In an industry with ever tightening margins and the new-found fear of an isolation ping wiping out staff, wowing customers on a shoestring has never been so important. With every business there are a multitude of costly pitfalls to dive into, none more so than in the hospitality industry. That’s why we have got together to bring you five of the most important ways to reduce food costs and boost revenue - be you an independent coffee shack or nation wide burger joint.
It’s easy right? But so often neglected.. Taking a look back at your tattered recipes to find that what you just served up has morphed over the years (whether due to preference or cutting corners with ingredients) can wreak havoc with actual vs ideal food cost evaluations, slicing into that precious bottom line. It can sometimes be essential to put down the chopping knife and take out the scales to make sure your costed recipes are on par with what they were when you first created them.
Once you have a better idea of your final plate up price its time to assess your portion size. There are some free tools out there to help you keep track of the cost of your current menu (TFS and Fillet to name but a few) but also bear in mind that too big a portion will lead to customers sharing dishes and spending less.
A strategic portion reduction can also do wonders. Customers are happy because they are paying less, you’re happy because you’re getting the most out of your ingredients. Plus smaller plates actually tend to encourage additional spending, think how much you last spent at that new tapas bar in town? Those savvy Spaniards.
A whopping £682m is sapped out of the hospitality industry every year due to food waste costs alone. They are without a doubt one of the biggest costs faced by food service businesses. Fortunately, there are more solutions than ever to tackle the issue, beyond the more traditional tricks of making soups (although, a worthy tip in itself) and stocks out of edible scraps. Here’s a few:
- Donating leftover food to food banks and homeless shelters is tax deductible and can be a great way to connect with your local community!
- Apps like TooGoodToGo can be a smart way to clear what’s destined for the food bin at the end of a quiet day.
- Investing in food tech, such as smart bins from Winnow, can be an exciting way to stay on top of scraps.
The relationship between you and your suppliers is priceless, well almost. Knowing that at the end of the day they are looking to help your business thrive as much as theirs and working together can drive down costs for both parties whilst helping you with kitchen management. Look out for recommendations and take advantage of offers. Using apps like NextChain can help keep all important information flowing between you and your suppliers. It’s also important to keep in mind how long you’ve been working with a particular supplier. Ask for a volume report and get a breakdown of how much business you have provided over years. This can work to your advantage when negotiating new prices.
Seasonality is another important factor to keep in mind when dealing with suppliers. Be bold and experiment with what’s growing near and now. Customers are just as appreciative with honest homegrown goods and if you are able to put in the hard work adding new twists to less convenient ingredients you’ll see profits soar.
Expenses, wastage, rogue purchases and miss ordered goods can be one of the last things you think about when cashing up at the end of the day. Sadly, knowing exactly this information, to the penny, is essential for any business and cannot be neglected.
Depending on your preference and budget, there are a multitude of options out there to help you keep track of spending. NextChain offers a simple and free tool to gather that all important data that you can use to make smart business decisions.
The food tech scene is an ever evolving and improving world that strives on a daily basis to make your life easier. Don’t be afraid to take advantage of free trials, promotions and referrals.
The right solutions for your kitchen are out there, you just need to head out there and grab them.