5 Unexpected Ways Restaurants Can Save Money

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It's critical for restaurants to always look for ways to save money. Extra resources means more money to devote to marketing and sales promotions, staff training, testing new menu items, updating kitchen the kitchen and more.

As you can see, whether you're a major franchise or a family-owned restaurant, cutting costs is always a relevant concern.

It's a tricky thing, though. A lot of people go into the restaurant business because they love the food and the customers. As for the operations aspect of running a restaurant? That usually ranks a distant third. But if you're smart about it and take a proactive approach, you can successfully save money for your restaurant and actually have more resources for the parts of running a restaurant.

In this post we'll walk through five examples of ways restaurants can save money.

1) Workman's Compensation Insurance

Workman’s compensation is calculated annually based on a forecast of the upcoming year’s labor costs. If the economy slows down, or if a seasonal restaurant has a tough season due to bad weather and crew sizes are reduced, oftentimes that insurance forecast is not recalculated. Then, when insurers go to resign a business for another year, operators do not update their labor figures. What happens? Workman’s compensation insurance is based on outdated and inflated labor figures.

Tip: Update your labor figures regularly with insurance providers. Get rebates right away, rather than waiting until the end of the year.

2) Build Out

McAlister’s Deli is known for their signature 4,000-square-foot stores. They saved 10 percent in build-out costs by streamlining kitchen and cutting seating.

Maintaining the restaurant's signature décor was extremely important. It ensured that customers still got the same dining experience in the newer, smaller stores. However, the company looked to an unexpected place for savings: the refrigerator. They switched from only using walk-in refrigerators to incorporating reach-in freezers into their kitchens. This saved a ton of space.

They also just cut down on the number of seats in general, which lessened upkeep and rental costs.

Tip: Look for non-obvious ways to decrease the size of your stores without interfering with the customer experience.

3) Energy Costs

Here's an example to learn from:

Raj Pannu, a Subway franchisor, switched to motion-sensor lights and water-saving toilets in her stores. Pannu's sixth store was certified by the U.S. Green Building Council. Before going for the LEED certification, she did the math. She realized that her efforts were worth it. She saves $300–$400 in electricity and $70–$80 in water each month.

Tip: Consider using energy-saving lights, eco-friendly building materials, or motion-activated lights and water sources to save on your utility bills. Your wallet, and your customers, will love you for it.

4) Labor

The old way to create a schedule was with a pen and paper, or maybe an Excel spreadsheet. Then, the manager in charge of this tedious task, would spend hours planning that week's schedule and trying to coordinate between people's requested time off and part time schedules.

New online scheduling products can put an end to this misery, or at least make this cumbersome process more efficient.

Online scheduling products allow employees to submit requests for time off. They also allow employees to trade shifts between one another. After all, the manager doesn't necessarily need to be a bottleneck to that. All he or she needs is an email notification. Because the system is handled online, employees can access their schedule and get alerts of any changes through email, text message, or push notification.

In general, bringing this process online saves managers a ton of time, which saves the restaurant a ton of money.

Tip: Always look for ways to bring offline tasks online. Chances are, it'll be much more efficient if done digitally, and there's also a good chance that your employees will prefer the faster digital methods over cumbersome traditional approaches. If you're looking for a tool for scheduling, one to consider is Schedulefly.

5) Compliance Reporting

Like I mentioned above, if you're doing something the old school way, chances are you could probably save a ton of time and money by taking the process online. The same thing goes for compliance reporting.

A digital reporting solution like Squadle incorporates digital logbooks (mobile app versions of traditional logbooks, delivered on sturdy tablets built for restaurants) and wireless sensor technology to automate some of the reporting, such as temperature recording. This method will not only make the reporting process faster (about 50% according to our customers) but it'll also save you money by providing you with data and insights to drive your strategy for other cost-saving initiatives. For instance, if you know what the average temperature of your freezers is over time, and you realize it's running slightly too cold, you have identified a cost-saving measure. But if that temperature data is locked in traditional logbooks, you'll never know how much money you are losing.

Tip: Read a few of our other blog posts on this topic to learn how digital reporting can help your restaurant.

What cost savings tips do you have for restaurants? Let us know in the comments.