Restaurant business requires a lot of investment and incurs a lot of cost in it. You are better familiar with the financial condition of restaurants. From the interior to the food items, everything needs to be perfectly managed, which obviously requires finance. So it is very important to have money in pocket before starting a hotel business. But this business has no end, the more you put efforts and money in it, more will be the growth.
With the passage of time, there comes lot of changes in economic, demographic and social environment of the country. The demands of people are increasing day by day, but the resources to fulfil their requirements are becoming scarce. To cope with this issue, you have to manage your business in such a way that it becomes efficient. To gain efficiency, you have to reduce your inputs and increase the output. Moreover, cost cutting is necessary as resources(capital etc) are becoming scant as compared to the needs of the people.
The best way to manage resources is to cut down the extra cost and useless expenses. To cut down the cost, it is very important to know the areas which are not necessary or where the expense is above limits.
In hotel business, the profit margins are very small and as compared to other businesses. It is not easy to run a restaurant business because it requires high cost and revenues are too low. For the survival of a restaurant and to make the business profitable, different cost cuttings techniques can be used.Here are some of them:
The best way to cut down the cost is to attract more customers to increase sales. According to a research, if sales are increased by 2%, the cost could be cut down to 10%.
Eliminate the unnecessary ingredients from recipe:
The easiest way to cut down the cost is to eliminate the extra ingredients from a recipe or use alternative low cost ingredients. The removal of unnecessary elements form a dish can save a lot of money. To practice this, you need a well trained chef.
Build relationship with suppliers:
The relationship with suppliers can also help to reduce cost.In case of tough times, you can call suppliers to help you. For this, you should build good relationship with suppliers so that they will help you in hard times. Moreover, they can give you discount or you may bargain on price with them. When you are loyal to your suppliers and ask for assistance in crisis, you can surely get it.
Use perfectly designed crockery items
You may put a big serving plate under a small food plate this will show little amount of food big one. The oval shaped plates can also be used because the small quantities of food look more. This will ultimately cut down the cost of serving big amount of meals. Try to use small size serving crockery.
No free meal for hotel employees:
Many times, restaurant offers free meal to employees.A large sum of cost is incurred in it. To avoid this, you can introduce discounts for employees on specific days, otherwise they have to pay for food like others. They should pay for their lunch.
Try to cut down electricity and gas bills:
The proper lighting in hotels is necessary, but it requires too much electricity. To avoid electricity bills, you may allow daylight to enter into restaurant or use savers. Try to avoid heat producing equipments away from the air conditions as they may reduce the efficiency. Try to clean the holders and lights. Don’t use automatic system because it needs to pay heavy bills. You may use ventilators to let fresh air come inside the halls. The gas bills can be reduced if you wisely manage the cooking system.
Try to reduce labour cost:
The main problem that every hotel is facing is high cost of labour. There are lot of expenses like recruitment expenses or training expenses. To cut down the recruitment expenses, you may use internet to advertise the job openings. The training cost can be reduced if you offer an annual training programme, then a quarterly one. Moreover, you have to pay incentives and bonus to employees.The labor cost should be managed properly.
Try to optimize your online presence:
The advertising on online channels like Facebook, Google etc are much cheaper than television or newspaper. The web presence of a restaurant helps it to reach people sitting in homes, offices or universities.
Try to reduce wastage:
Now a new industrial concept is introduced which is “Zero Wastage”. One of the best ways to reduce cost is to recycle the waste products and reuse them. You may recycle garbage and produce gas from it, this will also reduce the gas bills. In addition, you can train employees to avoid wasting materials while cooking. This will not only cut down the cost, but also help you to innovate new ways to reduce wastage.
These are some of the tips to reduce cost. We will bring more suggestions for cost cutting. Stay Connected To Bistro Services!!!