Sometimes, the solution to saving money at your restaurant is right under your nose.
Aside from the obvious benefit to the restaurateur, there’s the savings that get passed on to those dining.
An industry expert specializing in helping businesses find cost savings and increase margins thinks Atlanta restaurant owners would be better served examining recurring bills every month — rather than cutting their workforce or worrying about the price of chicken.
It’s the simple, yet often overlooked, expenses, said Dan Schneider, CEO of SIB Fixed Cost Reduction.
He cited several hypothetical examples.
If a restaurateur has a telephone at one or several of their locations, they are “most likely being overcharged.”
Got trash service?
“You are probably paying more than you have to.”
“To put it more simply,” Schneider said, “if you have walls, doors, workers, and customers, the monthly bills you’re getting are probably too high.”
In restaurants specifically, laundry contracts are a big killer.
“One thing to ask yourself is … are these companies slipping in and billing you for extra rags and saying rags were destroyed that really weren’t? Even things like that which sound small can really start creeping up,” Schneider said.
Control is a big part of all this, he said.
“The more things you can do automatically to reduce consumption … the better off you are, so that you’re not just relying on an employee to do it, (and in this industry, there’s a high turnover rate).”
He said restaurant owners can invest in a digital thermostat which allows them to set timers for different parts of the restaurant throughout the day and evening.
Of the 36,000 locations that Schneider’s company serves, 7,000 of them are restaurants.
“We do several things,” he said. “We historically look back to see if they’ve ever been overcharged and try to get them refunds that are due. We see if they’re being over-serviced (for example, half-full dumpsters being emptied, phone lines that don’t exist). Then, we negotiate to try to get the best in cost pricing based on understanding what other people in the area pay, and we go from there.”
His company has assisted restaurant groups in Atlanta and beyond.
Advance ticketing, another type of cost savings measure some restaurants have been adopting — which is very different from the types discussed by Schneider and more specific to eateries — has also been instituted in some businesses.
It’s the notion that in order to reserve a table at a restaurant, diners must pay in advance for the spot.
Fortune.com reported on the recent trend over the summer, saying that this type of reservation system very well could replace the “dance of deception and faithlessness that is our current reservations norm.”
And, there’s the slightly shadier (and sometimes, scary) ways some restaurants have been known to mitigate the costs of doing business.
According to Business Insider, restaurants will do everything from pouring thin heads on beer to selling cheap wine at expensive prices to the consumers who don’t know the difference. Other ways some trim costs: putting fewer expensive items like berries and nuts on a salad.
But, when trying to save money on the up and up to increase margins and pass the savings on to the customer, it’s best to stick to those monthly, reoccurring expenses.
Schneider said analysis by his company found that multi-unit franchisees, for instance, spend anywhere from $300 to $1500 per month more than they should, per location, on monthly services.
“The problem is that it is usually not as easy as simply looking at a bill to spot a glaring error, or checking with other service providers to find out if they have better rates,” he said.
Added Schneider: “Recurring monthly expenses like phone, Internet, trash, and alarm services can be a wasteland of, well, waste.”