I’d love to hear the top 3 ways that others have found to cut costs/save money? I thought it would be informative and interesting to hear some advice/ideas/tips on what others have done to save money because as we all know every additional dollar saved goes directly to profit!
For example, you may have found that using several food purveyors as opposed to one has saved you “x” amount of dollars each month by creating competition amongst your purveyors for your business and also ensuring you pay the lowest price possible for product. Or maybe you have found that delegating closing tasks and providing a closing list improves efficiency and thereby reducing labor costs by “x” amount?
Can’t wait to hear some feedback!
I cannot talk as a pizza shop owner yet but as a manager of people in a large multi-level freezer storage/distribution complex with one main building and 6 out-buildings that all had many routine items to be done daily and dozens of temp logs to be done over and over again…maintenance schedules to follow…etc… I found that posting a daily check list of items that everyone knew needed to be done everyday but since everyone would get busy or sidetracked and then the next shift would come in and ask why nothing got done yet…first shift would complain about working late because nothing was ready for second…etc… Having the sheet up they would just do it and not have to be told or asked. They taught themselves to stay on top of things more because they saw the list and checked things off themselves. Cut back on overtime and complaining about the little things a lot! Also created a little competition among each other to be able to complete a task and then initial by the check that they did it. It was a real win-win for the company in labor savings and actually keeping the employees happy on their own.
First off, keep all your refrigeration unit’s coils clean and make sure the airflow inside the refrigerated boxes isnt blocked. Keep your doors closed on your prep tables when you arent using them. Make sure your exhaust fans and make up air units are running properly too. Also, pay attention to how your air conditioning handles the cooling. If it runs all day and doesnt catch up until after you leave at night, and then the next morning it looses ground right off the bat, it might be worth putting in a programmable thermostat to just shut the units down at night and fire them back up just shortly before you get there. Also, have them checked to make sure they’re working properly. I had a unit at my shop that if you ran a program on the tstat, the electric strip heat would run with the AC. If you have a high flour environment like i did, change the filters in your AC units often, especially in the kitchen. I changed mine every 2 weeks to once a week in the heat of the summer. Also, depending on your ovens and their reheat time, if you have long periods of slow time in the afternoons, you might be able to either turn them down or just shut them off.
There are other things such as dont turn on your dining room lights until just shortly before you open. Switch out to compact fluorescent bulbs if you can. Dont be afraid to put CFL’s in your walkin fridges either.
Oh, and dont turn yourself off completely to doing repairs yourself or having a knowledgable employee do it. Where I’m at, just to have a company come change the air filters on 2 rooftop units was $80 plus the cost of the filters, where I just jumped up on the roof myself and had it done in 10 min.
Weigh, weigh, and weigh some more!
Weigh the dough ingredients rather than volumetrically portioning them, and weigh your topping ingredients, especially the cheese. You can save a bundle by just weighing the cheese, let alone the other topping ingredients.
Tom Lehmann/The Dough Doctor
Dump extra phone lines. You do not need a dedicated line for fax or credit cards. That extra line costs you $600 per year. (take that old phone credit card machine to the dump and switch to online processing)
Use two food vendors. They do not love you and sole source agreements for small operators are a joke. Compare all prices weekly and buy on price. Attend food shows and take advantage of show specials and longer term buys on key items to save $1-5 per case. (then watch the ba$terds to make sure they don’t jack up the price before the discount like one of our vendors did)
Negotiate a marketing agreement with your soft drink provider. Even for a small operator the savings is substantial.
Shop your insurance. Either make your agent seek new markets or find another agent. Many small businesses are paying a lot more than they need to.
Negotiate ALL advertising and printing contracts. Buy in bulk. A year long contract for radio spots in my market gets to the spot rate reduced by more than 50% (75% from the printed rate sheet) Same with newspapers, in room guides etc etc.
Pay a manager bonus based on profit rather than sales. Tie it to labor and food cost savings.
ALWAYS do timely oil changes in your company cars!
Shop your credit card service.
Make your own dough. Chop your own veggies, buy block cheese. Buy chicken random parts rather than specific cuts and make your own topping.
Get a good inventory system in place with par levels. Over ordering can cost you a lot of money. Order just enough supplies to get you through to your next order. If you have four extra bags of flour sitting on your shelves not being used, there’s $80 that could be in your bank account. If it’s sitting on your shelf, it’s not making you money.
