You have to be careful of the profit margin of your restaurant. Especially with pressures like rising real estate costs, unpredictable food prices, and minimum-wage hikes across the country. Restaurateurs are continually re-examining every part of the business, including their ingredients, labor schedules, and food packaging in order to maximize return.
Consumers are more health-conscious than ever, you need to keep that in mind. They want to know where their food comes from, those trends can add new layers of complexity to a restaurant’s bottom line.
Watch every penny—constantly
Complex labor regulations and innovations like third-party delivery require deep financial analysis. “I’d say a lot of restaurateurs actually don’t take the time and energy to keep updated financial reports. You’d be amazed at how many restaurateurs just look at their bank account versus actually running a financial statement and diving into it. That used to work. But, unfortunately, it just doesn’t work anymore.” – David Bloom (Capriotti’s chief development officer)
Focus on saving, not just cutting
Much of the cost-control strategy for restaurants rely on separating short-term expenses from the long-term financial health of operations. For example, you can focus on manager recruitment and retention with hopes that more emphasis there will pay off in the long run.
Design on a budget
There are several ways to trim costs and adjust budgets. But when it comes to real estate, operators have limited flexibility. For example, instead of using reclaimed wood for a counter or bar top, many business owners found that hardwood floors can achieve a similar effect at a fraction of the cost.
Don’t go overboard
Scouring through the garbage of your restaurant can be revealing sometimes. When yo finds too many french fries in the trash, for example, you can tell that the kitchen is over-preparing. Finding 3-inch-long scraps of carrot, you can tell that the prep cooks are wasting valuable produce.