One year and several months later, we are still discussing the ripple effects of the COVID pandemic on businesses and corporate organizations. The hospitality industry, which was one of the hardest hit, is still feeling the effects. According to a study conducted by The National Restaurant Association (NRA), about 17% of restaurants were forced to close long-term or permanently due to the pandemic. Which is why it is extremely important as a business owner that has survived this gauntlet so far to review your expenses and see how you can save your restaurant money.
Before the pandemic happened, the NRA had projected the hospitality industry to provide 15.6 million jobs in 2020. However, by December 2020, the sector only provided 9.8 million jobs.
Now, with the administration of COVID vaccines, one could almost predict a return to normalcy. But that would be farther from the truth. The news and outbreak of the Delta variant – an offshoot of COVID-19 has again tipped the scales negatively on restaurants.
Major restaurants in the US are already on the move to providing limited hours of operation or shut down indoor seating altogether. A typical example is McDonald’s recommending closing indoor seating in countries where COVID cases exceed 250 per 100,000 persons.
This is a cause for concern for every restaurant owner or manager. The uncertainty of the Delta variant coupled with the rising costs of rent and food makes it difficult to remain thriving in business.
What measures can you implement to save expenses and save your restaurant business?:
Transform Your Indoor Restaurant into a Pop-up Restaurant
One of the best ways to keep operating and save money is to convert your fast food restaurant to a pop-up shop. As stringent measures are now being imposed to procure public distancing, consumers will opt for takeout and food delivery. It is essential to be on top of the situation and take advantage.
Pop-up restaurants, from a strategic angle, are pretty easy to set up and operate. They require less staffing and overhead costs. Due to its flexible nature, pop-ups will be here for a long time. While reducing staffing or hours may not be ideal, a shuttered business provides even fewer.
Take Charge of Your Inventory
Most restaurant owners often make the mistake of leaving the menu management to the kitchen staff. That is not entirely bad, but you need to save expenses at every opportunity at a time like this. This is one area you should look into.
Take a moment to look into your dry storage and deep freezers to see how many goods you already have. This will give you a clue of what you are working with. Then you can order only order foodstuff and ingredients that are almost running out.
This singular action will save you from overstocking what you already have at the moment. At the same time, if a specific ingredient can only be used in making one dish, order less of it to prevent wastage or consider cutting it out entirely. If there is an item on the menu rarely ordered, consider removing it entirely.
Pre-Portion Your Meals
Another way you can save money in your restaurant is to pre-portion your meals. Pre-portioning your primary ingredients for different meals creates a seamless process for your chefs. Another advantage to this is that it helps your chefs to follow recipes appropriately to avoid unnecessary wastage.
Reduce Food Waste
According to a report, the US wastes close to 40% (about 108 billion pounds) of food yearly. More worrisome is the fact that this amounts to $161 billion that is discarded. There are several ways you can control this waste in your own little way.
Instead of sending some of the skins, bones, or peels of your foodstuff to the bin, they can be used in preparing some soup stocks. Another way you can reduce food wastage is to reduce making large portions of meals you cannot easily preserve.
You can constantly review your consumer orders and make appropriate changes where necessary.
Optimize Your Staff
Optimizing your staff is yet another important way to save money on your restaurant business. Overstaffing your restaurant business at this time may not be a good decision. Instead, inform your workers of the changes in operation and ration their service.
Identify your peak business sales and apportion the right amount of staff that will take care of your customers. Remember that peak sales may shift every week. Thus, it is essential to be in control of the situation.
You can also lookup upcoming events in your city that require more staff to be on the ground. The weather forecast also plays a role in sales. If more people are going to be indoors, food deliveries may rise up a notch.
The uncertainness in tackling the Delta variant is a cause of alarm for business owners. However, the measures discussed above will help you in making significant profits while reducing expenses.
As a business owner you spent years building capital, expertise, a menu, selecting a location and now a global pandemic has become an extremely difficult road block. While this may have led to drastic changes it does not mean the end of your business.
Before the pandemic we were able to save some of our restaurant clients money by renegotiating contracts and the pandemic does not change that. In fact many vendors are somewhat desperate to keep your business and therefore willing to negotiate when in the past they may not have been. Our average savings without changing vendors is 18%.
You can also reach out to us to help you with cost-effective ways to help your business.
Published by Marc Freedman
Marc currently serves as our Chief Cost Evaluator, expertly advising our client management team on how to help you successfully achieve your business and financial growth goals. A respected mentor to all he consults with, he is an avid collaborator and contributor to the spend consultant community, guiding thought leaders to formulate, design, and install the best operational solutions available to their clients.