It is rightly said that a restaurant business is pretty hard to keep up with, especially with the increasing fight for controlling food costs in the metropolitan cities. In a city like Mumbai, a restauranteur would find a lot of hurdles while establishing his/her own restaurant space. From finding an ideal place with low rentals to managing food costs to generate enough revenue to sustain in the competitive restaurant industry, a restaurateur needs to go through all these menaces to finally achieve a high-ended profitably running restaurant in Mumbai.
Having said that, a restauranteur must be able to rectify the identified issues with your restaurant food costs at the earliest to make better sales. Since you can’t do much about the rentals and other factors involved in investing in a restaurant, you should be able to pick up these few tricks at your restaurant to cut down on your food cost.
Golden Rules To Control Food Costs in Mumbai
According to statistics, Mumbai has a 4.53% higher cost of living index than Bangalore, which makes it a pretty expensive city to sustain in. This also makes space for job opportunities for each sector, especially the restaurant space. People with high disposable income tend to spend money on dining out and experiencing luxurious restaurants. This is why there are too many options for people to dine out. Eventually, restaurants need to fight all odds including the food costs in Mumbai to be really successful.
Let’s look at a few ways to cut down on your food costs, and thereby make profits for restaurants in Mumbai.
i) Raw Material Purchasing on Credit
Investing in your raw materials initially is always a risk-taking business since you’re never sure of the kind of profits you’d be making in a city like Mumbai. For a budding restaurateur, you should be able to answer questions to yourself, like the days in which you’d be able to recover the investment, and the break-even points of you making profits.
Even after making all the analyses, the restaurant business in Mumbai is always a tough nut to crack. This is why you must consider purchasing your raw material on credit. Minimalizing your cash transactions and getting some time to pay off the credit from the money you make sounds like a wise decision, for a budding restauranteur.
On the contrary, if you’re one established restauranteur and want to continue making more profits than you already were, you might also consider taking raw materials on credit. This is because you must be buying raw material in a humongous amount, calling for more risks.
Another sustainable option for you to control your cash transactions and take minimal risks is to join some Purchase groups, that help you lower down your purchase costs significantly. In a Purchasing Group, because of the sheer number of buyers, the suppliers often lower the prices. You might also try having an annual contract with the vendors so that you get the benefits of consistency with the raw material and get them at a bargain able price.
ii) Tracking Inventory
On a general note, most restaurateurs would want to keep more food in their inventory that they actually need. This tends to overflow the inventory levels, resulting in wastage and a direct increase in food costs. Keeping a track of your inventory and analyzing the daily consumer trends helps you to make an estimate about the upcoming trends, which would, in turn, enable you to make wiser decisions about your next purchase.
Restaurant management software becomes a dire need here. Since handing inventory of the nightmare of most of the restaurateurs, it is always a smarter decision that restaurateurs use technology to manage it. Along with the raw materials coming in and daily consumption of your restaurant, you should also ensure to have a good relationship with your vendors. Here are a few ways how an inventory management software would help you to reduce food costs at a restaurant in Mumbai.
- Standardizing the amount of raw material and always keeping a track of the consumption pattern helps to reduce food costs to a marginal level. This way, there would be minimal wastages as the number of raw materials is pre-set.
- Maintaining a healthy relationship with your vendors also helps you to ask for better prices of raw material. Your inventory management software keeps a calendar for each meeting or purchase order that you want to send out so that you are carefree about your upcoming raw material.
- Along with that, an inventory management software helps you keep a record of the variances, i.e. the difference in ideal stock and the actual stock available. Not only is keeping a record, but a restaurant POS also ensures that the variance is minimized.
Controlling food costs are not always related to food wastage and serving bigger portions. It also involves having a detailed outlook for both stock and yield. A restauranteur handles his inventory and purchases on an everyday basis. Keeping track of how much stock is required the next day, would make me use the present raw materials wisely.
Ideally, the features of inventory management software ensure that there are absolutely no loopholes for the food costs to rise. This is why investing in an ideal inventory management software becomes a necessity.
iii) Recipe management To Reduce Food Costs
Apart from managing inventory, standardizing your recipe also helps to reduce food costs at restaurants. Now, talking about a city like Mumbai, you can be sure that the consumers would come back to the same restaurant for their specialty dishes and the consistency in their food. This is why as restaurant owners of Mumbai, you need to have a standard recipe for all your dishes, which would serve both purposes of reducing food costs as well as catering to the tastes of the customers.
