November 12, 2021

6 Effective Ways to Cut Costs in Your Restaurant


At Kitchen Connect, we’ve been at the forefront of kitchen innovation and cloud kitchen solutions. We’ve seen first-hand what separates the truly successful restaurant businesses from the rest in Malaysia and have helped countless restaurant owners turn their businesses around in our spaces. Here are our top 6 most effective ways to cut costs in your kitchen. 

#1 Review your inventory & waste control policies 


Food wastage and poor planning are more frequent than you might think in restaurants. It’s estimated that between 4% and 10% of food purchased by restaurants never even reaches the customer. This might not sound like a lot at first, but it definitely adds up. Organised and planned inventory management not only saves all this food from being thrown out but can save you a considerable amount of money. You’ll always have access to fresh food when you need it, never have to tell customers you’re out of their favourite dish, and won’t be throwing away anywhere near as much as you used to. 

But predicting demand is no easy task. Finding the right balance takes a lot of analysis, knowledge of the menu, and more. In a cloud kitchen, you’ll have access to all the data and analytics you need to do this, and within months you’ll be running a much more streamlined and smooth kitchen. In the meantime, why not consider implementing other policies like surcharges for leftover food in a buffet or making seasonal dishes that use up ingredients you think are going to be wasted – while they’re still good, of course. 

#2 Team up with the best suppliers


Suppliers are the backbone of your restaurant: without the raw ingredients, your kitchen grinds to a halt. That being said, some suppliers offer a greater value for money than others. If you already have a network of suppliers, there’s no rush. You can take all the time you need to try and find those that can offer all the ingredients you need for a better price. When doing this, make sure you don’t sacrifice quality just for cheaper ingredients. Your customers will notice any reduction in quality, and a damaged reputation will outweigh most if not all the benefits of cutting costs with suppliers. 

If you’re in a cloud kitchen, bonus points for running more than one restaurant brand from the same kitchen. This way, you can use some of the same suppliers across different brands and save on expenditure this way. 

#3 Work with smaller, more efficient teams


Labour costs are some of the biggest expenses in restaurants. In dine-in restaurants, you’ll need a huge front-of-house team to accommodate guests, as well as chefs, managers, and more. Understanding your restaurant’s needs during peak hours and quieter times can help you run a streamlined team of exactly how many employees you need. 

There’s always the option to transition into a more delivery-centric business. This model is more cost-efficient by nature as it can be run with much smaller teams. Food is cooked in your kitchen before being handed off to third-party delivery riders. This type of restaurant model has gained considerable traction during Covid-19 as more and more people are ordering food through delivery services. Instead of the typical 15 staff needed for an averagely sized dine-in restaurant, cloud kitchens need only 2-3

#4 Nurture an enjoyable working environment


It might not be obvious, but employee churn is one of the biggest hidden expenses of a restaurant business, especially if your restaurant necessitates specialist training. Getting new staff up to speed with how your restaurant works take time and effort, directly translating to money spent. 

Try to create an enjoyable working environment by offering non-monetary incentives like team building days, employee of the month awards, and more. Building a work environment like this within your restaurant will encourage your employees to stay in the long-term and save you hours of work training new staff – hours that you could spend improving your restaurant in other ways. This will ultimately help you cut costs in your restaurant! 

#5 Analyse your menu


Different dishes on your menu will be earning you different profit margins depending on how much the raw ingredients cost and how much time and effort they take to produce. Eliminating or modifying the dishes that aren’t earning you much money is a great way to cut costs – but it needs to be done strategically. 

It might not be wise to get rid of a dish that your restaurant is famous for – but increasing the price could make it more worthwhile. As an added benefit of doing this, a smaller menu means fewer logistical matters to deal with in regards to arranging suppliers and storing raw ingredients. 

Getting the data necessary to make these adjustments to your menu requires the use of new technology and lots of due diligence. Cloud kitchens are a great way to simplify the process and give you access to all the data and information you need to cut costs without sacrificing quality. 

#6 Reposition your restaurant in the delivery world 


If there’s been one single F&B trend that can be attributed to the Covid-19 pandemic, it would be the focus on delivery. Successive lockdowns and changing consumer habits have led to this change, and the restaurants that have embraced it have typically been the successful ones.

Transitioning, even partially, into a delivery-focused restaurant is a great way to cut costs and earn more money. Without dine-in customers to look after, you’ve got significantly less on your plate to worry about: no dishes to wash, no customers to greet, and no waste food to dispose of. Cloud kitchens are one of the best ways of going about this, as they are delivery-optimised kitchen spaces that focus on kitchen efficiency above all else. You’ll be able to work with smaller teams, innovative kitchen technology, and cook more food at a lower cost. 

With lower upfront and operational costs, they’re both low risk and high reward and are the perfect route to expanding your restaurant business. Transition your dine-in locations or simply complement them with a cloud kitchen – the choice is yours. 

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