big meals would lead to escalating food costs. Use a portion control tool to maintain consistency in the size of portions, or you can just decide on the number of spoon servings per item. Planning portions and orders help avoid overproduction of items, which either leads to increased food costs or wasted food items. In the next step, we have described how to reduce wastage in restaurants.

Manage your food cost for restaurant costs control

2. Reduce Wastage

You can reduce the food wastage at your restaurant and control food costs by keeping regular track of your inventory – take an estimation of the current stock of raw materials, menu items to utilize those materials and how much to order. Choose a POS software with a stock closing feature that helps automatically calculate the remaining stock and lets you order materials from. You can set reminders that prompt you when the supplies are about to end so that you can purchase more, maintain the stock, and thus, save yourself the out of stock troubles, or over-purchased supplies.

3. Control Pilferage

Unless you’re sitting behind the cashier’s counter and keeping track of the inventory yourself, it is challenging to check on-counter thefts and pilferage. These can take many forms in restaurants. Right from having the wrong amount of raw materials delivered and thefts in the inventory, to unrecorded orders, it is difficult to control thefts. CCTV cameras, strict rules, and warnings, all have been known to go in vain without manual interventions.

POS software with the theft control feature can help you solve this problem and control restaurant costs. It will allow you to set, control and manage permissions for your restaurant staff for various tasks assigned to them. The software keeps logs of all activities of each member and status of the assignments allotted to employees. Thus, you can reduce thefts by 3-5 percent.

4. Analyze Daily Reports

It is imperative for you to analyze your business daily. You must review the sales data of your restaurant daily and make informed decisions based on them. Use a POS software that provides a thorough report of all the transactions, along with the profit and loss (P&L) reports. You can create reports for daily, weekly, monthly, annual review and plan your restaurant’s operations according to the data. This way, you can keep a check on how much you are spending and keep your restaurant costs under control.

5. Reduce Labor Costs

The two major operating restaurant costs in a food business are food costs and labor costs. You can control labor cost by automating the entire process. Use a POS software that provides automated features such as, online table booking, food order, and automatic billing to drastically reduce the workload, freeing up substantial time for your staff to provide impeccable customer service. Subsequently, you also reduce the odds of human error. This article will tell you about the 7 Lesser Known Ways to Reduce Labor Costs in Restaurant

The high employee turnover rate in restaurants adds to the labor costs and subsequently increase your restaurant costs. Thus, having a skilled taskforce that is loyal and dedicated to your business will help you control labor costs.

Reduce manual labor to cut down on your restaurant costs

How many of these tricks are you implementing for restaurant cost control? Let us know in the comments below.

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