Cross-train all of your employees so that they can handle all tasks in your shop. This will allow you to cut back on the number of employees each shift. You can also cut back on the amount of employees during slow times. My evening shift is from 4-10. The first hour is always slow and business again slows down after 8:30. A few years ago I started having one less employee from 4-5 and 8:30-10. I have 2 locations so this saves me $40 a day or $14,560 a year in wages!
Supplies and wages are your biggest expenses, so it’s always a good starting point to try and save in these 2 areas.
Very good advice here.
I shopped my insurance for my company vehicles, and my premium dropped 50% for a savings of about 5k.
Most people you deal with are not looking out for you best interests, Just their pockets.
I agree with Rob…don’t under estimate shopping around every few years for insurance.
Agree with all the other posters…if and when you pay someone to repair something watch them cuz you are gonna need to do it in the future. One of our fans goes out every July. Was paying almost 600 bucks to have them replace it…now costs us about 100 to buy the part and do it. And we realized it only needs an occasional new motor…sometimes it is the capacitor
Ask your magnet, menu and/or box supplier if you can group your orders with others to save money…
Thanks for all the suggestions, very good feedback!
Review all prepared and pre-cut items in your order routine. EXAMPLE: Cut onions are convenient, but cost 5 times what whole does. Mcurooms, desserts, Sausage crumbles aren’t as economical as they seem, since you need more for the flavor profile of fresh, roasted ropes or links. If you can save more than 3-% handling yourself, then seriously think about it.
All of the above are great ideas. Here are a few other potential areas for savings (may not be the top 3) but don’t want to be redundant with what has already been posted.
Credit Cards: Is your merchant services contract based on an “Interchange Plus” where your merchant services provider offers you a flat rate above and beyond the fees that they pay to Visa, MC, etc. If you don’t know the answer to that off the top of your head, I would be willing to bet that it is not. If it is not you will never be able to understand how much your merchant services provider is charging you and you will never be able to compare your current rates to another vendors rates. In order to really understand this I would recommend immediately going to http://www.merchantprocessing101.com/. A man named Robert Becker has written an ebook that is completely free and I would bet that it is the most comprehensive and informative piece of material that you will read on the subject. At least it was for me and I did a ton of research before re-negotiating our contract, that is when I was in the restaurant business a few years back.
Purchasing Groups: Do some research to find out if there are any local purchasing groups and do research on some of the National Outfits. The research won’t cost you anything and depending upon what products you sell and your volumes there could be some significant savings. For example, we are in PA and found a group out of Florida that we were able join at no cost and piggy back off of their beverage program which gave us access to National Account pricing if we switched from Coke to Pepsi products. We saved $10 per 5 gallon BIB. Now we had some decent volumes as we had 2 large full service restaurants but the savings was huge. This was the only part of their program that fit our needs but was a great find. If we would have been more local to them we would have had other opportunities.
All that said, before I started to look for savings in other areas than food, I would go back to basics and ask myself the following.
Are my menu prices based on to the penny actual food costs? If you don’t know you’re actual food costs you are likely losing money and you’ll never figure out where the losses are coming from and since your food is probably about 30% of your total costs it could be significant. Whether you purchase your food from 1 vendor with a prime vendor agreement or you have 2+ vendors and are getting the best pricing, if your menu prices are not based on actual food costs, paying the best price on your goods doesn’t mean anything.
In addition to Rogers suggestion about implementing good inventory practices to hedge against over ordering, I would also suggest taking weekly physical food inventories and comparing your actual usage to your theoretical usage based on your sales data. If you don’t know how much product you used compared to what you should have used you will never be able to identify losses whether they are from over portioning, waste/spoilage or the worst offender, theft. I once caught a guy walking out the back door with a Sweet Street Chocolate Lovin Spoon cake under his shirt. There’s no better way to give yourself a raise than shaving off a few points from your food costs. If you don’t have the time and or resources to complete full weekly inventories, try starting with the top 5-10 items.
VP Sales Mail Shark
the above mentioned ebook doesnt seem to be free anymore.
as far as cost savings go we have just started recycling the cans,ripping the label off, flatten them and store them in flour bags.as a consequence our trash pickup comes only once a week,lowering our bill,AND making a bit of money by turning in the cans.
I like the idea of losing the second line,something I had n
t thought of. I unplug my soda cooler sunday nite because were closed mondays.
does anyone shut off their co2 tanks at night??
Yes, I just noticed that he is now charging for that ebook. My apologies, it was always a free resource in the past. You can always google his name and get much of the same information from articles that he has written and published on various sites free of charge. I just did and confirmed.