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restaurant costs

5 Ways to Battle Restaurant Costs

Owning a restaurant can be a huge financial investment. The rising costs of food, employee wages, and competition from others can feel overwhelming. However, by being a proactive owner and mitigating some of the costs and risks before they become a burden is important to your restaurant’s success. Here are some ways that you can battle restaurant costs.

Hire Smart

Your employees are one of the key components of a successful business. They help with the day-to-day operations of your business. Hire a great time that’s there to have your back and is invested in the wellbeing of your establishment. Hiring good employees from the beginning can help mitigate risks, and improve the success of the restaurant. For example, hiring reliable staff can help prevent staffing shortages during busy hours. It may also prevent some workplace injuries from occurring.

Think about your workers comp coverage – are you ready if of your staff got sick or injured on the job?  Do you have a return to work plan in place? Will your employees feel like you are supporting them? Are your employees trained properly? These are all questions you should ask when it comes to your staff.

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Food Costs

The cost of food is increasing, and it can take a toll on your restaurant expenses. The trend in organic and natural ingredients has resulted in cost increases. As a restaurant owner, it can be hard to accommodate these rising costs, especially since restaurants have relatively slim profit margins. While it can be difficult to keep up, it can also be a reminder to look elsewhere to find inefficiencies. For instance, you may not be able to reduce the cost of a chicken, but perhaps you’ve noticed that some items on your menu are not performing well. It could make sense to remove those items or swap them with something more appealing to customers.

Becoming More Efficient

One way to stay on top of costs is to find ways to be more efficient. Whether that’s through adopting new technology, being more strategic with server strategies, or optimizing cooking in the kitchen. Doing research on trends, tips, and technology can save you money in the long term. For example, what types of payment do you accept? How do your servers and waiters flow through the room? Are you taking advantage of digital orders? These are some questions to think about.

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Wage Costs

It’s important that your employees feel like you care for them and you are looking out for them. One way to do that is by making sure they are paid accordingly. However, wage costs are rising and it can affect your business expenses. That’s why it’s crucial to have the right staff on board. Some restaurants are trying out new strategies to help combat increasing wage expenses. These include:

  • Eliminating tipping and paying employees a higher base rate
  • Modifying roles – eliminating the separation between back-of-house and front-of-house
  • Tip sharing amongst all staff

Insurance Coverage

Sometimes accidents happen. Even if you make sure that your restaurant is safe and orderly, there are some things you cannot predict. Insurance is there for when things go wrong unexpectedly. As a restaurant owner, these unpredictable incidents can quickly add up. Medical costs, repair costs, and legal costs could negatively affect your business. Making sure your restaurant is covered is critical. Insurance can help protect your business financially. Talk to an insurance agent to see how to best protect your business. Every business is unique and your coverage should make sense for your business. Your insurance agent can help you find the best coverage for your restaurant.

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