9 Golden Rules For Restaurant Cost Control

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Whenever the word ‘Restaurant ‘comes in our mind, the mouth waters itself. Although the food is the main factor of restaurants, some other vital factors attract potential customers or food lovers; like ambiance, service, and cost. Providing all the facilities and good food can improve your restaurant’s business, but making a good profit out of it is sometimes tricky. In fact, it's one of the riskiest business models around and the majority of aspiring restaurateurs end up losing a lot of money. So it would help if you controlled your expenses to make the most out of it. FnB (Food and Nutrition Board) and labor are fields where cost control can be done. Here are some rules that one can follow for restaurant cost control: 

1) Tracking Inventory 

Tracking the stock and managing it comes first when trying to control the expenses. It is crucial to follow your daily stock-in and stock-out to record your costs from day to day. The variance between the actual stock and the Ideal stock should not be more than 3-5% to reduce all the extra wastage of stock. Re-order only the essentials on an individual level to avoid the risk of over-ordering and wastage. 

2) Purchase On Credit

Try to make the purchases on a minimal cash transaction or through your restaurant’s account through a credit basis. Purchasing raw materials on a credit basis enables you to run your restaurant smoothly and pay off the Credit with the money made. It’s better if you join some purchase group where you can buy in bulk with offers and can make a contract with the vendor on a monthly or yearly basis. Also, it's important for you to preventing plumbing disasters to provide excellent customer service. 

3) Yield Management

This part is often overlooked, but it’s crucial. Yield management gives you an idea of how much raw material is needed to make for special preparation or item. So one can order raw materials by keeping the yield of the materials in mind. 

4) Waste Management And Portion Control

Consumption of unnecessary bigger portions and overproduction leads to food waste. Adequate, proper portions of material and right plating of the food make it look good and reduce the price. Keep an eye on the parameters considered to be waste, like – burnt food, returned food, spilled food, and thrown away portions. Good chefs can help out reducing these. 

5) Controlling Labor Cost

When you are employing staff, make sure they are skill full enough and versatile, so that absence of one doesn’t affect the whole restaurant. If they are not skillful enough, train them. Provide them fair pay, rewards, and recognition based on their performance to motivate them always. Efficient staff will eventually reduce your cost and employee turnover. 

6) Automated Service Over Manual

There are a lot of work regarding the billing process and orders done manually and risks a Human error. Keep an automated service for ordering and billing processes and a kitchen display to let the chefs know which food or item is in the queue. This will reduce the need for extra employees, time, and cost. 

7) Monitoring Staff Performance

Monitoring your staff’s performance and making them even more efficient by utilizing their skills can increase your profit margin. To do this, you need to create some performance indicators for each employee. It’s like setting a target for the respective employees to reach your expectation or near to it. Evaluate their performance by the indicators. Efficiency reduces labor costs. 

8) Control Theft And Pilferage

This is the critical part where you have to identify the problem or the person behind any theft in your restaurant. It’s not easy to find out a dishonest person among your employees. Surveillance cameras and software with Admin permission help you monitor your employees, account, and stock and access. 

9) Regular Reporting

Keep a track on your overall restaurant business through daily and weekly reporting, especially the numbers. This will allow you to have an air-tight control over the business, its revenues, and profits. Looking at the sales and the purchase report helps you identify the potential areas of revenue leakage and sales performance. 

Keep Consistent Restaurant Cost Control

Besides these, you can also create obstacle-free space and anti-skid floor in your restaurant to avoid accidents and spillage. All these tips will help restaurateurs and restaurant managers to control your cost directly and indirectly.

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