For someone who owns a restaurant chain in Mumbai, reducing food costs by recipe standardizing becomes all the more important. This is why having the right technology at your restaurant outlet is crucial to check on your restaurant inventory. Investing in a restaurant management software helps you to keep track of daily consumption, make a prediction of how much raw material is to be consumed the next day. You should not exceed this estimated amount as it would only cause wastage.
iv) Menu Planning
Once you have taken care of your inventory and stock, yield and vendors, there is one more important thing that you should be worrying about, and that is the menu. In recent times, a menu has become the heart of a restaurant. Customers are attracted to dining in a particular place just because of its menu.
How you can build a great menu is by analyzing which are your bestseller dishes, and which are the dishes that people are not ordering. Such intensive information recovered from your restaurant POS can help you shift the bestsellers to the top of your menu, and even remove the non-performing ones. You could also try enabling tablet ordering through your restaurant POS so that the customers can order themselves from the digital menu and experience your creativity within the same time.
v) Reduce Your Food Wastes And Rework Your Portion Sizes
In a recent report of the Hindustan Times, about 73 percent comprises of the entire garbage of Mumbai city comprises food, vegetable, and fruit waste. It was also reported by the waste management experts, that if the city recycles the waste, it could reduce the amount of garbage to be transported.
This should bring in a serious concern of all the restaurateurs of Mumbai to help manage their share of these wastes. Keeping a check on the waste generated will eventually help you reduce food costs since most of these wastes would be recycled. However, here are some tips that work like a charm when it comes to reducing waste in a restaurant in Mumbai to save on your food cost.
- Reuse The Reusables: Now, we aren’t talking about a change on a city level or a country level. Changes need to happen at the very basic level for a major change to come at the upper level. This is why you need to ensure that you reuse all the reusable wastes generated at your restaurant.
- Standardize Kitchen Operations: Once you have all your processes standardized, you don’t need to worry about the wastage. The usage of a restaurant management software to ensure that the kitchen operations like recipe management, the way the kitchen is set up and the kitchen utensils are all little steps to make a big impact.
- Rework Your Portion Sizes: Nothing saves on food costs better than controlling your portion sizes. The right portion of a dish on a plate can never be estimated. You have to play a hit and trial t Look at your customer’s plates and their leftovers. If you consistently see people leaving too much on their plate, maybe its time you consider changing the size of your plate. Since there is no direct equation and trick for this one, you will have to have strong observation skills to know the right portion to be served.
Reducing food waste to ensure a reduction in the food costs at restaurants in Mumbai should be everyone’s concern at your outlet. This is where staff hiring and training play an important role. Along with bringing in the right restaurant technology, you must ensure that the staff follows your restaurant SOPs related to wastage and reusability of food, by heart.
Along with that, you must also be considering evaluating your staff while they are handling food wastes. Their KRA should include minimizing wastage of food, evaluating the right plate size and determining whether or not the portion of the food is the right amount to serve the customers.
vi) Catching Hold Of Thefts And Pilferage
Another hidden reason why restaurants don’t have complete control over their food costs, even after following these precautions/suggestion, is the unidentified theft happening at your restaurant right now. It is almost impossible to keep a check on your staff members and what they are up to at all hours. This is when you need help from technology.
Using your restaurant POS to make sure your staff’s activities are monitored at all times of the day removes the loopholes that were earlier present in your restaurant. Ideally, your restaurant POS system should have an anti-theft feature that tracks down each of the transactions and bills sanctioned.
It must be taken as a special note that it is easier for a restaurant that serves liquor or a bar to face this issue more than any casual restaurant. This is because it takes a lot of hard work to maintain your liquor inventory. A lot of times that customers don’t ask for bills or are given duplicate bills are times when the staff has opportunities to steal from your restaurant. You must look for a restaurant POS with appropriate features like anti-theft, staff reporting, or Bluetooth printing of the bills.
All in all, having food costs issues is attributed as one of the most common challenges that restaurateurs face in Mumbai. With all the food wastages and intense competition coming up, the restaurant industry in Mumbai is soon going to be a tougher nut to crack than it already is. This is why you must take note of these measures to control food costs, and eventually increase profits.