In the restaurant business, you can’t control everything. The quality of your ingredients, the weather, and even competitors can all affect your business. However, there are also many expenses that you can control as an operator that will help you keep costs low and profits high. Read on to learn more about controllable expenses in a restaurant, and how they can help you save money.
What are Controllable Expenses in a Restaurant?
Controllable expenses are those that you can directly affect with your business practices and through your decision-making. These are expenses that you can control through your own efforts and are often tied to your buying decisions. Controllable costs are different from fixed costs, which are tied to your business location, or variable costs, which are tied to your volume of sales and the amount of product used.
Food Costs
Food costs are the single largest controllable expense in the restaurant business. They account for the majority of the food dollars spent by customers in a restaurant, and those dollars can come directly out of your pocket. Food costs are largely a function of the type and quantity of product you buy. You can reduce these costs by carefully selecting your suppliers and purchasing the right amount of product.
Payroll
One of the largest controllable expenses in any restaurant is payroll. Although it may not be something you can directly control, there are several ways you can influence this cost. These include having a competitive salary for cooks, managers, and other staff, reducing overtime, automating as many processes as possible, and conducting regular reviews of staffing levels.
Marketing and Advertising
Many restaurants invest heavily in marketing and advertising, but these can often be very costly expenses for operators to cover. Luckily, there are many ways to cut back on these expenses or even eliminate them completely. You can start by putting together a one-year marketing plan that outlines your objectives, strategies, and projected return on investment (ROI). This will help you justify any marketing and advertising expenses at the end of the year based on actual results.
Restaurant Supplies
Restaurant supplies are an often-overlooked controllable expense. However, you can reduce these costs by shopping around, negotiating volume rates, and finding the right suppliers. There are a number of online marketplaces that specialize in connecting restaurants with suppliers and these are worth checking out. You can also save money by switching suppliers if you find someone with a lower price or service that you like better.
Summing Up
There are many expenses that you can control as an operator that will help you keep costs low and profits high. Food costs, payroll, marketing and advertising, and restaurant supplies are all controllable expenses that can be reduced with careful planning. The best way to figure out where you can save money for your restaurant business is by following good restaurant bookkeeping practices. You can either use a software system to keep track of your finances or hire an accountant to manage your bookkeeping for you.
