Educational panelists offer ways to cut restaurant costs

Restaurants can trim cost in their operations without impacting the quality of the offerings or the customer experience, panelists told a packed room on Monday.

In the National Restaurant Association educational panel, “30 Ways to Cut Costs in 45 minutes (Without Reducing Quality or Harming Your Guest Experience),” Jim Laube, founder of RestaurantOwner.com, and Juan Martinez, owner of the five-unit fast-casual Don Juan Mex Grill in Northeast Pennsylvania shared their experiences.

Laube began with a joke: How do you make million dollars in the restaurant business?  Start with $3 million.

“It really is not so funny especially, after COVID,” Laube said. “This industry is a difficult industry and has gotten even more challenging.

Laube said “this business is tough, but it's not impossible.  … You just have to figure out new ways to win.”

Martinez and Laube offered 30 ways to cut costs, but their descriptions were too long Nation’s Restaurant News to relate them all. Some highlights of about a third:

Conduct a physical inventory at the end of every period.

“I made it a point to make sure what buttons I could push to make sure my engine is running smoothly,” said Martinez, who operates restaurants with 22% food costs.

Conduct an Inventory count.

Laube said operators should make sure count sheets are in the same order that those products are on the shelf and “you have one or two people to count.”

Calculate food, beverage, and paper cost every single week.

Laube suggested doing this calculation at least on a weekly basis.

Count key products daily.

“This is one of the most basic fundamental controls our industry,” Laube said, “and I'm amazed how many people don’t do it. It's very, very powerful,” he said, “and it's based on the premise that we have 10 to 15 products in most restaurants makes up 60%, 70%, maybe 80% of their food costs.”

Before signing invoices, make sure quality, quantity, weights, and prices match to what was negotiated.

Accuracy in those areas helps restrain food costs in general, Laube said.

Cancel subscription services.

Since the pandemic, Martinez said he has saved $3,000 a month “by just looking at those ledgers and looking at things that are still there that we thought should have been cancelled a long time ago.”

Keep bussers and anyone who handles trash out of storage areas.

"Putting a box of product in the trash and then retrieving it later from the dumpster is a popular means of theft," Laube said. "The goal is keeping folks who take out the trash from access to products in the storage room."

Periodically inspect dish room trash.

“It's an awareness issue,” Laube said, citing one operator who has “lowered his utensil replacement costs. He's actually given a little bit of a bonus here and there to his dish room [staff], because they're doing a better job of controlling costs.”

Maintain at least a third of your team as part-time employees.

Martinez said he keeps about half of the staff members at his five restaurants as part-time employees.

Pre-portion products prior to production.

“Some of the reasons for doing that are, obviously, quality, consistency and cost control and also speed and ticket times,” he said.

Laube said his No. 30 recommendation was saving “the best for last” and were distilled to the seven most powerful words in business:

Is that the best you can do?

Operators will often find that a lower price might be available. The question should be followed with:

Is that really the best you can do.”

And remember, he advised attendees,

“Whoever speaks first, loses,” he added with a somewhat sincere laugh.

Update May 22, 2024: This story has been edited to clarify storage-araa access.

Contact Ron Ruggless at [email protected]

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