Wages are up. Health insurance, business insurance, and utility costs are up. Food costs are up…no down…no up. Cost increases and volatility are putting a squeeze on all sectors, particularly restaurants and food services.

Here are eight strategies to consider for counteracting rising costs:

1. Efficient Inventory Management

Poor inventory management can lead to excessive waste, overstocking, and underuse of resources, all of which can contribute to higher costs. By implementing an efficient inventory management system, restaurants can better control spending and reduce unnecessary expenses. This might involve adopting a first-in-first-out approach, using technology to track inventory accurately, or negotiating bulk purchase discounts with suppliers. More frequent monitoring of your most used or most expensive items can also help

2. Strategic Menu Engineering

Menu engineering involves analyzing dish profitability and popularity to create a menu that maximizes profits. For instance, restaurants can highlight high-margin dishes, re-evaluate the pricing of less profitable items, and remove dishes that are neither popular nor profitable.

3. Portion Control

Portion control is an effective cost-cutting measure. Watch your recipe yields to ensure you’re getting what you expect. If you or your staff notice a lot of leftovers of a particular dish, consider adjusting the portion size. When you reduce waste, in addition to managing costs, you operate more sustainably, which can be a marketing point for your business.

4. Energy Efficiency

By implementing energy-efficient practices such as switching to LED lighting, installing energy-efficient appliances, and ensuring regular maintenance of HVAC systems, your business may see a reduction in utility costs.

5. Staff Training

Well-trained staff are more efficient, make fewer mistakes, and provide better customer service, all of which can help to reduce costs. Training should also address the importance of minimizing waste and engage employees in identifying opportunities to cut waste and costs.

6. Leveraging Technology

Technological advancements can help restaurants reduce costs and improve efficiency. For example, a point of sale (POS) system can streamline order taking and billing, while online reservation systems can help manage customer flow and reduce waiting times.

7. Raising Prices Strategically

While it might seem like an obvious solution, raising prices should be done strategically to avoid alienating customers. Instead of applying a blanket price increase, consider raising prices on less price-sensitive items, offering smaller portions at a lower price, or introducing premium items to boost revenues.

8. Shopping around

Especially if it has been a while since you compared costs for insurance, cable/phone, cleaning services, maintenance, food, ingredients, and more, it’s time to do some comparison shopping to see if you can find less expensive suppliers, products, and services.

When implementing any change, be sure to monitor effectiveness, track results, and make any additional adjustments necessary.

While you focus on managing costs, you can depend on RBT CPAs to focus on your business’ accounting, advisory, audit, and tax needs. Give us a call today so we can show you how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.