Friday, December 12, 2008

Restaurant Cost Cutting Ideas

“Restaurants aren’t just counting pennies at this point; they’re counting half-pennies,” says Jim Balis, president of The Restaurant Management Group, a New York City-based turnaround-management company that advises restaurants on cost-cutting strategies and coaches them out of financial trouble. Balis offers three broad strategies for operators in all sectors.

1. Train managers to be cost-conscious. Make sure they understand the concept of controllable expenses and the importance of talking with staff about preventing problems such as excessive napkin giveaways and the inadvertent disposal of silverware. The key, says Balis, is to “develop managers because that’s how [these practices] trickle down to ancillary staff.”

2. Tie bonuses to savings. Another tactic that Restaurant Management Group has found worthwhile is offering heavily weighted bonuses to managers. Discuss with managers in advance what the key indicators will be; for example, if china costs are high, decide that for the next two quarters, manager bonuses will be based on reducing the number of replacements.

3. Improve the guest experience. Balis notes that many chain restaurants are relying more on “eatertainment” to help improve the guest experience. This strategy, which could involve assembling ice-cream sundaes tableside rather than in the kitchen, engages customers (as well as servers) at no extra cost.

Read the full story here.

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