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5 Small Ways to Make Big Gains on Your Profit Margins

September 22, 2021
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Food, beverage, and labor costs make up the biggest slice of most food service budgets. Keeping these expenses at bay is essential in running a successful operation. But what might not be as clear, are the smaller, more subtle ways to make a big impact on your profit margins. Take a look at these top five tips to get more bang for your buck and send those profits soaring.

1. Control inventory
Food costs add up. Having a solid grasp on what’s coming into your operation is one of the top proactive actions you can take to control food waste and profit margins. An easy way to stay on top of this (without constantly pouring over inventory paperwork) is to first train your employees on the importance of first-in-first-out procedures. Be aware of use-by dates and store items properly. The next simple solution is to invest in a point-of-sale (POS) system that has an inventory control program included. Innovative programs help reduce waste by keeping you informed and organized while streamlining the ordering and inventory process.

2. Optimize menu selections
Carefully planning and preparing dishes that share ingredients can cut down on food waste. When more menu items utilize overlapping ingredients, there’s a better chance they’ll end up on a diner’s plate — through one menu item or another. In addition, creating daily specials that optimize unused ingredients also helps to limit food waste. For example, if your restaurant serves a prime rib special on Sundays, a smart move is to make prime rib soup for your Monday daily soup selection. Seasonal menu options also help boost profits by using ingredients that are readily available (and often less expensive) during their peak growing season. Local ingredients might also work to cut out some delivery expenses as well. Whatever the case, making smart food choices and menu selections is a big financial win.

3. Properly train employees
Labor is a big hitter in most foodservice budgets, making up approximately 28%-35% of costs. Training employees in process improvements is one way to gain profits by creating more efficiency throughout your operation. Also, explaining “the rules” to each new employee will pay off substantially. For instance, if an employee knows proper food safety techniques, they’ll opt to toss out the pot of leftover soup that didn’t cool properly. It might be sad to watch it flow down the drain, but waving goodbye to that questionable product could potentially save your customers from getting sick — and save you from financial or reputation damages that can come from improper food handling.

4. Repair or replace old equipment
Smooth running kitchens often work in synergy; even one piece of broken or old equipment can pull multiple areas of your operation down. Take a good hard look at the equipment that needs attention and weigh your return on investment (ROI) to determine if repairing or replacing the equipment is in your best interest. Preventative maintenance helps limit equipment from breaking down. Doing this even once a year can avert the cost that comes with equipment downtime during service. In addition, modernizing your operation’s equipment is one simple way to boost your profit margins. You might have an upfront cost, but newer equipment is often more efficient and has features that can elevate your menu capabilities.

5. Capitalize on automation
Automation is one of those features that can fast track your business toward big gains by providing labor-saving solutions. Investing in commercial kitchen equipment with automation capabilities does this by increasing your staff’s ability to multitask. Programmable presets, conveyor ovens, auto-load/unload capabilities and multiple other innovative technologies can help your people do more with less. In addition, the smart tech works to increase consistency in the cooking process by lowering food waste from under- or over-cooked foods. With automation at hand, it won’t be long before your budget (and your customers) begin to reap the benefits!

Domino toward big profits
Small investments or changes in your business can domino into substantial profits for your establishment. As a foodservice professional, your operation has unique needs. Paying attention to the small actions you can take now will pay off big in the end. Want help identifying other small actions that can make a big difference? Read our blog post, “Top 3 Ways To Create a More Sustainable Foodservice Business.”

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