Those little expenses really do add up
As bar and restaurant owners, we want our operating costs to be as low as possible. But where do the bulk of these costs come from? Rent, utilities, food, and staff are the typical responses. Lowering the costs on these key components of your business takes time, which is why this blog post is dedicated to some quick fixes to save you money starting today.
Here are a few quick and easy tricks to shave a few thousand dollars a year off your bottom line and increase your restaurant profit margin with some minor process changes.
Switch to hand-dryers
Installing commercial hand-dryers in your bathroom will probably set you back somewhere between $1,000 to $2,000 but pay you back in a year.
This can seem like an unnecessary luxury, especially if you’re launching a new business. The reality is, most small establishments tend to opt towards paper towels instead.
It’s quicker to set up, you don’t need to hire an electrician, and the upfront costs are lower. Can’t go wrong with that, right?
The truth is, after a few months in business, your paper towel costs are quickly going to surpass what you would have originally paid for a commercial dryer installation.
A typical case of paper towels is going to cost between $50 and $150. If you’re a smaller sized restaurant or bar, let’s be conservative and say you go through a case per week. That’s a minimum of $2,600 per year just in bathroom paper towels.
After a single year, your commercial hand dryer would have paid for itself, not to mention it’s better for the environment and less of a mess.
No empty dishwashers or glasswashers
Do you have a rotary glass washing machine in your location? If so, you might be surprised to learn you could potentially be overpaying to run it without realizing.
If you go into the back of a bar, you’ll probably see one of these running. What most people don’t realize however, is just how much the chemical costs for one of these things can be.
Typical machine detergents cost between $80-$100 per bottle and they’re used as long as your machine is running. It drives me nuts when I see these left on all day long, especially when they’re empty.
By having a quick conversation with your staff, and creating a policy of keeping the rotary washers off unless being used, you can add more to your bottom line.
Only have a regular washer? No problem. You can still save money by ensuring your staff are only running a cycle when it’s full to save on energy, water, and chemicals.
Take advantage of energy-efficient appliances and get rebates
You might be surprised to learn that there are a number of financial incentive programs available to restaurants and bars such as yours. For example, if your business is in BC, you can take advantage of natural gas cooking appliances through the FortisBC Foodservice Incentive Program, from $200 for an efficient steam cooker to as much as $3,500 for a rack oven.”
BC Hydro also offers incentives on efficient refrigeration equipment, some electric kitchen equipment, exhaust hood fans, and of course, lighting.
The Pear Tree, a restaurant in Vancouver BC, included variable speed fans and LED lighting in the kitchen, coupled with a conscientious approach to energy conservation. Those changes saved them an average “$120 per bill compared to a couple of years ago.”
The Kitchen Spot did some digging, and found that “52% of water use in restaurants is associated with kitchen and warewashing operations. Another 31% is associated with restrooms. That represents 83% of your total water usage. So it makes sense to focus on those areas when trying to cut back.”
According to MenuMag, “An area that is easily overlooked in a commercial foodservice environment is lighting. On average, 13 percent of the total energy in a restaurant can be used for lighting purposes. If you’re looking for a simple and easy way to save money, replacing inefficient lighting is a great place to start.”
Restaurants Canada was nice enough to create a directory for all the potential incentive programs available to your business to promote energy savings. You can find it here.
Pro Tip: Easy Savings for your bar or restaurant:
- Switch to hand-dryers
- Don't run your dish and glass washers empty.
- Switch to energy efficient appliances.
If you need more guidance on cutting your bar or restaurant’s food and beverage costs, a great place to start is by tracking your costs. Download and start filling in Hailo Data’s food and beverage cost management document for support calculating cost of goods sold (COGS), recipe costing, inventory management and more.
Kyle Tweter
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