Restaurants don’t close because they run out of cash, they close because they spent their money on the wrong things.
While making money is pretty darn important, sometimes losing less money is just as key. Here’s a short list of smart ways to make certain you’re capitalizing on the smartest investment you can make: watching your waste.
Post your monthly invoices. Does your team have any idea what you pay every month for the “invisible” costs, like electricity, water, heat, gas, insurance, lease/rent, and garbage 
removal? Post a different utility invoice each month on your bulletin boards with the totals highlighted in yellow. Now employees can relate the cost of doing business to their own expenses at home.
Think big. Don’t invest time, money and resources toward something that has a small payoff. Identify and focus on the largest cost-savings opportunities in your company or store. Know your most troublesome recurring expenses and show your teams how to minimize them. Find out which leader or team in the company does the best job managing those expenses and how they do it. Share that knowledge with your other managers and teams. Measure and share report results frequently to enact a sense of progress, and make sure progress is made on your target before moving on to another specific cost-saving area.
Preach P&L 101 Daily. Teach your employees how little you make as a business before you teach them how to sell more. Your hourly team believes that managers, owners and operators are making a fortune. They think that when a customer gives you a dollar most of that dollar is profit. Why should they know better if you haven’t taught them differently? The very first page in your training manuals should reinforce this reality; motivate people to serve better and sell more by educating them daily on why it’s important to do so.
Sell more. This may be your best cost-cutting strategy. Higher sales rotates more inventory, makes advertising more effective, makes labor dollars more efficient, and shareholders happier. Unlike most other foodservice processes, selling doesn’t cost. It pays.
Water less. Instead of automatically bringing water to guests, wait until they ask for a glass. That “free” glass of water includes the cost of the glass, ice, water, storing, washing, drying and replacing it.
None of us is as smart as all of us. Those who plan the battle don’t battle the plan. Solicit your team’s ideas and get them involved in decision-making relative to cost-control. Your employees talk about areas where you’re wasting money or creating unsafe conditions (which can cost big if left unattended). Place on dot on a map of your restaurant to mark the location of every employee slip, fall or accident in the last 90 days. Your Danger Zones will be clearly highlighted.
Follow your recipes. The driving force behind high food and beverage costs in the kitchen or behind the bar comes from cooks, servers or bartenders that choose to follow their own recipes or measure “by eye” instead of using the prescribed spoons, cups, scales or shot pourers. Having controls in place is critical for consistency, flavor, taste, and profitability. Allowing crew to set their own portioning levels creates higher costs, inconsistent portions, and an inconsistent product. Customers notice.
Lock up the portable assets. Asset protection is one of the simplest ways to limit your vulnerability to loss, “shrinkage,” and theft. Thoroughly assess your vulnerabilities and prevention processes at the unit level with your managers and insurance carrier every six months. Deal with employee theft by improving your systems (don’t stop trusting your people).
Don’t Over-Portion. Over-portioning alcohol in drinks or food on menus not only wreaks havoc on your food and beverage costs, it affects the recipe, flavor and taste. Follow your recipes and constantly reinforce the importance of using measured portions.
Play the “Price is Right.” At your next crew meeting, display everyday workplace items that are commonly abused, over-portioned or accidentally tossed by employees. Include items like sugar packets, ketchup packets, butter, crackers, silverware, napkins, plates, glasses, table tents, menus, knives, an extra ounce of meat, a handful of fries, etc. Put these on a table in the front of the team with a card face down featuring the price of each item or portion. Employees in teams of two try to guess the right answers. Invest in this popular poster from Sullivision that shows your team the average profit on the dollar:
Schedule smarter. The hidden tool of cost-saving and profitability in most restaurants is designing a smart employee schedule week in and week out. Know which cooks and servers work best together. Often this rapport results in more efficient productivity and performance and sometimes. fewer employees.
Give unbelievers a job at the competition. One of the most important things you can do to reinforce a cost-conscious culture is to get rid of the people whose actions or attitude fail to support those efforts.
Jim Sullivan is a popular Keynote speaker at foodservice conferences worldwide. Visit 
our store here at Sullivison.com to learn more and get his books, DVDs, free mobile apps, leadership enewsletter and more. You can follow him on Twitter, Pinterest and LinkedIn @Sullivision. Thanks.
